Every week, I look at a software patent that’s been in the news. You can see previous installments in the series here. This week’s patent comes to us courtesy of Ars Technica, which reports that Comcast has successfully beaten back an attempt by Caritas Technologies to extend this patent to apply to VoIP. This is good news for the IP telephony market.
The patent covers teleconferencing in which control functions are done via the Internet, while the actual calls are placed via the traditional telephone network. I think that’s a pretty obvious idea. But instead of belaboring that point, I’d like to talk about patent scope a little bit.
Continue reading →
Via Slashdot, here’s more evidence that open source community has reason to be concerned about the Novell/Microsoft agreement. In a question-and-answer session at a SQL Server conference, Microsoft CEO Steve Ballmer said:
Interoperability is always good for the customer, and it’s important. And we know customers want the interoperability that the hands showed between the Windows world and the Linux world.
“We’ve had an issue, a problem that we’ve had to confront, which is because of the way the GPL (General Public License) works, and because open-source Linux does not come from a company–Linux comes from the community–the fact that that product uses our patented intellectual property is a problem for our shareholders. We spend $7 billion a year on R&D, our shareholders expect us to protect or license or get economic benefit from our patented innovations. So how do we somehow get the appropriate economic return for our patented innovation, and how do we do interoperability. The truth is, because of the complex licensing around the GPL, we actually didn’t want to do one without the other.
I think this is a case where language has become a serious impediment to clear thinking about these issues. When Ballmer says that Linux “uses our patented intellectual property,” he almost certainly does not mean that Linux is in any way derived from Microsoft products, or that the people making Linux have somehow been free-riding off of Microsoft’s R & D efforts. Linux developers have repeatedly stated that Microsoft needs only to point out the infringing lines of code, and the Linux team will rip them out and replace them with code they write from scratch.
Continue reading →
It occurs to me that the popularity of blanket patent cross-licensing agreements among software firms is pretty strong evidence that software patents don’t do much to incentivize creativity. This isn’t how healthy patent or copyright markets behave. For example, when’s the last time two big Hollywood firms announced blanket cross-licensing deals for their movie libraries, wherein each promises not to sue the other for copyright infringement if they pirate each others’ movies? Or how often do pharmaceutical companies sign blanket cross-licensing agreements permitting each to produce the other’s drugs without paying for them? Or, for that matter, how often do software companies sign blanket cross-licensing agreements for their software copyrights?
The reason these things almost never happen is that movie copyrights and drug patents represent genuine economic assets with clear boundaries. A movie copyright protects the right to distribute a particular movie. A drug patent represents the right to manufacture a particular drug. And a software copyright represents the right to distribute a particular bit of code.
Continue reading →
It’s been over a week now and it’s interesting to meter the reaction to the Microsoft and Novell deal. Popular, mainstream reaction has been generally positive–this could create a win/win for the companies, and consumers will benefit form the partnership. But for those more steeped in the open source community, there have been charged responses that indicate a chasm. Some see the agreement as legitimizing open source, at least in the eyes of the broader (Windows-dominated) marketplace. Others view this as a deal with the devil that will ultimately hurt open source and the GPL. The recent Samba team response is clear: the GPL is a zero-sum game–you exploit open source software for your gain to the detriment of others (ie. the "community"). Under Samba’s view, the Microsoft & Novell deal doesn’t enlarge the pie, but only unfairly redistributes it.
Is this the same sort of broad ideological split that separates money-making capitalists from share and share-alike Marxist communists? Or is the split more indicative of a narrow divide about what is better for software innovation, closed (or patented) or open software? Or even narrower still, are we only talking about whether the Microsoft/Novell arrangement violates the specifics of the GPL? I don’t really know–and perhaps a complete response incorporates answers to all three questions.
Tim points to the threat of a split in his post last week. He states:
Microsoft is laying the groundwork for splitting the open source community in two. On the one hand, you’ll have a handful of "open source" companies that sell products like Linux under the umbrella of cross-licensing agreements with Microsoft and other big patent holders. On the other hand, you’d have the rest of the open source community. This would give Microsoft cover to sue medium-sized open source firms and say "all we’re asking is for company X to go legit like Novell." Once they’ve collected a few scalps, they might be able to scare the business community away from buying open source software from vendors that haven’t joined the protection racket.
As I said in my post on this, I welcome these patent agreements. The Microsoft/Novell covenant not to sue is an example of market participants contracting around or within the patent and copyright legal system to reduce the transaction costs of negotiating, monitoring and enforcing licenses. Far from creating a legal cloud, unilateral or bilateral IP agreements work to create a workable opening for innovative developments in an already existing cloud of assertible (if not all enforceable) IP rights.
But I can’t agree with Tim on the following, when he describes the MS / Novell agreement:
Continue reading →
This week I’m going to consider NTP’s patents on wireless email. Fresh from its settlement with Research in Motion (makers of the BlackBerry), NTP has sued Palm on Monday over the same patents:
Apparently, the $612.5 million that patent holding firm NTP got out of RIM for its questionable patents wasn’t enough. The company (really, a group of lawyers) has filed a lawsuit against Palm as well. Apparently, the firm is claiming patent violations on the same five patents it used against RIM, as well as two additional ones. However, considering that the US Patent Office has given final rejections to two of the patents in the RIM case and indicated it’s likely to reject the rest, it would seem like NTP doesn’t have much of a leg to stand on. It’s unclear what the other two patents are, though they could be from some new deals NTP has cooked up to get its hands on more patents for the sole purpose of squeezing money out of companies. As for the rejected patents, NTP has indicated that it will appeal the patent rejections–so perhaps they hope to cause enough trouble for Palm while they drag out the process that it’s forced to settle as well.
This is a horrible misuse of the patent system, and is simply taking hundreds of millions of dollars away from what should be a developing market and putting it in the hands of a bunch of greedy lawyers who have done nothing to help move the technology forward in the market place. If you don’t recall, NTP was a holding company that owned some disputed exceptionally broad patents on a concept that was basically “wireless email.” An earlier company had tried to do something with the patents, but failed in the marketplace. RIM came along and successfully innovated in the marketplace (while being a bit of a patent menace itself), and suddenly NTP claimed that no one could do wireless email without paying them for the privilege. The patents were incredibly broad and perfectly obvious and never should have been granted (something the USPTO later would admit in rejecting them). Yet, due to the increasing uncertainty over the lawsuit, and the pressure that put on RIM’s stock, the company was forced to settle, taking money away from R&D efforts and sales and handing it over to the lawyers at NTP so they could turn around and sue more companies that were actually successfully innovating and building products and services people wanted.
Mike’s analysis is exactly right. Here is the original patent. It’s important to emphasize here that there was never any allegation that RIM or Palm ever copied anything from NTP or its anyone else associated with these patents. By all accounts, RIM and Palm developed their products completely independently. But that’s irrelevant in patent law: once one company “invents” something–even something as broad as “Hey, maybe we could transmit emails wirelessly!”–and gets a patent for it, no one else is allowed to build that invention without permission from the patent holder.
That’s clearly absurd in a case like this, where the scope of the patent is so broad as to encompass an entire industry. Yet despite the evident absurdity of these patents, and despite the fact that the patent office is now scrambling to correct its mistakes, NTP is still able to extort hundreds of millions of dollars from other companies. And, as Mike points out, it’s truly perverse that our patent system is transferring hundreds of millions of dollars from innovative companies to a pack of greedy lawyers who have never developed a useful product in their lives.
Via Luis, here’s a good analysis of the ominous aspect of the Microsoft-Novell deal:
This is not a religious argument about open source, it’s a matter of respect for a community that works together, and the wishes of creators. If I write something and put it under the GPL, then I want it under the GPL where all of us working on it can use it. I don’t want it to be made proprietary, for someone else’s benefit, due to some shady deal and legal technicality. Commercial yes (and encouraged), proprietary no.
In Novell’s world, if I write something and GPL it, Novell will try to convince customers to buy support from Novell instead of from me (the original author) because of some nebulous, unspecified, almost-certainly-bullshit “IP issues” hinted at by Microsoft and legitimized by Novell for the price of $348 million.
Continue reading →
I think one of the best pieces of evidence that patents are harmful to the software industry is the way that software companies’ behavior changes when they’re facing bankruptcy. A couple of weeks ago I discussed Transmeta’s transformation from an innovative technology company into a patent troll. Back in June, I covered Creative’s lawsuit against Apple after losing in the marketplace. This week we’ll consider SGI, another company with a proud history that has sadly descended into trolldom.
If a software patent were an ordinary productive asset like a plot of land or a truck, SGI’s behavior would make no sense. If somebody were squatting on SGI’s land, they would evict him immediately, they wouldn’t wait until they were facing bankruptcy before defending their property rights. Likewise, Disney or Merck wouldn’t tolerate another company using its movie copyrights or pharmaceutical patents without permission. Yet here we have SGI suddenly interested in suing over Patent #6,650,327, granted three years ago. Why didn’t SGI file this lawsuit back in 2003?
Continue reading →
Microsoft and Novell announced a collaborative effort. Whoa, this is big news! Windows and SuSE Linux, proprietary and open source, Microsoft and Novell–working together? Well, yes, according to a recent announcement. And for this collaborative effort to have even been formalized, a required element was some intellectual property rights housecleaning.
Microsoft’s press release says this:
First, Microsoft will work with Novell and actively contribute to several open source software projects, including projects focused on Office file formats and Web services management. Second, Microsoft will not assert its patents against individual noncommercial open source developers. And third, Microsoft is promising not to assert its patents against individual contributors to OpenSUSE.org whose code is included in the SuSE Linux Enterprise platform, including SuSE Linux Enterprise Server and SuSE Linux Enterprise Desktop.
From an intellectual property perspective, numbers 2 and 3 standout – Microsoft’s legally binding promise not to assert its IP rights against SuSE Linux.
What is Microsoft doing here? It’s trying to put SuSE developers at ease that they won’t be sued. So there’s no need to obtain a license from Microsoft. Furthermore, there’s no need for sublicensing – which is particularly important for the decentralized nature of open source development.
Non-assertion covenants (also called a “promise not to assert” or “covenant not to sue”) are binding agreements. It’s a “promise” but it’s still legally enforceable under the doctrine of promissory estoppel–if Microsoft were to withdraw its promise, anyone who justifiably relied on the promise and suffered harm from the withdrawal can sue. They are ways for one party with intellectual property rights to create zones of enforcement and increase certainty for other parties. Its an example of market participants contracting around (or within) the patent and copyright legal system to reduce transaction costs of negotiating, monitoring and enforcing licenses.
Non-assertion promises are better than RAND (Reasonable and Non-Discriminatory) licenses. What is “reasonable” and “non-discriminatory” depends on the particular circumstance and is open to legal interpretation and business negotiation hassles. Furthermore, RAND does not mean royalty-free. For more on Non-assertion covenants see Andy Updegrove’s informative blog post.
I believe we’ll see more and more of these non-assertion agreements from IP rights holders. And I expound further on this in my posting at the ACT blog.
Via Software Patent Watch, Slashdot has a review of Ben Klemens’s 2005 book, Math You Can’t Use: Patents, Copyright and Software:
Most of the rest of the book shows how software patents in the real world create problems. He cites interviews with venture capitalists by a University of Texas researcher in which they say that they just expect to be violating patents left and right in the normal course of business. He cites another set of researchers who surveyed technologists in a variety of fields, and found that companies in most fields mostly patent in order to protect their inventions, while computing companies are most likely to patent so they can game the system.
Klemens seems to be downplaying the role of open source in all of this. In Chapter 6, he points out that the U.S. software market is evenly split between software companies (32.6%), consultants (36.4%), and in-house software (31.0%). That is, most software isn’t written by software companies, and some of that not-software-company software is OSS. It’s the decentralization, not the openness, that matters. Patents have never been applied to a decentralized industry before, and they don’t work there because independent invention is not a valid defense against claims of patent infringement, and independent invention is inevitable in such a decentralized industry.
Sounds like a great book. I’ve put it on my Amazon list, and I’ll blog more about it once I get a chance to read it. You can get your copy here.
Every week, I look at a software patent that’s been in the news. You can see previous installments in the series here. But this week, Luis Villa has done most of my work for me:
IBM has generally been very good about supporting open source, and as steven says, they’ve been very up front about their motivations- they are doing it because they want to make money, and they think open source and open standards help them make money.
This consistency has extended to their opinions on patents- they have made it clear that they think the system is broken, but they have also made it clear that they think patents are a perfectly legitimate business tool, and that they want to fix the system so that they can continue to make money on patents…
So it shouldn’t be a surprise to anyone that IBM are using patents to go after Amazon. What surprised me, after skimming the patents, is that the patents they are using to go after Amazon are so broad. With the exception of one (which is so opaque I can’t figure out what exactly it is patenting) a cursory reading suggests that these are exactly the kinds of broad, obvious patents that everyone (even IBM) at least says on the surface that they hate. Maybe by demonstrating that they have what Tim Bray calls ‘the Internet Tollbooth’ they think they can precipitate real patent reform, but that seems unlikely; more likely they just want a cut of Amazon’s pile. Shame, really, but it shouldn’t be a surprise.
Companies have a fiduciary duty to their shareholders to maximize their profits, so it shouldn’t surprise us when companies do legal but shady things that enhance their bottom lines. However, it should make us ask why the patent system is giving companies the incentive to engage in such rent-seeking. It does nothing to promote “the progress of science and the useful arts” to give companies monopolies on ideas like “System for ordering items using an electronic catalogue” that are so obvious that it’s inevitable that dozens of companies would independently “invent” them.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.