Monday, February 21. 2011
During the Web M v's MPEG LA smack-down don't forget the argument for patents - even software patents
So the MPEG LA patent platform, whose members include the mighty Apple and Microsoft are seeking to establish if they can sue Google, who are establishing a rival Web M standard and promising to give it to the world at no charge. It’s perhaps unsurprising whose side the Tweet-Blog-O-Sphere is on. Indeed, read almost any comments on Patents these days and you would be forgiven for thinking the system has been created by big business, not to in any way foster innovation, but to cr*p all over the small guy and allow lawyers in their employ and backed by an apparently endless supply of cash to force anyone challenging them to enter into a competition where the object of the competition is to see who can last longest pissing cash onto a burning fire. One obvious problem being that for most non-corporate organisations and ordinary people don’t have a cash supply that looks like anything other than like a home with furniture and TV's inside and children living in it.
So patents are bad right, and MPEG LA is just more evidence that is so? Well no, they are not. We have to be very careful not to throw the baby out with the bathwater. Patents are a good thing, indeed I would go so far as to say, overall, they are a very good thing. A subset of patents, of the pure software kind, tend to be more problematic than the rest, but still, if (and this is the crucial point - so anticipating in advance the flames this article could stoke - don't bother unless you really understand I have said "if" here), I say again "if" they are treated properly by the patent authorities they do some good. The crucial point here being that currently they are not treated properly by the system, not even close. I argue this as someone who started up a patent intelligence business a few years back and did business with a blue-chip client in the European technology space with a large portfolio of patents. While I’m no legal expert, I am giving a considered opinion. I’m not firing from the hip.
To understand how I can begin to defend software patents we have first to go back over some of their history and understand why they now have such a bad wrap. Back in the 80's and much of the early 90's it was common knowledge that you couldn't patent software. Except it wasn't knowledge, it was actually wrong. It was possible, but it hadn't been done very much and there hadn't been test cases to prove software patents could hold water and there was a widespread somewhat misplaced belief they would not. Then during the early 90's there was a series of rulings in the US which tipped the balance. Some notable large corporations woke-up to the fact patents could be applied for and would be granted - the most notable of all being IBM and they started filing en-masse.
BUT, by this time, with regard to patents, the software space had become quite unlike any other technology space. In fact there were a number of factors that would combine to turn the whole enterprise into the grade-A disaster zone that would lead Amazon’s Jeff Bezos (who got the infamous one click patent granted) to do an about turn and criticise the software patent system at length and in depth. And now most of the non-corporate world whole heartedly agrees with him. Mention software patents to a lay-tech audience today and you are quite quite likely to be greeted by hisses boos and run an increased risk of assassination.
It’s worth looking briefly at each nougat of disaster which has contributed to this sorry state of affairs. First, during the 90‘s, the rush to apply for software patents came to resemble the privatisation of state assets by Russian oligarchs in post communist Russia. Surely I’m over egging the cake? Not at all. PriceWaterhouseCoopers have suggested intangible assets make up over 60% of the value of a company (at least in the UK, we can assume more for tech companies in the US), an estimated 70% - 80% of that value is attributable to patents and tech takes up a full 20% share of the US economy alone. Since the US economy is some 10 times the size of the Russian economy, my back of the envelope calculation estimates some 1.1 trillion of the value of the US economy to be attributable to tech sector patents. The share attributable to software patents in particular is difficult to judge but if you consider the biggest tech companies in the US are currently Apple, Google and Microsoft and a substantial proportion of their patent applications are for software, you get the picture. By any measure, the value of patents is a very, very big deal.
By the time business woke up to the fact software patents would be granted, unlike for any other area of the patent database, there was a massive hole. In other areas, patents were applied for as technology advanced and the patent database always reflected a general understanding of where the leading/bleeding edge was at. So in most (hardware tech) industries the culture of identifying patents evolved and was accepted.
But in the software industry, the vacuum on the patent database was balanced by an even bigger body of existing practice with lots of programmers/engineers happily co-operating and advancing the status-quo. Being software, the state-of-the-art for that body of practice was poorly documented and frequently maintained purely in the social domain, passing from brain to brain.
Following IBM’s lead, big tech companies, started to make a patent “land grab” and now the once bereft database is full. Along the way many patents have been granted for techniques and practices that have long been employed by the software industry. Now a simple Google search on the phrase “software patent” is sufficient to show this has resulted in a massive amount of indignation, hatred even.
Work I once did with a US supplier gives perfect illustration to the practical consequences of the resulting problem. A number of years ago I was working in a European company and wanted to implement a Program-Grid in a European Electronic Program guide product I was responsible for delivering (A Program-Grid shows TV channels in rows on the first column on the left and TV shows over time along each row on the right). However our TV software supplier, though they would have liked to be able provide us with a grid, was stymied by a cluster of US patents covering Grid functionality. As a result they wouldn’t provide an example of a grid working and we weren’t sure the software could support it. More than that, they wouldn’t talk about the possibility of implementing one at all. The way they evaded discussion seemed, by European standards, ludicrous. They literally blanked conversations in which the term “Program-Grid” used, changing subject as though it hadn’t been uttered at all. I can only conclude this behaviour was a direct function of the level of fear that exists in the US with regard to possible legal tangles and the possibility of being subpoenaed. I can’t help but think European employees would have sprinkled copious nudges and winks into the conversation, but I have to say the staff of this US supplier were always absolutely, and impressively consistent in avoiding doing so.
One day, one of their employees did however, without even the slightest hint of knowingness, show me how their software could be used to navigate a “plant-planner” with the months the plants would be in various stages of growth (seed, shooting, in bloom etc.) along the x axis of a grid type display and different types of plants on each row. This wasn’t shown on the TV Set-Top box we would be deploying but rather was shown on a PC running the same layout engine the STB used. Hmmm, I thought, this plant planner software can be rewired so it can display a grid of TV program data. So it was extremely helpful to know the software could run a plant-planner.
For me, this story illustrates in detail all that is wrong with Software patents as things stand. A Program-Grid is a specific instance of a more generalised design-pattern. The same pattern was already employed in software from spreadsheets to databases to play-out lists at broadcast headends, to train scheduling systems. Using this pattern more specifically, to display a time based grid of TV programs on a STB may have been a new specific application, but the time-grid pattern almost certainly wasn’t (proving that with paper based documentation of the state-of-the-art when the patent was applied for was a different thing though). The very fact plant-planner code could be used as a TV Program-Grid simply by changing the data piped into the grid, gives perfect illustration to this point.
The patent examination process has all too frequently wholly and manifestly failed to pick up on this kind of fatal weakness in software patents. Whilst usually thorough and skilled, examiners aren’t sufficiently trained in the process of generalising the nouns in the software patent claims and seeing what the actual functional design is that is being claimed (As an aside, I believe the best way to do this is to employ object modelling tools and techniques. The software architect process where systems are modelled using objects and decomposed into more general “inheritance” structures, provides a great technique for formally identifying precisely this kind of problem).
Most usually it is reasonable to assume the nouns used in Patent claims have been made as general as possible to make the patent as broad as possible. It doesn’t so often occur the other way-round. Fail to “see-the-trick” and you will fail to see there is no substantial technical merit in the new features. In the case of the Gemstar grid patents, when subject to challenge and further scrutiny, it turns out the courts, agreed with me. They have now been struck down in a number of territories.
But still the patent database “land-grab” resulted in many such patents being granted. And it is is now a huge problem for the tech industry as this figure probably runs into thousands, quite possibly tens of thousands. The very fact they are granted creates FUD (Fear Uncertainty and Doubt) and FUD is only a friend of big businesses with deep pockets. To understand the strategic power it conveys and how it gives advantage to the corporate behemoth, just consider this. If a small-guy has a questionable patent that can probably be turned over in court and goes to a big-guy and says “I have a patent and I can hurt you with it”, his approach will have little or no effect. Indeed the big guy may even welcome it, knowing the small competitor will suffer disproportionately with the outlay of lawyers fees. On the other hand if the big guy goes to the small guy, with an equally dubious patent, saying the same thing, the small guy has a terrible burden to bear. FUD is win-win for the big guy (and WIN-WIN for the lawyers).
If you didn’t already have a strong opinion on software patents, you may by now be wondering why the hell it is I am arguing for them.
The answer is, in my view, everything I have discussed so far that is wrong with software patents, is a problem relating to how they have been implemented. Not a problem intrinsic to the very notion. I know many people will have a disagree with this, but there are I think several important points that are consistently missed and misunderstood in the whole debate.
First, note how the number of “stupidly simple” software patents the media is reporting has gone down considerably from the days when it seemed every month brought a new equivalent to a Gemstar Program-Grid patent, Amazon one-click patent, or BT hypertext-link patent. Yes there are still the headlines, but in most cases delve into the detail and you will find what is claimed is actually quite specific, often (dare I say it) has merit and doesn’t put the well established practices of entire industries at risk. This is because the morally dubious patent database in-filling process is now complete. The database is now full up to the state-of-the-art and the gaps are gone. This isn’t to any measure justification for the bad patents that remain granted and unfortunately the database remains a terrible mess but moving forwards the same opportunities to grab well established programming techniques and patterns simply don’t exist. Most people don’t bother to look beyond the headlines and see for themselves whether the patent claims have merit. To see my point all you have to do is actually try to think of something new to register, and then actually go through the process of researching prior art and you will find it is not at all easy. Indeed, you will quickly discover the best way to do it is to do hard work on prototypes so you are actually advancing the state-of-the-art and genuinely getting into new territory armed with new use cases that come about through the hard work of prototyping evolve new highly innovative features. i.e. the best way to identify patents to file is through doing real innovative work.
Another point is that the headlined bad patents ended up not being so bad. [The only one of the three that has stood-up is the Amazon one-click patent.] [- EDIT, this is in fact wrong - I was forgetting even this one has been overturned, so in fact all three of the most notorious cases have - further making my point] The problem in at least one of the other cases, was that with proper examination processes (using object modelling) the patents wouldn’t have been passed in the first place.
My second point is, even though now we have moved beyond the dubious low-hanging fruit “in-fill” patents even viable ones always appear simple after the event. This is just as true for mechanical inventions. The Black and Decker workmate for example, was an excellent invention which made it’s inventor a small fortune. The fact is he combined the idea of two existing objects, a clamp and a table, in a way that will now appear obvious to many. But it is the hallmark of many of the best inventions that they appear simple in this way after the event (and in most cases after the work of innovation). This same perceptual adjustment as to the difficulty of solving the problem after the event applies just as much to software patents as any other branch of technology. But, software patents now have such bad press and the patent industry sits on a database with so many patents of questionable validity, there is far less goodwill and willingness to acknowledge the “good” patents have merit.
My third point is how the Free Software movement is being unwittingly co-opted by the big corporations into getting the regulations the big corporations want on the statute books. I’m referring in particular to the oft used phrase “Patent Troll.” A phrase coined by Nokia in particular in the early noughties as they were lobbying for patent reform - but only of a kind that suited them - and that is now used frequently and liberally by all sides of the debate.
In the climate of negativity surrounding software patents the phrase carries heavy emotional weight and that is why Nokia promoted it. In the body politic of the tech ecosystem (as with any political space), the lobbying of incumbent powers is balanced out by the lobbying by radicals and hopefully the legislation passed implements some middle way acceptable and in the interests of the greatest number of people. The phrase “Patent Troll” makes any organisation so referenced sound even worse than the corporate multinational. A special kind of evil of pure legal kind. The phrase has since come to represent in the lay mind the worst kind of opportunists and despots responsible for making the unfair “land-grab” that don’t even have any means of production and so contribute nothing of net-value to the economy. Nokia has been arguing that Patent Trolls - patent owning organisations - must be stopped and the way to do that is to restrict granted patents to companies which own a means to produce the invention. A variant of the “use or lose argument.”
However stand back an look at who many of these so called “Patent Trolls” are and you will find amongst some undoubtedly aggressive and bad organisations, they include patent portfolio licensing companies that have collected and enforce patents owned by small innovators. These companies offer a channel for the small guy to retain and enforce the value of his patents through sharing costs. Naturally the portfolio owning company takes a share of the profit of licensing the patents to others in the industry but all businesses have costs to bear and the technique is as legitimate as, for example, selling on your debts to a debt recovery service.
Finally, consider if you come up with a really great new piece of software together with some friends/colleagues. The three of you work for six months delivering a first-cut product implementing innovative new features. Imagine doing this in a world without patents, a world where multimillion dollar corporations with deep-pockets and large armies of software developers can shamelessly rip-off your work and with the prototype you have provided in hand, quickly copy it with an even richer feature set and integrated into a full tech ecosystem. The real advantage Nokia’s proposals confer is the ability to impose a barrier to entry that will help prevent upwards competition from agile smaller start-ups. Sometimes in arguing the detail we forget the simple stuff. Patents provide a vital part of the paltry protection small business can wield against big business.
The use of the phrase “Patent Troll” benefits big business two ways. Not only does it play very nicely into the notion only companies owning existing means of production should be able to play, it deflects attention from the fact most of the morally dubious patents stored on the patent database are owned not by so called trolls, but by the corporate leviathans themselves. Patent reform lobbying is unlikely to result in the removal of the patent system altogether, but is much more likely to follow the kinds of proposal a company like Nokia put forward.
By all means lobby to amend patent law, but in doing so, don’t dismiss patents lightly, even software patents. If the system is properly implemented and the problem of poor examination standards and the legacy problem of “land-grab” patents addressed, they can be the friend of the small guy, the friend of the true innovator and will help competition more than hinder it.
Lodsys issue a response
Well that makes a change. Lodsys, instead of hiding behind lawyers, have issued a very public Q&A on their approach to iOS vendors offering in-app purchase. Even if you don't agree with software patents at all, it's refreshing to see a company like Lodsys
Tracked: May 16, 20:01
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There is one thing missing from your argument: any actual evidence that patents are an effective way of encouraging innovation. Every academic study I have read suggests they are not.
Patents impose huge costs, and given the current evidence I see no convincing argument that they produce net benefits.
The software industry is a great example: software was not patented until a court ruled they could be in the 1980s. If patents worked the pace of innovation in software should have increased. In fact it decreased.
Software is also a great field to visualise "what if" scenarios. What if Visicalc had a patent on spreadsheets? What if IBM had a patent on the concept of an operating system? What if Bell had patents on any thing vaguely unixy?
It's a good criticism Graeme. I'm not sure how you can have an objective measure of the pace of innovation though to be able to refer to such as a fact.
The most common measure of innovation for an industry is of course patent applications and they have increased year on year - but I understand given the position you have adopted you would consider this a circular argument. I should probably add, I'm not a fundamentalist re:patents and I'm not sure any of us know or can objectively know what will result in more or less innovation. I can only talk from my own experience having set up a venture in 2002 based on a great innovative technology and with massive market potential. Ultimately it didn't work commercially (or was before it's time!) My biggest concern was that the potential was so great all the innovative work we were doing would simply be ripped off - indeed if the solution was more successful than it was, undoubtedly it would have been. Being ripped off would probably then result in the greater quantity of apparent innovation (e.g. the incumbents would have improved their products by copying and evolving ours) but then if patents weren't an option there is no doubt I would not have bothered to start the business in the first place. So I'm not sure how there can be a measure of innovation around this and what it tells us if we plumb for one. I'm basing my judgement on my experiences and what we feel strongly to be true through experience can't always be proved by objective measures. I could be wrong but it would take a lot to convince me.
Sorry I took a while to approve your post - I missed it sitting in my Inbox.
"Finally, consider if you come up with a really great new piece of software together with some friends/colleagues. The three of you work for six months delivering a first-cut product implementing innovative new features. Imagine doing this in a world without patents, a world where multimillion dollar corporations with deep-pockets and large armies of software developers can shamelessly rip-off your work and with the prototype you have provided in hand, quickly copy it with an even richer feature set and integrated into a full tech ecosystem."
Well now, so can independent developers. They can rip off work of larger corporations and provide extra value that corporations either won't cover or niches that they miss.
Since corporations are always after the bottom line (money), if there's little money in it, they probably won't touch it. (Maintenance costs, testing, feature requests, etc.)
And you completely forget about COPYRIGHT that exists.
Companies would have to reverse engineer or completely re-write code done by others, which while less of a cost, is still a cost.
History proves that when a corporation tries to master many different directions, they fail at most.
Rather, it would make more sense for a company to buy out a startup and have them maintain and work on that branch of software instead of just copying and having to split their valuable dev's time between projects.
Software patents = ALL BAD
>>> "Well now, so can independent developers. They can rip off work of larger corporations and provide extra value that corporations either won't cover or niches that they miss.
Since corporations are always after the bottom line (money), if there's little money in it, they probably won't touch it. (Maintenance costs, testing, feature requests, etc.) "
There's nothing stopping the small guy from doing that now. If there's truly little $money at stake, the bigger player won't come after the little guy (in fact might rather appreciate the complimentary product/service). They can't come after you unless you infringe.
>>> "And you completely forget about COPYRIGHT that exists."
Software copyright's are nearly useless to protect innovations. We had this in the 80's and all infringers had to do was clean-room implementations (hire engineers that never saw the code, have existing engineers write specs that are passed to the new "clean" engineers - and re-implement).
It's a good point and yes small developers can compete with large corporations in some areas. But I think you undermine your point when you say:
"Since corporations are always after the bottom line (money), if there's little money in it, they probably won't touch it. " That's kinda my point. Personally I don't go into business to be a bottom feeder.
The problem is when you are developing a new form of product and service, you are subject to a form of jeopardy; one that kicks in if your innovation is "too good" or worth "too much," It hardly seems fair that it is this class of innovation that will be shamelessly ripped off by the large corporate.
And I haven't forgotten about copyright. Copyright is good. It just isn't enough of a defence. Actually the actual code writing is only a small part of the cost of setting up a new software business. Plus don't forget when you are doing something for the first time, there is a big investment in time required to prototype and evolve the design. Haven't you ever lost some work got depressed at how many hours of work you have lost and then been surprised to find it only takes you only about 1/5th the time to recreate what you lost? It’s that much quicker because you have already worked through and solved the problems.
The same applies to developing an application. The small start-up does the hardest work innovating a new design and the corporate with deep pockets gets to see a working model to plunder at will.
You are right to point out that often the corporate will buy out a smaller firm - especially if the quality of the engineering is good. But still, without patents the smaller firm will be forced to accept a much lower price than they would have had to if they had protection. So again they have done the innovation, but don’t get to reap a fair portion of the rewards.
If patents really benefit start-ups so much, why do the big guys lobby so hard for strong patent laws?
I would argue that the effects of large patent portfolios combined with cross licensing deals are a significant barrier to new entrants, and this far out-weighs the effect of a small firm's founders getting a better price because of their patents.
>>> "If patents really benefit start-ups so much, why do the big guys lobby so hard for strong patent laws?"
The large software guys aren't - they are lobbying to reduce or eliminate software patents.
Large established software companies are able to leverage their existing deployments and customers. They have little incentive to innovate - hence why majority of innovation comes from small/independent shops.
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