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Posted on 06/29/2003 6:18:58 PM PDT by E. Pluribus Unum
The situation for Linux looks even worse. The recent trademark infringement claim by SCO against Linux has already created turmoil. The fear is that with patent law allowed, the floodgates would be opened and Linux distributors swamped and bankrupted by court claims - with Microsoft leading the charge.
Sadly, though, those who are most against the law change have only themselves to blame if it goes through - thanks to their failure to understand on a very human level how the world works and in particular how politicians work.
It is politicians who make the law, and it is politicians who need to be persuaded if the law is to move in the direction that you desire it to. But while they are a peculiar and varied breed, there are three things you can be fairly certain will not hold much sway with them:
Unfortunately, every coherent and persuasive argument (and there are many) made by those opposing this change in patent law fits squarely into one of the three categories above and that is why the patent laws of the EU are set to change on Monday.
The patent issue
Of course it doesn't help that the issue of software patents is so enormously complex. For every argument there is an equally good counter argument. For every assertion, there is anecdotal evidence or a logical argument that undermines it.
The basic issue at hand is whether computer software can or should be entitled to a patent. If it can, whoever has developed the software can prevent anyone else from using it and the idea and/or method behind it - unless they get permission, which usually means paying a fee.
Fair enough, you say. Except patents go beyond that - they can put controls on the process that software allows to happen. A famous example is Amazon.com and its One-Click patent. Amazon thought it would be a good idea to allow its customers to click just one button to buy a book, rather than have to go through various screens confirming their credit card, address, delivery etc.
It was a very good idea but hardly a huge leap in imagination. The tough part was writing software that would do it for you. It did and patented the idea. It then went to court to stop a competitor from offering the same thing - even if the code was written from scratch. Barnes & Noble was prevented from offering a one-click option until the two settled years later out of court. Amazon still holds the patent.
Patents exist for a very good reason however. The prime benefactors of patents are pharmaceutical companies. It costs billions to develop and test new medicines until a commercially feasible one is found. Without a patent on this, competitors would be able to copy the drug and benefit from the other company's research and development. It doesn't take a genius to work out that without this protection, there would be no new drugs.
Is software somehow different?
But is software such a different being that to use the same laws developed long ago to defend extensive research and development is to misunderstand its very nature?
This argument has raged for decades. In fact, it is the Convention on the Grant of European Patents 1973 (revised in 1991) that is to be changed by this current action. The Convention states quite clearly that "European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step" except for "(a) discoveries, scientific theories and mathematical methods; (b) aesthetic creations; (c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers".
Since the 1990s, however, the booming computer and software industry has put increasing pressure on extending patents to cover their products.
Alan Greenspan, chairman of the Federal Reserve Board and hence one of the most important men in the world economy, had this to say about the issue in April this year: "Over the past half century, the increase in the value of raw materials has accounted for only a fraction of the overall growth of US gross domestic product. The rest of that growth reflects the embodiment of ideas in products and services that consumers value. This shift of emphasis from physical materials to ideas as the core of value creation appears to have accelerated in recent decades."
He continued: "If our objective is to maximize economic growth, are we striking the right balance in our protection of intellectual property rights? Are the protections sufficiently broad to encourage innovation but not so broad as to shut down follow-on innovation? Are such protections so vague that they produce uncertainties that raise risk premiums and the cost of capital? How appropriate is our current system - developed for a world in which physical assets predominated - for an economy in which value increasingly is embodied in ideas rather than tangible capital?" If Alan Greenspan doesn't have any answers, it is hardly surprising no one else can agree.
However, the major reason why the European Parliament is considering changing the law is because of pressure from the United States. In the 1990s, the US' patent laws were flung open to all and sundry. Since then, the number of patents has rocketed and, say critics, caused Patent Office officials to be overrun, with the result that thousands of poor-quality or wrong patents are approved each year. This is creating a future legal nightmare as companies claim infringement on seemingly disparate products.
Peanut butter sandwiches
A famous example is when food company Menusaver was granted a patent for crustless peanut butter-and-jelly sandwiches in December 1999. Before you could say "chew this" it started legal proceedings against Albie's Foods for infringing its rights with its own peanut-butter-and-jelly sandwich ("the center filling is prevented from radiating outwardly into and through the bread portions from the surrounding peanut butter," reads one part of this ridiculous patent).
As it turns out, it was the efforts of one man - Bruce Lehman - that exposed every aspect of the modern world to patents. As US Commissioner of Patents and Trademarks, he forced through huge changes in US law in a very short period of time. Because of the peculiarities of patent law, he achieved this without a Congressional review and without any backing from the law courts.
Critics point to the forced closure of the watchdog Congressional Office of Technology Assessmen in 1995 - ostensibly to cut costs - and the alleged gagging of Patent Office employees, as to how such changes passed through unopposed. The only block on Lehman's activities came when his attempt to move control of the US Copyright Office from the Library of Congress to his department was stopped.
But whatever the rights and wrongs of the US' shift to an open patent regime though, it exists and US business has got used to it and so it wants it applied everywhere else in the world. In 1994, at a World Trade Organisation meeting, the US threatened to walk out unless others considered changing their patent laws.
The resulting Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement states: "Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application." The only thing stopping software outside the US now being fully opened to patent law was the phrase "an inventive step".
Following continued pressure, Japan simply followed the US' lead, bypassing the Diet Supreme Court. Then, in June 1997, the European Commission issued a Green Paper suggesting patents be reconsidered. It took three years for the European Patent Office to come up with a new version of its convention that removed the "computer programs" clause. And three years after that, we have a vote on it.
The pros and cons
So what are the arguments for expanding patent protection? Innovation, investment and harmonisation of laws across the world.
Innovation: If companies are able to protect their original work, it encourages people to strive for that new super app so they can protect it for 20 years and making a lot of money from it. Without this protection, their idea could be stolen and marketed by others. In this sense, patents protect not only large but also small companies (1994 - Stac won $120m from Microsoft after it included its compression program in Windows).
Investment: With the possibility of protecting a new invention, it will encourage companies to spend money developing new ideas. In the UK's case, several major US companies have set up in the country in order to tap into the rich vein of talent available.
Harmonisation: Clearly if you can use your patent across the world, you stand to gain a lot more than if you have to fight in each and every country. Economies of scale.
All three of these arguments are simply and easily explained and politicians instinctively understand them.
The counter-arguments are more complex. They also rely on predictive realities - "what is likely to have if".
By far the strongest argument is that software works by building on top of other software. This is certainly true and lends huge weight to the assertion that patenting software will end up stifling innovation since people will become weighed down with making sure they don't trend on others' toes. Patenting aspects of software breaks down the very process by which new software is created.
Another very strong argument that has hardly been used is the huge success built on top of common, patent and royalty-free standards. If ever there was a counter-argument to big business' innovation claim it is that the Internet is so successful because there weren't constraints or patents on it. Due to this, it has grown hugely, created new markets and so benefited everyone.
One misconception that both sides have used for their argument is that it is impossible to patent software in the EU - it isn't. If the "inventive step" can be shown, software can be patented - in fact, there are 13,000 EU software patents. Evidence, say the anti-patent crew that the existing system works fine. Evidence, say the pro-patent posse that the law is confusing and needs to be sorted out.
The argument that the US system is falling apart under the weight of daft patents and expensive litigation has been stymied by the argument that Europe will be able to learn from mistakes and introduce a better system. This has been true for numerous other aspects of modern life, particularly when it comes to the legal system, so this argument is effectively neutralised.
Unfortunately, all the other arguments fit into the three categories mentioned at the start:
Ideological argument: Enter Richard Stallman. While he makes a very convincing and entertaining performer, the ideology that he passionately espouses will never change a politician's mind. Twenty-year patents are too long (where was the computer 20 years ago?) How can you patent an idea? Governments aren't listening to what the people think. The system is too complicated. How can we not support open source?
Little-man defence: Small companies can't defend themselves against patent court cases. Big companies can have patent-sharing agreements between themselves but say no to all the little people. Little man can't understand it all. Little man can't afford patents. Big companies will just try to shut down small competitors.
To all these points a politician is likely to think "well it's a tough world out there". The reality is that business is cut-and-thrust and that most of the anti-patent arguments are about attacking the status quo or constraining large "abusive" companies. But then large companies have proven their worth at producing millions of products and making them widely available to other businesses. Idealists and small-time programmers haven't - so why should their arguments carry even a fraction of the weight?
It was this reaction to small software companies and in particular the open-source community that sparked that peculiar Internet response to things people don't like: heavy criticism and abuse.
The chair of the Legal Affairs and Internal Market Committee, Arlene McCarthy - the very person who's opinion is of utmost importance - has been turned into a hate figure by the anti-patent, pro-Linux lobby. Rather than concede her points or make an effort to understand and then persuade her she may be wrong, she has been faced with brick-wall criticism.
You are wrong, we are right, she has been told. "She's just repeating the same arguments, we sent her loads of emails pointing out where she was wrong and she hasn't even got back to us!" a hundred websites have roared. Numerous articles have appeared in the media explaining how the committee was making the wrong decision.
A lobbying conference was put together in Brussels where, surrounded by people who already agreed with them, the anti-patent lobby rushed around patting each other on the back on an argument well won. But Arlene McCarthy and other people who "aren't even listening" weren't invited. Nor were they given a chance to explain their point of view.
And so, faced with this, with two groups at loggerheads but one seeking to explain their viewpoint and the other shouting abuse (the former of which has all the money and influence), how do you think Arlene McCarthy and the Committee decided? 19 votes to 9, with 1 abstention.
The fact remains that several strong arguments against patent extension were either not put forward or forgotten about in the rush for righteous indignation.
If, for example, it was explained to Arlene McCarthy that changing the rules will create more problems than it would solve; that 13,000 existing patents will effectively be wiped out, irritating European businesses; that innovation and business will be stifled by expensive legal fights; that the very existence of the open source movement points to the fact that software is a special case where collaboration is more effective that protection; that European businesses will be worse off as a result because US companies hold the majority of the patents and the patent know-how... well, then we might just have seen a different result. ®
Related links
UK Patent Office conference on software patents
Foundation for a Free Information Infrastructure (extensive coverage and links to source material)
Richard Stallman speech on patents
European Parliament Committee on Legal Affairs and the Internal Market (JURI) homepage
Arlene McCarthy report (pdf)
Sounds like the definition of most conservatives.
It's a right to own property that socialists and communists generally have trouble coming to terms with.
IMO, That's BS.
Mechanical Engineering and the innovations in that field are built upon the Wheel, the inclined plane, and the lever,and work based on the long-dead Archimedes.
Electrical Engineering and its innovations are built upon basics such as resistance, conductivity, etc..etc, and Georg Simon Ohm has been dead a while. Chemistry is built upon, among other things, the Periodic Table, and Dmitri Mendeleev died a long time ago..
Of COURSE modern inventions are built, like a sedimentary deposit, on work that has gone on before.
And it is STLL possible to routinely create new, useful, novel, and non-obvious matter, every day! That's why there are 6,000,000 US Patents. I can easily remember when there were 4 million-It was not that long ago.
People decry the number of patents, and how "There is nothing left to invent"; Sorry, but that is stupid. The more technology there is, the easier it is to take Art from one area and use it in novel, nonobvious ways to applications in other fields or Arts.
Since February, 2002, I have filed 16 patent applications or provisional applications where I work, and from what I have seen in my career, it has never been easier to arrive at good ideas when the ground is so fertile.
(Or maybe I have just gotten old, and seen it all..haha.)
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What did that cost you?
When everything becomes subject to lawsuits only the big folk can survive because they will use the courts to bankrupt opponents even when they have the law on their side.
But imagine if the wheel, the inclined plane and the lever were patented.
That's what they're trying to do with software patents.
What did that cost you?
The Company has a high Product Development budget and is aggressive about IP. I am glad I found them. Each patent, with filing, issue and maintainance fees, plus the lawyers' time, will cost about $15-18,000.
Each Provisional will costs $600-800. Most will be folded into formal patents already filed as continuations.
Enough so my lawyer just took me to lunch in his new Jaguar.
Some companies consider IP to be a capital asset; They recognize that IP is the revenues for five years from now. This bucks the usual trend of making the current quarter look good at the expense of the future.
I am proud to be an inventor, because we create real jobs, and sometimes, even industries. Too bad the lawyers get so much, but they buy things, too, and spread it around.
I have read about some of the ludicrous actions initiated by people hoping to win a lottery. It will cost a lot, because the courts operate on the "Presumption of Validity" with an issued patent. That is unfortunate, but with the "One-click-purchase" patent, it was a good idea, and is probably valid, because the argument will go; "If it were obvious, why didn't anyone do it before this?".
Frivolous actions, like "Patenting the Internet" will have to be swatted down, though. Many great ideas are simple, especially in retrospect.
I think the arguments over patenting software are a bit overblown, because my brother and I used to have pprogramming contests. When the programs were listed, they operated on completely different assumptions and were never alike. He would use dimensioned arrays, I would use data statements, etc..because there are so many ways of accomplishing a task- from the screen, their operation was indistinguishable.
We have seen a lot of people lifting code and assembling it into larger programs. This is dishonest, and it is stealing. It has always been the position of the patent laws that "Mere improvement is not invention".
Well, I am going to be honest here. Years ago I worked for a Fortune 500. The policy was that an inventor got a $180 bonus when a patent was applied for, and another $180 when the patent issued. So, off the top of my head, I can remember one patent that was issued in 1989 that has generated revenues of $600,000 per year ever since (A competitor pays the company NOT to make the product!!!). Now, at first, that looks scandalous; I got a $360 bonus for a patent that has made $9MM.
However, the real "bonus" is this: That every time a division closed, I was the one who turned off the lights and went to another. Nobody kills a goose that lays golden eggs. And there were Founders' Stock Options in all the resulting spinouts that were a good deal back then! Further, patents mean that one has accomplished something. When I finally got the axe as the business contracted, I literally walked two driveways down the street and started a new job, and pocketed 9 month's severance. So people DO know how to pay inventors, in the long run.
And the real fact of the way it is in Industry is this: The company took care of my food, shelter, clothing, insurance, and 401(k)..In short, they were the pimp, and I was doing the tricks...and I can honestly say that it is not a bad way to live, at all. I get paid, not too badly, but never enough, of course, for what I love to do.
"Intellectual property" laws are a thinly disguised mechanism for lawyers to own everything.
Period.
Please thank us. Without those inventions and innovation there would be only a few jets, rockets, and the Jaguar you drive would still be -- well --- a Jaguar. But one from the early-seventies in terms of reliability.
Inventors like yourself -- you count your "inventions" -- inventors like the people I joind up with, and like I do myself in the right company -- our innovations and inventions are countless.
I can not expcet you to see, to appreciate how MUCH, the rampant creation of patents and patent-like copyright has hobbled real innovation.. I don't think you've ever come close to seeing it.
I am not against patent, nor copyright. I am a great fan of trade secret and trade mark. It used to be that patents required "non-obvious" innovation and a working model, and ideas, concepts algorithms and formulae could not be patented. It use to be that patents had a reasonable lifetime -- short, seven years, fourteen years. Today patents are nothing BUT legal extortion devices.
I hope you enjoyed that lunch, with your wonderful fellow innovator -- the man who probably owns more of your patents than you do -- your company's "IP" lawyer.
I see in this later post you address the issues pretty straight on. That in your own suggestion, the lawyers and financiars who own your company pimp for you and a stable of other "inventors". As analogies go, it is a negative one, yet accurate, but far from edifying at all as to the great hobbling and paupering that overuse of IP causes.
You say "they don't kill the goose that lays the golden egg". Well, sure they do -- the other geese in town -- they'll slaughter them all, fair and foul means according to boldness.
I have seen a real innovative company shuttered when one American IP collossus bought it out merely to shut it down. Not only were the inventors enginers and scientists out of work, their trade secrets locked up by contract (fine, that -- usually people are smart enough not to agree to lifetime bans on using the secrets) -- but the portfolio of patents was locked up. They made diamonds, but GE was much bigger and didn't want competition.
So yes, the natural competitive forces the IP owner to massacre ever other golden egg laying goose in town. And I agree -- competition fires the spirit and makes a man jump up and show what he can do -- competition can be good, it is good when balanced. When grants of patents are kept to a fixed and limited duration, that is a wondrously effective means of balancing the ill effects of competition.
In software -- any patent running over seven years is suspect in that regard. In pharmaceutical drugs -- a drug formula patent should run 30+ years, I'd say, for the excessive "proof of safety and effacy" tests required.
The first compnay I worked for, that had the policy against patents, and was extremely innovative and inventive -- it started after WWII by two engineers who had developed electronic equipemnt for the US Navy. They charted a public company and went door to door in the neighborhood selling shars in it. People bought a hundred shares or so -- ten years later they were adding pools or buying cadillacs.
Today, in addition to "IP" hobbling inovation and invention, the SEC does as well. Those earnest young men at the time could never go door to door today. Instead, today, there are layers of myriads of middlemen, "venture capitalists" and regulators each pursuing his "cut" of the action.
There are few stronger dynamics -- poison dynamics -- than greed run amuck, the big fish eating the small. Ideally the purpose of government and a justice system is to balance and check these deadly poisons.
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