Against Monopoly

defending the right to innovate

Software Patents

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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Doubts about a patent

JAY VADIVELOO, who is a mathematics professor and also works as an actuary for an insurance company, writes in the New York Times about how he got a patent and makes it sound easy link here

He describes his invention: "Generally when an insurer performs certain calculations, it includes data from all its policies. If it has a million policies, that means a lot of processing as various scenarios are considered. Sometimes, the work can take days. I believed I had a solution to this cumbersome and costly process: create subgroups from the database, sample policies from each, repeat the process several times, then combine the results. My technique provides results similar to those from studying all policies, and saves time and money."

He doesn't note this but his procedure allows him to calculate not only the probable result but also a level of confidence in that result i.e., that this result will occur with a predetermined desired level of probability. He goes on to recount the actual process of getting the patent, but fails to note that there is nothing particularly original about his statistical process; it is a perfectly ordinary statistical sampling, designed to achieve a certain level of accuracy at minimal cost, based on a tested assumption about the distribution of the sampled population.

I wonder how long it will be before someone challenges his patent as neither unique nor original.

The Cost of Patent Trolls

The blogosphere is rightfully abuzz over the recent paper by Bessen, Meurer and Ford. They are extremely careful researchers. They focus on litigation over software patents and measure losses to the victims of patent lawsuits and gains to the trolls who bring them by looking at changes in stock market valuations. They find the net loss to the economy from these lawsuits running at about $80 billion per year. They conclude

that the loss of billions of dollars of wealth associated with these lawsuits harms society. While the lawsuits increase incentives to acquire vague, over-reaching patents, they decrease incentives for real innovation overall

Patents: your government discouraging innovation.

Federal Appeals Court Finally Offers Some Push Back Against Some Broadly Worded Software Patents

In an important decision, the Court of Appeals for the Federal Circuit has rendered many broadly written software patents invalid under 35 U.S.C. § 101 as interpreted by the Supreme Court's recent Bilski v. Kappos decision from last year.

The new case is called CyberSource Corp. v. Retail Decisions, Inc.

The Patently-O blog has a useful summary and analysis of the decision here:


The PDF version of the decision itself is here:


The feds question the legality of the Nortel patent bidding

As reported previously on the sale of Nortel patents link here, six of Google's rivals most importantly, Apple, Microsoft and Research in Motion worked together to make a combined bid and won Antitrust officials probing sale of patents to Google's rivals"> link here. Now, "Federal antitrust enforcers are scrutinizing whether Google, often accused of abusing its Web search power, is facing an unfair coalition of companies that could block its popular Android mobile phone software, according to a source close to the matter."

Unusual for it, the Washington Post's report goes on to raise questions about the wisdom and legality of the increasingly dysfunctional patent system "where even the most amorphous ideas can be rubber-stamped by the government and protected for years."

It goes on, "...companies are increasingly arming themselves with ever-growing patent portfolios to initiate or shield themselves from costly lawsuits.'

"The result, ...companies with formidable patent portfolios can use them as cudgels against rivals, while those with fewer patents risk being eaten alive in court."

"For years tech companies did not go after one another in patent lawsuits. But that has changed recently as the battle to dominate the mobile phone space has grown fiercer. Google's Android operating system has rocketed to the top slot as the most popular in the world, just ahead of Apple's and RIM's BlackBerry."

"The battle to beat Android has already turned into a legal bonanza. Apple is suing HTC, Samsung and Motorola, all makers of phones with the Android platform. Oracle is seeking up to $6.1 billion in a patent lawsuit against Google, claiming Android infringes upon Oracle's Java patents. And Microsoft is suing Motorola over its Android line."

Stay tuned, but there is (some?) hope when the Post can actually be critical of this tragi-comedy in which the United States commits hara kiri by a thousand cuts, in the slow motion expansion of patent monopolies.

Patents are broken how do we fix them?

Kevin Drum says: So then, a question for people who think that software patents are out of control: what should the rule be? No patents at all on software or business processes? Probably not. But if patents aren't flatly banned on business processes, is there some kind of rule that would raise the bar in a reasonable way on just how novel something has to be to deserve a patent? I hear a lot of complaints about software and business process patents, and I'm sympathetic to them. But exactly what kind of reform would improve things?

"No patents at all on software or business processes? Probably not." Interesting that he doesn't explain why not. In the case of software patents the case for getting rid of them entirely is clear. The work of James Bessen leaves no scope for doubt.

With its patent, Apple can stick it to you with two fingers

APPLE has now received a patent for two fingered gestures on a touchscreen according to this link here and to a much more extensive set of claims by another interpretation link here. For the rest of us, it would appear there is loads of prior art that would preclude granting such a patent but the Patent Office seems unable to resist granting them and extending the monopoly farther and farther. But why should two finger gestures get patented while one finger ones don't?

The broader significance is that the big players in the industry can be challenged, as Google has done, but it looks as if that may be the last. The big guys have circled the wagons and will win unless the patent law gets changed. Chances?

Making patent law in D C

Edward Wyatt writes in the NYTimes about an example of a costly business-method patent link here. His story emphasizes that Senator Schumer is doing the banking industry's business, has got the bill passed in the Senate as part of the broader "reform" patent bill, and has sent it on to the House. It may or may not pass there, but given the banks' clout with Republicans, I expect the provision will be approved if the overall bill passes. Wyatt doesn't speculate on whether the President will sign, but he is out passing the hat for campaign funds among the banks.

The banks concern is the cost of their patent license, said to be hundreds of millions over the years. The patent is for a method to process digital copies of checks, which to me sounds like a software patent. The patent owner, DataTreasury Corporation from Plano TX, has won a series of suits challenging the validity of the patent at the Patent Office and won consistently in the courts. DataTreasury now has license agreements with "more than three dozen banks," so it would seem to be the industry standard.

Wyatt adds one more jab at DataTreasury which he reports once had more than 100 employees but is now a mere holding company with only a few employees, reportedly because the banks stole its patented technology.

Wyatt finally takes on the Patent Office which is said to have drafted the provision and would be the biggest winner from the current draft bill, as it would get to keep all the fees it charges, "removing it from the politics of the Congressional appropriations process."

Our concern as consumers should be that this is a highly questionable patent (like most business method patents) that adds to the costs of society as a whole without improving welfare. Watching how the legislative sausage is being made does not make it smell less or taste better.

There is no lack of outrageous patent trolls

The most glaring negative aspect of patents nowadays are patent trolls, and nowhere is this more obvious than with software patents. here is another one for your enjoyment, or not.

Ars Technica reports about a firm threatening to sue large corporations for the use of roll-over images on their website. What makes this one different is that instead of intimidating small players, it is going after big fish who have legal teams, and those are willing to fight back. Even stranger, the patent expired a few days ago. But I wonder how many still fell for it.

Microsoft gets patent for Windows shutdown

Via Conceivably Tech, we learn that Microsoft was granted a patent for the shutdown procedure in Windows. If I understand it right, Microsoft is now the sole owner of the procedure asking whether you really want to close an application with unsaved data.

Note that the patent does not seem to cover the most annoying aspect of a Windows shutdown, the never ending Windows updates. I have not used Windows on my dual-boot laptop for months for precisely that reason... I am waiting anxiously to see that patented as well.

Goofy software patents taken too seriously

Over at ZDNet, Ed Burnette discusses a blog post by James Gosling, who created Java while at Sun. He relates how Sun lost big on a court decision regarding a trivial IBM patent. Sun employees were soon after encouraged to flood the patent office with applications, and there seems to have been a competition on who gets the silliest patent.

Burnette conjectures that one of those goofy patents is in fact among those that Oracle, who recently acquired Sun, is suing Google over. Does this qualify as irony?

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