In my latest column on GigaOM, I speak to the meteoric rise of “patent reform” as an issue for Washington lobbyists. As Tim Lee points out in his latest entry, it isn’t always clear that patents=innovation. Irony note: it is Verizon — not Vonage — that is a member of the Coalition for Patent Fairness, which aims to reduce the burdens of patent litigation:
When Democrats took control of Congress last election, the lobbyists for all the big technology and telecom companies in Washington pulled out their wish lists, ripped them up, and re-arranged their legislative priorities.
Gone was the push for sweeping telecommunications legislation, hemispheric-wide free-trade agreements and limitations on Internet taxes. Only a Republican Congress and White House could agree upon those.
A new priority has emerged: overhauling the nation’s patent system. Seemingly out of nowhere, it is suddenly all the talk of Washington’s political-corporate machinations.
Mike Masnick warns that the future of VoIP is in jeopardy:
You have to wonder how many times fans of the patent system have to repeat the mantra that “patents encourage innovation” before they can actually believe it. There continues to be new evidence on nearly a daily basis of patents doing the exact opposite that it’s hard to believe the patent system retains as many supporters as it does. The latest is that a ton of patent holders are preparing to sue over various VoIP-related patents, following the news of Verizon’s big win over Vonage for VoIP patents. The problem, of course, is that tons of companies (some big, some small) all claim patents on various aspects of VoIP — creating the very definition of the “patent thicket.” That is, there are so many patents around the very concept of VoIP that no one company can actually afford to offer a VoIP service, since the cost to license all the patents is simply too prohibitive. Expect plenty more lawsuits in the near future as this all comes out in court. The big players will use their patents to keep out competition, and the small players will use the patents to try to create an NTP-style lottery ticket. The lawyers will all win — but consumers who just want to use VoIP will lose big time. What’s wrong with letting companies simply compete in the marketplace and letting the natural forces of competition encourage innovation? Instead, we get patent holders trying to hold back competition and hold back innovation.
I think critics of the patent system need to be careful about over-stating our case. I don’t think software patents will destroy the VoIP industry. Rather, they will serve as a steady drag on the industry, raising the cost of doing business and forcing innovative upstarts to spend their money hiring lawyers rather than engineers. This will, in turn, tilt the playing field to Verizon’s benefit.
Most likely the result will be that small, entrepreneurial firms will be squeezed out of the market, leaving a bifurcated market between large, deep-pocketed incumbents on the one hand, and decentralized open source projects and overseas firms on the other. Tech-savvy Americans will have no trouble finding and installing innovative VoIP solutions, but for the vast bulk of Americans, they’ll have to use whatever Verizon and other patent-heavy firms choose to dish out. (It’s an interesting question what will happen to firms like Skype, Apple, AOL, and Google that offer “pure Internet” voice calling and have not, to date, made a significant dent on the telephone market)
What this case makes crystal clear is that there’s no appreciable connection between which innovating and getting patents. No one would argue that Verizon has been more innovative than Vonage in the VoIP market, yet because Verizon has spent more money filling for patents in recent years, Vonage is placed in the ridiculous position of paying Verizon for the privilege of using Verizon’s “inventions.”
Don Marti has an excellent analogy to help illustrate what’s wrong with software patents:
If Victor invents something, and I describe it in prose, I’m not infringing. If he invents something and I build it as hardware, I am. But if I do something in between between hardware and prose—”software”— where do you draw the line of where he can sue me? If Dr. David S. Touretzky doesn’t know where you draw the line between “speech” and “device” how should the courts know?
All of the arguments for software patents work just as well for prose patents. Just as a software patent covers the algorithm, not the code, a prose patent could cover the literary device, sequence of topics, or ideas used to produce some effect on the reader…
The debate over software patents isn’t just an attempt to set one arbitrary line between the patentable and the unpatentable. It’s about resisting the slide toward higher and higher transaction costs that happens when patents creep into places where they don’t make sense. We have algorithm patents but not prose patents because lawyers and judges use analogies and other prose inventions more than they use algorithms.
Quite so. I think the reason you see such violent and near-unanimous dislike for software patents among computer programmers is that it’s not an abstraction for them. For most people, software is just a magical icon that sits on their desktop and does stuff when they double click on it. The question of whether software should be covered by patents is akin to debates over who owns the moon: intellectually interesting, but not really relevant to their day-to-day lives. But what computer programmers see is that widespread enforcement of software patents would mean that a significant portion of their professional lives would suddenly require regular consultation with lawyers. This pisses them off in precisely the same way—and for precisely the same reasons—that patents on plot devices, analogies, literary styles, and other prose concepts would piss off writers.
Tech Policy Weekly from the Technology Liberation Front is a weekly podcast about technology policy from TLF’s learned band of contributors. This week we took the podcast on the road and recorded live at our Alcohol Liberation Front happy hour at the Science Club in Washington, DC. Voices on the show this week include Jim Harper of the Cato Institute, David Robinson of The American, Tim Lee of the Show Me Institute, PJ Doland of PJ Doland Web Design, James Gattuso of the Heritage Foundation, Jerry Brito of the Mercatus Center, and Adam Thierer of PFF. Topics include,
- Scholars bypass established journals and publishing their research online
- The growth of the breadth of patents
- The government’s plan to give everyone a free digital TV converter box
- The future of physical media in a digital age
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This Thursday, March 22, The Heritage Foundation will be hosting Dr. Irwin Jacobs, the founder of QUALCOMM at its DC digs for a discussion entitled “Not Patently Obvious: An Innovator’s Perspective on Patent Reform. I’ve alway found Jacobs life story to be a fascinating one — starting out as an assistant professor of electrical engineering with some ideas on wireless signals, he ended up developing some of the key technologies behind the cell phone revolution, and founding one of America’s most sucessful firms. He is worried about the direction of patent reform in the Congress, however — fearing that proposed reforms will undercut the incentives for innovators in the future.
Please join us for what should be a fascinating discussion at 10 am Thursday. RSVP here.
James Besson tipped me off to this interesting discussion of the implications of the Microsoft v. AT&Tcase:
The question posed by the Microsoft v. AT&T case, is whether that law should apply to situations where the only exported “component” in question is software written in the U.S. but copied and reinstalled in computers abroad. Interestingly enough, the near unanimous view in the software industry–judging from the briefs submitted by the parties I’ve listed above–is that it shouldn’t. (The specific facts of the case are these: Microsoft concedes that its Windows operating system infringes a U.S. patent belonging to AT&T (T) relating to coding and decoding human speech. It is willing to pay royalties on copies of Windows sold in the U.S., but contends that it shouldn’t have to pay for copies installed on computers abroad and sold there. AT&T, and the court below, say it should.)
In other words, all these parties with mighty software patent portfolios would rather, on balance, not be allowed to enforce those valuable assets abroad, so long as they could be assured that, in exchange, they also wouldn’t have to worry about being sued for infringing anyone else’s U.S. software patents abroad. That doesn’t sound like a ringing endorsement of the U.S. patent system, at least as it relates to software patents; it sounds like the opposite. (Patent law is supposed to benefit industry by spurring innovation; yet it sounds like the software industry regards it as a net drag on in its industry.)
I find this an intriguing argument, although I’m sure if I agree with it. What do y’all think?
Over at Ars, I expand on my recent post contrasting Brad Smith’s recent article defending software patents and Bill Gates’ 1991 memo warning that software patents threaten the software industry:
Gates’ memo suggests that in 1991, Microsoft still considered itself a relatively small company challenging entrenched incumbents. It was locked in a legal battle with Apple over the legal rights to the graphical user interface. It was in the midst of the OS/2 wars with IBM. And it was fighting to break Novell’s dominance of the networking market. In short, Microsoft feared the incumbents they were trying to displace would use the patent system to fortify their dominant positions in their respective markets. They thought their chances in the marketplace were better than their chances in the courtroom.
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A judge has dismissed a lawsuit involving a bogus software patent I wrote up last year:
Judge Douglas Woodlock of the U.S. District Court for the District of Massachusetts in Boston denied a complaint by Skyline Software Systems that the Google Earth mapping software of Google’s Keyhole infringed Skyline patents.
The judge also denied motions from both parties on whether the patents in question were valid, but left the possibility for either party to reassert these issues if they do so before April 20. He canceled a planned trial date set for June.
In his ruling, Woodlock held that Google’s system does not attempt to render views of Earth’s terrain, a key claim of the patent held by Skyline, which is based in Chantilly, Va., and offers its own “fly through” three-dimensional software.
Hat tip: Google Copyright Blog, which doesn’t appear to be officially affiliated with Google, but has some good commentary.
Brad Smith, Microsoft general counsel, 2007: “Protection for software patents and other intellectual property is essential to maintaining the incentives that encourage and underwrite technological breakthroughs. In every industry, patents provide the legal foundation for innovation. The ensuing legal disputes may be messy, but protection is no less necessary, even so.”
Bill Gates, Microsoft CEO, 1991: “If people had understood how patents would be granted when most of today’s ideas were invented and had taken out patents, the industry would be at a complete standstill today…A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose.”
It sure would be unfortunate if the giants were able to use software patents to squelch start-ups.
IEEE’s Spectrum has published an article in defense of patent trolls. Mike Masnick has a good critique of the article here. But I wanted to point out something that I think the article gets right (sort of):
The pejorative label [“patent troll”] itself does harm. Legal decisions, and more notably settlements, in patent cases are affected by the media’s portrayal of the parties. If a company is slapped with a disparaging label by the media and that labeling affects business, sales, cooperative arrangements, and the company’s stock, there is an incentive to settle or withdraw from a litigation that may be the impetus for the label. Limiting or restricting patent protection only to that which is “commercialized” thus inhibits the progress of science. Such inhibition contradicts the principles of the patent system established by the U.S. Constitution.
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