IP In The News Lately

At the beginning of the month I was writing about the idea of IP being the foundation for collaboration. Any reading about IP that I have done in the past points out the need to have all parts of the IP system in place for any one of them to work. Strong laws, a process and infrastructure to grant the protections, and an effective (and active) enforcement mechanism. Thus, my discussion of the idea that with these elements in place, all actors may see the rules of the road and thus be willing to collaborate within the confines of that system. I really appreciated the comments that come into my blog, and am doing the reading suggested by folks. While I still think this is a powerful angle to consider, the news of late has been all about enforcement actions. 

IBM is pushing software and process patent enforcement against Amazon, and they are embroiled in a few other high-profile IP cases as well. This past week, Microsoft has been in the news on two big cases. The first with Alcatel-Lucent, and the second with ATT.  The first seeing the largest patent-related award in the history of the U.S. legal system and the second being heard in the Supreme Court. I'm not a lawyer, but it would seem to me that IP matters, and carries real implications for commercial participants. It would seem that everyone producing software for commercial use needs to recognize that IP is a real part of the landscape no matter what your opinion of the laws may be.

For years, Microsoft has been talking about the importance of IP. We went to the unprecedented step of providing our customers and partners with uncapped indemnification for IP infringement (still not matched by any other vendor, and here is the policy statement if you are curious). This is not something done lightly, nor is it without value. Microsoft stepped in and indemnified Dell and Gateway in the Alcatel-Lucent case and at the moment that carries a $1.5B price tag. (To be appealed for sure...) The whole point of the indemnification issue is to highlight how seriously we take the responsibility for standing behind our products. We pay more than 10x the amount outbound than we receive inbound on an annual basis in IP licensing fees to clear our products for commercial sale. And that is to say nothing for the approximately $7B we are putting into R&D on an annual basis.

At the end of the day, there are many in the software community who are directly opposed to software patents. There are software businesses employing strategies to use patents for proactive and reactive protections. There are those who see patents as a means for collaboration as well as transparency. Certainly, patents represent a challenge in the global community as people wrestle with the implications of providing products in multiple countries.

I certainly believe that patents provide incentive for innovation. I also believe that patents provide a foundation for organizations to collaborate. The research out there about this is a mixed bag with opinions on all sides, but one study I found interesting is the recent study by U.C. Berkeley Professor of Law and Technology Robert Merges. He found that even after 10-plus years of software patenting 1) the software industry remains far less concentrated than the average American industry; 2) the number of small software startups entering the industry is even greater than the number of new entrants a decade ago; and 3) the software industry continues to grow so rapidly and robustly that it now represents over 10% of all U.S. R&D, compared to only 1% of R&D in the days before software patenting first emerged.

These factors suggest that innovation is on the rise. It also suggests that in a world of increased transparency these innovators are not going to be able to depend on copyright or trade secret. Inventors have an increased incentive to depend on patent as a core pillar to protecting the uniqueness of their solutions. Simultaneously though, they are going to be finding new and inventive ways to share that very IP with others in order to create business opportunities. 

Comments (4)
  1. Wesley Parish says:

    Umm, in relation to U.C. Berkeley Professor of Law and Technology Robert Merges’ study, has he perchance read Rob Pike’s "Systems Software Research is Irrelevant" essay?  At: http://herpolhode.com/rob/utah2000.pdf

    And furthermore, a recent patent application by Microsoft was hurriedly withdrawn because it trod on the feet of the BlueJ team.  Are all software patents that bad?  If so, if the average quality of software patents is that abyssmally bad, the number of patent applications says a lot more about the software industry’s desperation than its grasp of its subject matter.

    Furthermore, patents are a trade-off between government, private enterprise and between the competitors in provate enterprise, to divulge an advance in the art or a totally new and unexpected development that creates new and unexpected opportunities.  From what I’ve read on patenting machinery etc, a mandatory and full disclosure of the blueprints is required.  I’ve not seen any of that in any of the patents that get regularly slammed on the likes of slashdot.  Source code is the software equivalent of blueprints – so I’m thinking that software patents are fraudulent.

    As far as mandatory disclosure goes, I think the GPL is probably the closest the legal machinery has come up with, to a workable analog.  I even asked that of Bill Gates via his askbill@microsoft.com email address, but he has never got around to replying, which is a bit slack.  Where’s his "customer focus"? 😉

  2. jasonmatusow says:

    Wesley – the BlueJ thing was a mistake. I went public with that, it was widely written up and we have since taken the action in patent application equivalence of a complete withdrawal. That was simply a case of miscommunication between the engineering team and legal folks. We are great believers in improved patent quality. Our patent quality ratings are extremely high by third parties. We are subject to a constant stream of frivolous lawsuits due to overly-broad patenting and have advocated for changes to the patent system as a result.

    Software patents reward innovation and I think that is fundamentally important. Moreover, in a world where trade secret and copyright become less and less effective, rights holders will have to land on patent for protection of IP assets.

    I agree that we need to rethink the patent system, and global patent harmonization. I agree that we should always be looking at innovation, business models, societal good, and legal frameworks to strive for an optimal mix. But I am a big advocate for IP and what it has done for the software industry.


  3. Wesley Parish says:

    Jason, FWLIW, I suspect the usual analogy for copyrights in relation to computer programs is flawed – that is, the book-sized copyright.

    FWIW, I recently did a course at the local polytech on scriptwriting and performance – writing and workshopping plays.  I even took part in the performance of one play written by the teacher, where I was part of the sound background – mournful wind whistling through the hillsides on the NZ South Island West Coast during the gold-rush days.

    What I took from that was there is no "end product" for playwrights.  A play is complete only when you’ve finished with it for the season, and can’t be bothered with reworking it for the next set of actors who want to put a season of hard work into making it real for some future audience.  I got an old copy of the script out of being part of that play – under copyright, of course.  I have no intention of using it as anything except a reminder of some hectic – and enjoyable – days.

    What is the difference between a play’s copyright "schema" and a book’s copyright "schema"?  "The Oxford Shakespeare: The Complete Works: Second Edition" has  some very helpful words on that topic, in its Introduction: "We have ample testimony from the theatre at all periods, including our own, that play scripts undergo a process of, often, considerable modification on their way from the writing table to the stage.Occasionally, dramatists may resent this process; […] In some cases, this [current editorial policy] requires the omission from the body of the text of lines that Shakespeare certainly wrote; there is, of course, no suggestion that these lines are unworthy of their author; merely that, in some if not all performances, he and his company found that the play’s overall structure and pace were better without them. […] General Introduction, pg xxxix.

    I was taught that programming is a never-ending process of altering the programs previously written and fixing things up that had got broken, etc, ad infinitum.  I.e., program maintenance.  I also know that with books, the idea is usually – at least with the ones I know of – to get a final copy for the initial printing, and then occasionally to revise that final copy to correct mistakes, omissions, errors, etc.  But performance – as play or liturgy, for example – adds a whole set of different issues as well.  And they get reflected in the form copyright takes around the play – the author retains copyright.  He may permit people to perform his play without further reference to himself – Shakespeare’s plays are in this category, as are his contemporaries’, but that is only because the likes of the RIAA and the MPAA have yet to convincingly contact the dead playwrights and persuade them of the necessity of playing along with their schemes – or he may require that all people wishing to put his plays on, contact him or his agent/s …

    I can’t think of a better analog for software than the performance aspect of copyrights for plays.

    That is probably where this current software copyright schema falls down so badly – it appears to be modelled exclusively on the book copyright "schema", whereas the essence of the software business appears to be in maintenance and support, which doesn’t close the door on continual alteration and rewrites.  Only a madman would continually write a book.  Little wonder you say ‘in a world where trade secret and copyright become less and less effective" – because it is ineffective – it’s got the wrong correlates.

    But the correct response to that is not to adopt an IPR method that doesn’t apply full-stop, because the points I made about malleability etc, of the IPR "problem domain", are real.  The problem is to get more accurate correlates.

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