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Software patents – a protection racket?

by Richard Hillesley

Software patents are a racket for the protection of incumbent cartels and monopolies against innovation and competition, says Richard Hillesley

The casual observer could be excused for believing that litigation and teams of lawyers were the largest part of technical innovation in the computing industries, such has been the part played by litigation and threats of litigation around patents, copyrights and trademarks during recent years.

Litigation has become a highly profitable way of doing business. Big money can be made for a relatively small outlay and litigation predicated around the “ownership” of ideas, patents and copyrights requires minimal investment in staff, research, manufacture or the trading of hard goods.

In fact all these activities have become superfluous in some areas of industry where possession of “Intellectual Property” has become the primary objective of trading. Pick the right target to make a claim against and the chances are that they will pay up before it gets to court. Throw enough patents at the competition, and you can slow them down. Make a patent stick and you can make a lot of money.

In theory, patents are granted only after strenuous tests of originality and appropriateness have been met, and should only be conferred on inventions that are entirely original, are not obvious, and have the potential to radically transform the way things are done. In practice, the bar has been lowered to allow a proliferation of trivial and contestable patents, especially, but not only, in the area of software and business method patents.

Patents, copyrights, and trademarks are lumped together under the misleading term “Intellectual Property” which, in the words of Richard Stallman, “is at best a catch-all to lump together disparate laws” under the umbrella of an “analogy with property rights for physical objects”, which is “at odds with the legal philosophies of copyright law, of patent law, and of trademark law… These laws are in fact not much like physical property law, but use of this term leads legislators to change them to be more so.”

Misuse of these laws has taken effect in the smartphone industry, where Google and Android have been the particular target of a pincer movement between Microsoft and Apple, aided and abetted by Oracle and others, the primary purpose of which is to inhibit users and manufacturers from using Android phones. There is a lot of money at stake, and legal action isn’t limited to Android or Microsoft or Google. Samsung and Apple are suing each other. Lodsys is suing Apple’s app developers. Nokia and Apple have made a settlement. Apple has applied to trademark the term App Store to describe a store that sells apps. Microsoft is suing Motorola and Barnes and Noble in a by-proxy argument with Google over Android. Apple is suing HTC, and Oracle is accusing Google of bringing down the world around Java. Google has bought Motorola, because Motorola owns more patents on phones than any other business.

Nobody seriously believes that any of the companies or individuals accused of infringement has practised industrial sabotage or stolen the ‘property’ of anybody else. The purpose of these actions has been to make a fast buck or to inhibit competition. Ownership of software patents is not about innovation or originality. The cost of fighting a patent infringement case, searching for prior art and the recruitment of lawyers, is prohibitive and a distraction, so in many cases a settlement is made without recourse to the law and the validity of the patent is never contested.

It follows that many patents are claimed for no other reason than protection against litigation by other patent holders. Robert Barr, the patent counsel for Cisco Systems, told the hearings of the US Federal Trade Commission in 2002 that: “It makes more business sense to assume that, despite the fact that we do not copy other company’s products, and despite the fact that we do not derive solutions to problems from the patent literature, we will be accused of patent infringement. The only practical response to this problem of unintentional and sometimes unavoidable patent infringement is to file hundreds of patents each year ourselves, so that we can have something to bring to the table in cross-licensing negotiations. In other words, the only rational response to the large number of patents in our field is to contribute to it.”

Patents are a protection racket, and the options are to pay up, cross-license, or get out of the business. The effect is to protect the incumbent monopolies and cross-licensing cartels against innovation and competition from others. As Bruce Perens once noted “there are simply so many software patents, on so many fundamental principles, that no non-trivial software program could exist that was licensed by all patent holders with claims reading on the algorithms used. This is regardless of whether it is proprietary or free software.” Software patents have little or nothing to do with the enhancement or protection of innovation.

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    • nonya

      I agree 100%! What needs to be done is:
      1-Patents and copyrights are granted for 5 years, privisionally. If no significant effortis are being made after 3 years to produce a product or publish/distribute works, its in the public domain permanantly. There will be no extension beyond the original 5 year term for any reason!!!!! After 5 years, everything is in the public domain forever. And this needs to be applied retroactively…any patents/copyrights over 5 years old immediately revert to public domain forever.

      2-Software and business method patents go away forever.

      3-Patent/copyright applicants shall bear the full cost to the USTPO FOR FULL INVESTIGATION FOR PRIOR ART! Patents shall only be granted on unique physical products.

      These things would eliminate most of the abuses and patent trolls.

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    • this article, while a step in the right direction of recognizing the problem with patents, does not go far enough and is a bit confused and misdiagnoses the problem. As I explain in LinuxUser: Software patents – a protection racket? — Or, the problem with conventionalist criticisms of patents —

    • Shawn

      All software are algorithms. This is a proven fact. All business processes are algorithms. If it manipulates information, it is, by definition, an algorithm. And by law, algorithm can not be patented. It’s not just a protection racket, it’s an illegal protection racket.

    • Brent R Brian

      Let’s not forget that Linux is protected by the GPL.

    • suezz

      great article now we need the cnn’s, fox news, msnbc to write articles like these instead of cozying up to billy gates and steve jobs

      I am so disgusted with the tech industry I am thinking of a career change. any software I write infinges on somebody patents and I don’t have money or patient for lawyers.

      If it was for open source I would of been out of the tech industry years ago. It is the one bright light of the tech industry and it’s only hope.

    • Steve C

      Do your part to stop software patent extortion. Stand up and sign an actual White House petition to direct the USPTO to stop accepting software patents!

      Stop software patents!/petition/direct-patent-office-cease-issuing-software-patents/vvNslSTq

      All other petitions can be found here:!/petitions

    • Dirk

      Surely one can see that the physical property model for IP is not the best fitting model. A better model would be government tax.
      You use something together with many others, without wearing it out. Somehow costs have to be paid, People have to pay their contribution. The same way you pay taxes for security, for roads,.. Many times this goes without a direct link with the usage of something.
      Like the tax model, this is not a fee market situation. For many items there is no alternative. In the tax model, being somewhere, you can not chose for different security options. Some “inventions”, at a certain time, are just part of what people need, do. Their are no alternatives.
      But without all the checks and balances of the government tax model, things are bound to go wrong.

    • Josh

      With regard to software patents, the most basic concepts are being confused. A discovery is something discovered. To discover is to obtain knowledge of for the first time or to see for the first time. An invention is something invented. To invent is to produce something useful for the first time through the use of imagination or of ingenious thinking and experimentation. Note the distinction. One invents a new thing, whereas one discovers a thing that already exists. For example, ancient Greeks discovered that there was a constant relationship between the diameter of a circle and its circumference. They did not invent Pi and file a patent titled “An improved method of calculating the circumference of a circle”.As absurd as a patent for calculating the circumference of a circle sounds, were the discovery made today there would certainly be several related patents filed, and at least two or three of them would be approved. The legal definition of an invention has lost touch with the distinction between a discovery and an invention.

    • Ray H.

      The crux of this issue is that the current lowering of standards for patent issuance has created an alarmingly anti-competitive, hence anti-innovative, environment. This trend is not limited to software patents. The patent office is glutted with spam patents and has been so for at least 20 years. One is left with the impression that patent examiners do not have sufficient expertise to identify invention. We, as a nation, had better wake up soon as the rest of the world is not as hide bound in its obsession with marketing by litigation. These practices clearly put us at a disadvantage in our efforts to hold our own in a fast paced world economy. Thanks to Steve C for posting the Stop Software Patents link. I will sign!

    • In the spirit of Steve C do your part to stop software patent extortion and sign a petition to stop software patents in Europe as well:

    • Jesse

      Software patents are a patent on mathematics.

      Presumably patents on mathematics is illegal.

    • Odipides

      Patents are nothing to do with technology. they exist for two purposes:

      1) To allow large organisations with full time attorneys to beat up SME’s if they come up with a competitive idea (and to get an injunction pending the oral evidence – MONTHS);

      2) To make (even more) cash for lawyers.

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