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Software patents – a protection racket?

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.