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Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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An Entrepreneur Weighs In

One of the most interesting things about patents is that many entrepreneurs I have talked to are unenthusiastic about them. You can make money by creating a product, building a business and developing customers. Or you can spend your time in court trying to grab money from someone else. Successful entrepreneurs tend to do the former. Richard Corsale is an entrepreneur, and writes to us his views about patents. His career titles include: software developer, project manager, CIO, CTO and CEO and Sandwich Artist. He is currently launching an Open Source software company with a value added business model. The concept centers around IP that is placed in the public domain (tofui.com). He is considering producing a mini-documentary about the launch of tofui and other companies that are embracing alternative business models.

Richard says: I have been an entrepreneur for as long as I can remember. I generally believe that whats good for the ecoystem of an industry is good for everyone in that industry. I view a robust public domain as crucial for intellectual advancement and cultural identity. Politically I suppose I lean left on social issues and center/right on fiscal policy.

He submits the following remarks about software patents:

Five Reasons the US Supreme Court should explicitly deny patent protection to software.

1. Software is simply a solution to a problem. Patenting the solution is pointless since it is protected under copyright. So what we end up with are patents that cover a conceived problem. Of course the problem does not exist until it is conceived, and thus it is abstract. Abstract ideas are not patentable subject matter and neither are algorithmic solutions. Software patents have nothing to do with software, rather with the purely imaginary problems that they solve. What we are left with is technical process or method patents. I will refer to these as Software patents throughout this document since that is what they were originally billed as. Applying exclusivity to a process (regardless of whether it involves a computer or not) is tantamount to oppressing creative freedoms.

2. The arguments in favor of software patents are based on a series of assumptions regarding innovation that do not translate to modern, digitally creative arts. Innovation in technology companies that are effected by such patents obviously do not require industrial infrastructure to acquire market share. Their goods and services are essentially inexhaustible. Patent protection was intended (in spirit) to grant a "head start" to inventors so that they might establish market presence on their own inventions, before having to compete with established companies with an existing industrial infrastructure; thus ensuring the incentives of upward mobility. The alternative was thought to be losing domestic markets to foreign sources. If this reminds you of the horse and buggy then you see where I am going with this. Today's technology juggernauts started in garages without patent protection and most are less than a decade old. Patents have in fact, hindered innovation through rent-seeking. For example: MySpace and Facebook both developed without the protection of patents. Both are constantly assaulted with multiple concept patents from companies that innovated nothing. Essentially the industry has enormous incentive to innovate without patents. The situation is analogous to an arms race and oneupmanship is the rule. Software protections are absolutely unnecessary.

3. The people filing amicus briefs on concering software patents are primarily people and organizations that benefit from monopolies on ideas. The reason that Microsoft, IBM and other patent laden Goliaths expect to benefit from patent protection on software is obvious. However Bill Gates famously said: "If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today....The solution to this is patent exchanges with large companies and patenting as much as we can." Others that argue reap the benefit of software patents through "donations," licenses or litigation fees. If you want to know how innovation is really effected, ask software engineers and startups what they think. With assured anonymity they would provide honest unbiased feedback without fear of legal retaliation. They usually side with common sense rather than special interests.

4. The length of time that software patents remain valid render them oppressive. By granting a twenty year monopoly to companies in an ecosystem where consolidation is the rule, you are ensuring that the top 1% of tech companies will hold the vast majority of the IP in the industry. This means that the state reinforces corporate monopolies with state granted monopolies furthering their power to crush opposition. How does that foster innovation? I do not think this point needs to be expounded upon. It is just common sense. The U.S. Constitution never envisioned a scenario where someone could simply imagine the future and stake a claim on it without action or liability of failure. Then as happens now upon either success or failure (through acquisition or bankruptcy or liquidation) the inventor's intellectual assets wind up in the hands of the very companies that they were intended to protect against.

5. One point that makes most proponents of software patents cringe is the international enforcement of software patents. It is impossible, impractical and unethical to deny countries access to concepts that are standards of modern computing. The patents that are filed in the US are generally considered to be ludicrous and overly obvious by the international patent community. There will be no global consensus on software patents anytime soon if ever. Quality standards in nations that have allowed software patents vary greatly and are difficult to enforce even within the EU. At the end of the day it comes down to this: one person or company on the planet Earth owns the exclusive rights to a concept. They then attempt to divert revenue from companies around the world into their coffers. This is obviously not going to benefit countries that are charged with enforcement. Developing countries with little IP have no incentive whatsoever to render verdicts favorable to foreign companies that lay claim to broad concepts. International enforcement of idea patents is pure fantasy. What we are really left with is a massive disadvantage for tech companies in the US. If you want to see this in practice print out ten random technical process patents. Now imagine that you are presiding over an infringement hearing on these patents one at a time. Most would be eliminated in US courts, but presume that you are in a country with no laws to cover patentable concepts (most expressly prohibit idea patents) and see how many you find in favor of.

In closing I would like to point out that if you affirm software/technical processes as patentable a firestorm of litigation will ensue, resulting in a massive and unjust transfer of resources. The resulting effect on innovation in the US would lead to the inevitable question: Why would we expose our company to the risk of crushing litigation in the United States when our markets are just as accessible through the Internet?


Comments

Excellent points all around! I really home these points all made it into the amicus curiae briefs filed by some of the opinions to uphold (or expand) the lower court ruling in re Bilski. I know the FSF made similar points to 1 and 3. Points 2 through 5 should be taken to Congress as well, when they discuss patent "reform."

I've been in the software game in some form for over 15 years now, and studying US patent law as a [mechanical hardware] inventor and interested observer for nearly as long. I use a pseudonym online for fear of employer backlash on this, but I have always held that software patents are a ridiculous notion, indistinguishable from patenting Boolean Algebra equations. If you look even deeper into the current Computer Engineering field, even patenting transistor logic hardware is ridiculous, as all CPU's new and old are just different compositions of the same invention: the transistor. Logic gate design hasn't changed significantly since the 40's -- they are just smaller and more tightly packed, thanks to new forms of transistors and printing methods. Even the current processor manufacturing process is parallel to the process of graphic art (copyright not patent material) reprints: lithography. Patenting CPU designs is akin to patenting graphic reprints of decision flow charts. In both software and computer processors, the end-products are all useless without human interpretation.

The State Street decisions were a travesty of justice, even setting aside the horrible policy precedent. I see similar decisions as a by-product of horrible pro-corporate activist judgments, made by the slanted courts in the last 3 decades. That is why I fear the Bilski ruling may become a horror. Sotomayor is very conservative and pro-corporate in her past decisions, despite the Republicans' false claims of her liberalism, so the court is now slanted more pro-corporate than ever -- small businesses and individual humans be damned. I also fear SCOTUS may reaffirm the "personhood" status of corporations this session, in campaign finance reform related decisions, which will drive this country even further into the ground of corporatist rule. Monopolists will be the kingmakers, without any real public restraint. If that happens, this experiment in Democracy will be over, and the cycle towards Oligarchy will be complete.

@Fred

I typically try to avoid gloom and doom, but in this case I think you might right. Lobbies run this country, thats been apparent for some time now. The candor with which they flaunt their power on the other hand is new.

This experiment in Democracy officially ended when the people told congress (overwhelmingly) that we did not want them to bailout the banks... and they did it anyway... Thats not a Democracy...

I believe Richard Corsale is in error with respect to one of his comments:

The people filing amicus briefs on concering software patents are primarily people and organizations that benefit from monopolies on ideas.

Many of the amicus briefs are against software patents, including many of those by "people and organizations" that have benefited from the bargain patents create with inventors. Considering discussion in a variety of forums, including the amicus briefs, most "people and organizations" are against purely software patents.

@Anonymous

I actually modified the wording in a revision that was exclusive to filings by proponents of software patents. I was trying to say that of companies like IBM, MS etc.. are bilking billions of dollars out of smaller companies and its easy for them to manipulate the system. Not very many small players who actually innovate in the technical industry want idea patents. That was the point I was trying to make, The wording was erroneous I realized that too late. :)

Thanks for the heads up --Richard

Richard:

Here are some interesting things from the amicus briefs:

Microsoft, Philips, and Symantec support the Bilski ruling; i.e., the Bilski claims should not have been allowed, and neither should pure software patents.

American Medical Association support the Bilski ruling and against software patents.

It appears that most briefs are in support of the Bilski ruling, and only a few believe it should be overturned.

Stay tuned.

I wonder where do the "anti-sw-patent but pro-ip" people imagine a difference between software patents and any other patents or copyrights. Once a person is sane, educated and brainwashing-resistant enough to oppose SW patents, why don't they oppose the rest of "IP" too?
Samuel, s/w patents are monopolies applied such that people can see how ridiculous and unproductive patents are. Instead of realising that patents are ridiculous per se, such people simply assume that patents have to be tweaked somehow so that they don't become ridiculous in the limiting case as with s/w, and the simplest tweak is simply to say that s/w shouldn't be patentable.

It would be far better if people thought about things a tad, and recognised that the only natural right and power any individual has to prevent someone else copying their invention is their right to privacy, i.e. to lock their workshop door. No-one has even been able to sell someone a basket and physically prevent the purchaser from copying the peculiar way in which it has been woven. They can of course simply forbid, but then such forbidding obviously remains impotent without expensive policing by one's cronies (or the king's men if one is in his favour).

So, without thinking that wee bit further, people remain comfortable with the idea that it is good for society to prevent imitation by competitors, that every merchant deserves a niche to themselves. This is of course completely unnatural, and must have been a romantic notion inculcated early in childhood.

Everyone who discovers (or as is usually the case, rediscovers) a novel/unfamiliar way of doing something deserves to be able to prevent anyone else utilising the same method (even if they also discovered it).

It's probably something to do with the obsession to know which SINGLE person invented X, and the national obsession to bias any contention in favour of one's own countrymen. But, the idea that several people could have invented/discovered something, or that it would have been discovered sooner or later by any reasonably competent practitioner/researcher/engineer, is bordering upon heresy.

1) There is always a single inventor, a rare genius that society is duty bound to reward with the suspension of its citizens' liberty. 2) Any impostors or unauthorised imitators are scoundrels who deserve to be heavily penalised.

How do we find the genius? Create a registry and the genius will be the first to file.

How do we reward them? Prevent anyone else using their invention for a goodly market lifetime of any product, say 25 years.

And this line of thinking is entirely a result of an education that teaches us that mankind's progress is entirely dependent upon a few rare individuals, who deserve nothing less than the market to themselves.

For such a line of thinking we'd have no steam without Watt, no light without Edison, and no radio without Marconi. With such genius being found in perhaps only one individual among billions each century, it must be frightening to imagine what life might have been like without any of them.

That there must always be a first does not imply that the first is particularly remarkable, though it makes history more fun to think otherwise.

The same fallacy leads people to conclude that without the grant of patents to prevent competition inventors would not invent. Just as the cockerel believes their crowing encourages the sun to rise and that if they don't crow, it won't rise - or may not rise so brightly.

It's all superstition, something that mankind excels at. The problem is, the superstitious majority greatly outnumber those who take pains to avoid logical fallacies.


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