

Software Patents as Innovation Tax, Rather Than Catalyst for Innovation - powertower
http://thenoisychannel.com/2011/03/07/a-practical-rant-about-software-patents/

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grellas
For anyone interested, I expounded at some length a while back about why
method patents are well-entrenched in U.S. law and about the philosophical
debate surrounding them over the years (see
<http://news.ycombinator.com/item?id=1171821>). Software patents, of course,
fit within that mold and, in light of _Bilski_ , will not be subject to any
form of categorical challenge for years to come in the courts. The issue lies
with Congress, and this piece sets forth an excellent way of making the right
kind of policy challenge (in contrast to the more superficial "this is
ridiculous" kind of point which, though sometimes true, the patent bar is
usually quite good at rebutting, at least based on existing legal standards -
see, e.g., <http://hallingblog.com/2010/05/26/patent-ignorance/>).

In the analog era of patents, the U.S. courts went nearly two centuries in
which the idea of a patent was strongly tied to that of a "machine" and where
they often held that, while an original invention was in itself patentable, an
improvement upon that invention was not. For example, in 1875, the Supreme
Court held that "it is no new invention to use an old machine for a new
purpose" (I cite and discuss this in the linked item above). It was not until
1952 that Congress overruled this line of cases in amending the patent
statutes, setting the stage for what became an eventual flood of software
patents as the digital age began.

The policy issue making software patents problematic in our digital age is
that patentable software innovations, though supportable under current legal
standards, basically are creating an ever-complex web of closely-interrelated
and incremental improvements in any given area (e.g., mobile devices) such
that no one can develop anything there without getting entangled in the web.
It is not just tricky. It is impossible. The only way to defend is to make
your own web (your "defensive patent portfolio" or your "defensive pool") and
use that to catch others before or as they catch you. If you don't have that,
you are in trouble.

Is _this_ , then, what was intended by the Progress Clause of the Constitution
(Article I, sec. 8, cl. 8) when it provided that the Congress shall have the
power "to promote the Progress of Science and useful Arts, by securing for
limited Times to Authors and Inventors the exclusive Right to their respective
Writings and Discoveries"? Just how do these tangled webs of 1-and-0 based
incremental improvements that are a normal part of all software development in
the first place manage to promote the progress of science and useful arts?

The cause for reform in this area will be won or lost based on how the issues
are framed and here we have a good example of how to begin to mount an
effective challenge.

~~~
JoshTriplett
> here we have a good example of how to begin to mount an effective challenge.

If you want to successfully make something sound like a problem to a
government, don't describe it as a "tax" and expect them to think of that as
bad.

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Eliezer
The amazing thing to me is the extent to which companies can't solve
elementary coordination problems, and so stay in a Hobbesian state where
entities just randomly attack other entities with patent-clubs and there's
nothing resembling law or police entities. Step one would be banding together,
not just with a centralized defensive patent portfolio, but with a centralized
legal defense fund. As for the NPEs, patent the business method of patent
trolling (I think somebody already did this, so just keep applying until you
get another patent for the same thing), then sue them for violating it. After
they're convicted by the central court of patent trolling, of course.

Astounding how the insight of law and centralized police, in just a slightly
different domain, is so counterintuitive that companies still farm the lands
as individuals, prey to whatever bandits stalk their way.

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ScottBurson
John Walker's PATO (described in the post) seems like it might be a good idea.

Here, just to brainstorm a little, is another idea I was kicking around the
other day. I'll call it the Rational Software Patent Alliance. The basic idea
is that any patent dispute between two RSPA members is settled by binding
arbitration performed by the RSPA. Unlike the current system which foists
technical decisions of obviousness and infringement on judges and juries who
are not competent to make these decisions, the RSPA arbitration team consists
entirely of experienced (and very well paid) developers and computer
scientists. The arb team will form its own opinion of the validity of a
patent, very much including its judgment of the obviousness of same; and
everyone should know that only a minority, possibly a small minority, of
software patents issued by the PTO are likely to pass the much higher bar of
the RSPA.

Of course, there's some risk that a patent holder, unhappy with their patent
being considered invalid by the RSPA, would quit the organization so they
could sue another RSPA member in the courts. To deter this behavior, we say
that an entity can join the RSPA only once; you can't get back in after
leaving, and what's more, if someone acquires you after you leave, _they_
can't join the RSPA either, and if they're already a member, they're kicked
out.

The incentive to join RSPA is simple: it removes some fraction of the risk of
being sued -- said fraction being a function of how many other companies join
-- and it wouldn't be expensive unless you actually avail yourself of the
arbitration process, and even that would be far cheaper than litigation.

I think this idea is actually complementary to PATO, as it's an idea about how
members should resolve disputes among themselves, where PATO is more about how
members should help one another in disputes with nonmembers. Walker suggests
that PATO members should never be able to assert patent rights against other
members, but I think that's going to be a harder sell than what I'm proposing,
where companies do have some chance of protecting their real innovations from
other members. I think there has to be some chance of that if we're going to
get the big players -- Microsoft, IBM, Oracle, etc. -- to join.

So I think there should be one entity -- and "PATO" is definitely a better
name than "RSPA" :-) -- that has both of these functions, to help defend
members against nonmembers, and to arbitrate disputes between members.

Alas, neither of these functions does a good job of addressing the NPE
problem, as NPEs would obviously never join such an alliance, and they aren't
vulnerable to countersuits precisely because they're non-practicing. I think
if anyone is going to fix the NPE problem, it's going to have to be Congress.

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eggnet
Patent insurance is the knee jerk reaction to patents, and more or less
impractical.

However, the patent pool concept this article discusses sounds like a way to
more or less provide patent insurance, which would be an amazing thing if it
reached critical mass.

~~~
bugsy
Really sounds to me like a consortium that would end up using its collective
power to destroy non-members. Would be easy enough at some point to make sure
only large corporations can afford to be members, and go after innovative
small companies with their shared portfolio.

Legal reform makes a lot more sense to me and is less fraught with potential
with abuse.

~~~
eggnet
The nightmare scenario you describe is already the current situation. There is
already a "boy's club," you automatically become a member when you have
acquired enough patents. The consortium is simply a way to lower the barrier
to entry to be "one of the boys."

The problem with legal reform is that it won't happen, not that it isn't the
right thing to do.

The consortium as an intermediate step would be a good way to slow roll
reform. Once a critical mass of companies is part of the consortium,
intellectual property value would start decreasing, due to the decreased
offensive effectiveness, and legal reform would become more feasible.

~~~
dtunkelang
Exactly. I prefer legal reform too, but something is better than nothing.

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sabat
However you interpret the current situation, the patent and copyright clause
is certainly not operating as intended by its authors.

