In new case, Supreme Court revisits the question of software patents(m.washingtonpost.com)
m.washingtonpost.com
In new case, Supreme Court revisits the question of software patents
http://m.washingtonpost.com/business/in-new-case-supreme-court-revisits-the-question-of-software-patents/2014/03/28/a3da1c52-ad3a-11e3-9627-c65021d6d572_story.html
6 comments
> When it is better to "own" old IP than to make new one, the system is strangling innovation, nothing else.
Nailed it with that one. That's exactly why companies like Microsoft and IBM [1] fight so hard to keep the current patent system, or even make it worse. They have so much more to gain by rent-seeking with their old bogus patents than by creating new ones (especially if the new ones would have to be put through much more rigorous filtering), since they're not really the innovators in the tech industry anymore.
[1] - http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/20...
Nailed it with that one. That's exactly why companies like Microsoft and IBM [1] fight so hard to keep the current patent system, or even make it worse. They have so much more to gain by rent-seeking with their old bogus patents than by creating new ones (especially if the new ones would have to be put through much more rigorous filtering), since they're not really the innovators in the tech industry anymore.
[1] - http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/20...
> This system is for the "owners" not for the "creators"!
Nor the consumers, who end up paying for this mess.
Nor the consumers, who end up paying for this mess.
If you count history as starting recently, then sure. However, the patents came AFTER the refining of an idea to concrete steps which came AFTER the funding to refine the idea which came AFTER the guy/gal with the idea finding funding to refine the idea.
One thing investors fear is investing in small unknown people where once the secret sauce is visible, it can be easily copied. In particular, copied by large corporations with customer channels, marketing muscle, deployed software installations with patch/upgrade cycles, etc... Investors often look at barriers to entry which patents happen to provide.
One thing investors fear is investing in small unknown people where once the secret sauce is visible, it can be easily copied. In particular, copied by large corporations with customer channels, marketing muscle, deployed software installations with patch/upgrade cycles, etc... Investors often look at barriers to entry which patents happen to provide.
The problem is only, that patents happen to protect the big companies more often than any small company.
There was once a company, it got visited by the lawyers of a big corporation.
They claimed that this company violated patent X of the corporation and they wanted Y millions for it. The smaller company proofed that they did not violate this specific patent.
The lawyers just said, that their corporation owned X thousands of patents and many, many lawyers worked for it. If they go empty today, they will search and find 10 patents that where violated by the smaller company.
Tell what, the smaller company paid.
It might be, that to own some patents is good and to ask for it is reasonable for investors. But with the view on the nationwide or world-wide economics, patents are essential bad.
I once also heard (I am not so good in this history, so sorry I can not give details), that the US economy and inventions had so a quick rise, one reason was because they at first abandoned the patent system of the UK and did not care about the patents in the "old world".
There was once a company, it got visited by the lawyers of a big corporation.
They claimed that this company violated patent X of the corporation and they wanted Y millions for it. The smaller company proofed that they did not violate this specific patent.
The lawyers just said, that their corporation owned X thousands of patents and many, many lawyers worked for it. If they go empty today, they will search and find 10 patents that where violated by the smaller company.
Tell what, the smaller company paid.
It might be, that to own some patents is good and to ask for it is reasonable for investors. But with the view on the nationwide or world-wide economics, patents are essential bad.
I once also heard (I am not so good in this history, so sorry I can not give details), that the US economy and inventions had so a quick rise, one reason was because they at first abandoned the patent system of the UK and did not care about the patents in the "old world".
That example is not an isolated incident and happens far too often. It has been part of the large corporations game plan for years now. They have found ways of using the patent system to attack small entities AND have used their deep pockets to drag out justice for the small entity.
Patent reform should focus on helping small and independent innovators, when in reality it is being driven by large deep-pocketed corporations.
Patent reform should focus on helping small and independent innovators, when in reality it is being driven by large deep-pocketed corporations.
>Patent reform should focus on helping small and independent innovators, when in reality it is being driven by large deep-pocketed corporations.
That is right. I am also wondering all the time about the focus of patent reforms: so called patent-trolls. But as annoying they might be, the whole case looks very much like a diversionary tactic to distract from the real problems of the system.
That is right. I am also wondering all the time about the focus of patent reforms: so called patent-trolls. But as annoying they might be, the whole case looks very much like a diversionary tactic to distract from the real problems of the system.
Not quite. Those so called patent trolls are the thorn in the side of the large corporations. Even after a small entity succeeds in obtaining a patent and has their innovation copied by a large corporation and opens a dialogue with the large corporation, he/she is shunned and told to get lost. One large corporation (Apple) is at least honest about it and tells the small entity we can't take you seriously until you initiate a patent infringement suit [1]. The reason is rather simple: it is their most cost effective way of weeding out those they do need to worry about from those they can ignore.
[1] http://www.ipwatchdog.com/2013/05/01/is-patent-litigation-re...
[1] http://www.ipwatchdog.com/2013/05/01/is-patent-litigation-re...
And it is also a convenient way to hold smaller companies with good ideas but smaller pockets at bay.
A pressing problem is the fact that a large slice of Americans believe that the owners are the creators.
I agree. But that believe is wrong.
The thing about "IP" is also, that differently from "ideas" or "inventions" -- "property" can be sold and bought. Also in the most cases, inventors are small people in big corporations that just get some small and fixed (at least in Germany this is the normal case) money for it. A bargain for the corporation that "owns" from now on the "ideas" and "inventions" of their employees.
Make a price tag on everything and you will get a world not worth living in!
The thing about "IP" is also, that differently from "ideas" or "inventions" -- "property" can be sold and bought. Also in the most cases, inventors are small people in big corporations that just get some small and fixed (at least in Germany this is the normal case) money for it. A bargain for the corporation that "owns" from now on the "ideas" and "inventions" of their employees.
Make a price tag on everything and you will get a world not worth living in!
Indeed. It reminds me of how Steve Jobs received credit for Jony Ive's designs[0]. Americans have been raised and convinced to believe that CEOs and business executives are the source of all creativity, and that their wealth is a logical result of that.
[0] http://www.businessinsider.com/steve-jobs-would-annoy-jony-i...
[0] http://www.businessinsider.com/steve-jobs-would-annoy-jony-i...
To be precise, the case isn't about software patents. Its about whether taking an unpatentable business method (per Bilski) and implementing it on a general purpose computer makes it patentable. The answer will likely be no, but that won't invalidate software patents. The appellant wants to make it seem that way, "if you deny our patent it will invalidate all software patents," but thats not the best characterization. What will happen instead is that the Supreme Court will distinguish software patents generally from the patent at issue in this case. What will be interesting, in my opinion, is how they draw the distinction.
The "abstract idea" line drawing is complicated from both sides, however. Say you develop a clever algorithm for doing transmission power control for a WiFi radio. If you implement it on an ASIC, that's almost certainly patentable. But what about an FPGA? Or a general purpose processor? If software patents are categorically invalid, you end up being able to patent things in ASICs that can't be patented if done on a GPP. If they are valid, that doesn't help when someone tries to patent something like a mechanism for hedging risk.
I think the real issue is looking at whether the algorithm embodied in a patent is a general concept, or a narrow domain specific design. In other words, you shouldn't be able to patent the concept of transmission power control. But you should be able to patent a specific method for doing transmission power control they arises out of capital intensive research.
The "abstract idea" line drawing is complicated from both sides, however. Say you develop a clever algorithm for doing transmission power control for a WiFi radio. If you implement it on an ASIC, that's almost certainly patentable. But what about an FPGA? Or a general purpose processor? If software patents are categorically invalid, you end up being able to patent things in ASICs that can't be patented if done on a GPP. If they are valid, that doesn't help when someone tries to patent something like a mechanism for hedging risk.
I think the real issue is looking at whether the algorithm embodied in a patent is a general concept, or a narrow domain specific design. In other words, you shouldn't be able to patent the concept of transmission power control. But you should be able to patent a specific method for doing transmission power control they arises out of capital intensive research.
> Its about whether taking an unpatentable business method (per Bilski) and implementing it on a general purpose computer makes it patentable.
TBH, I'm not terribly familiar with what can and can't be patented as per business methods. But technically all things that can be computed, can be computed by enough people doing the arithmetic. Computers just make this much faster.
So if I have 300 people...I dunno, collating wedding invitations, and come up with a way of doing it in software, that's not patentable?
However, a clever algorithm for computational imaging is arguable patentable, but anybody who knows matrix math can probably do it manually.
So is it really a discussion over the magnitude of the assist to humans doing the grinding computations by hand and where that line is drawn? Or to your example, some software running on a general purpose CPU can often be implemented as DSPs or some other specialized hardware, it's obviously no longer software I suppose once it's a DSP, even if the method for doing the computation is the same.
TBH, I'm not terribly familiar with what can and can't be patented as per business methods. But technically all things that can be computed, can be computed by enough people doing the arithmetic. Computers just make this much faster.
So if I have 300 people...I dunno, collating wedding invitations, and come up with a way of doing it in software, that's not patentable?
However, a clever algorithm for computational imaging is arguable patentable, but anybody who knows matrix math can probably do it manually.
So is it really a discussion over the magnitude of the assist to humans doing the grinding computations by hand and where that line is drawn? Or to your example, some software running on a general purpose CPU can often be implemented as DSPs or some other specialized hardware, it's obviously no longer software I suppose once it's a DSP, even if the method for doing the computation is the same.
I mean, your examples really capture the debate at issue in the case. Trying to draw lines based on whether the idea is implemented in software or hardware is just arbitrary.
The real question is: what sort of algorithms do we want people to be able to patent? This is an economic question, not a legal one. At what point does the benefit from disallowing free riding out weigh the cost of granting the temporary monopoly? The problem with the law is that it sidesteps this question. Its based on an 19th century notion of invention, whereas the real value of patents is protecting investment into R&D.
The real question is: what sort of algorithms do we want people to be able to patent? This is an economic question, not a legal one. At what point does the benefit from disallowing free riding out weigh the cost of granting the temporary monopoly? The problem with the law is that it sidesteps this question. Its based on an 19th century notion of invention, whereas the real value of patents is protecting investment into R&D.
Right. And I think that's a useful consideration to use. I've worked on some algorithms in the past that were the result of a few million dollars in R&D. We decided not to patent because of the gray areas involved, but instead kept the algorithms protected by distributing only compiled code (as is pretty common in industry). But good solid protection for that kind of investment would be a useful thing to have even if it's a software patent.
One-click shopping? I believe there was lots of effort put into engineering it, but not so much on the R&D side.
Is a patent examiner qualified to implement whatever decision is made on where that line is? I think it's still going to remain a minefield for a very long time.
One-click shopping? I believe there was lots of effort put into engineering it, but not so much on the R&D side.
Is a patent examiner qualified to implement whatever decision is made on where that line is? I think it's still going to remain a minefield for a very long time.
> based on an 19th century notion of invention
I think this is one reason the courts have also not had much luck finding any useful & principled theories of invention to apply. The law assumes a kind of classical "eureka!" theory of invention, where there is normal work and then the occasional Invention, which few scholars these days think is how technological advances actually happen. So if the courts were to try to read a scholarly book on either the history or current state of technological advances and try to make use of its concepts (courts sometimes do that kind of thing, if they can find something that will help them make a principled distinction) there would just be a big mismatch in basic assumptions and framework. So they don't, and instead are stuck with trying to make the best of a kind of cobbled-together theory of what constitutes an invention vs. a non-invention. And at this point, absent Congress significantly rewriting patent law, there isn't really much they can do except continue that process of accretion, by doing line-drawing in the gray areas of the existing case law when an opportunity arises.
I think this is one reason the courts have also not had much luck finding any useful & principled theories of invention to apply. The law assumes a kind of classical "eureka!" theory of invention, where there is normal work and then the occasional Invention, which few scholars these days think is how technological advances actually happen. So if the courts were to try to read a scholarly book on either the history or current state of technological advances and try to make use of its concepts (courts sometimes do that kind of thing, if they can find something that will help them make a principled distinction) there would just be a big mismatch in basic assumptions and framework. So they don't, and instead are stuck with trying to make the best of a kind of cobbled-together theory of what constitutes an invention vs. a non-invention. And at this point, absent Congress significantly rewriting patent law, there isn't really much they can do except continue that process of accretion, by doing line-drawing in the gray areas of the existing case law when an opportunity arises.
What will be interesting, in my opinion, is how they draw the distinction.
They don't have to draw a distinction, of course. The last time a finance patent came before the Supreme Court in Bilski in 2010, there were two theories about why the patent in suit wasn't valid under 35 USC §101. Four judges agreed with each theory, leaving only Justice Antonin Scalia to decide. Scalia joined with the conclusion of each side and the theory of neither, leaving the situation even more confused than before.
Most likely the exact same thing will ensue this time.
They don't have to draw a distinction, of course. The last time a finance patent came before the Supreme Court in Bilski in 2010, there were two theories about why the patent in suit wasn't valid under 35 USC §101. Four judges agreed with each theory, leaving only Justice Antonin Scalia to decide. Scalia joined with the conclusion of each side and the theory of neither, leaving the situation even more confused than before.
Most likely the exact same thing will ensue this time.
With the Federal Circuit punting it to the Supreme Court, I don't they will leave it that vague. The Supreme Court does not like bright line rules for patents, I think they will come up with a balancing, multi-factor test.
If it seems unclear where the boundary line for patentability should lie, then it seems reasonable to apply caution and only allow patenting of that which necessitates it to ensure invention occurs at all. From what i can tell, that would eliminate 95% of patents. There is an argument to be made that patents harm innovation in nearly all industries, not just the software industry.
For things like business methods patents, the idea isn't that we need to get innovation to occur when it wouldn't otherwise. The idea is that we want to get it published when it otherwise wouldn't be, so that the knowledge isn't lost after the people who knew it die.
It baffles me why we have a patent system (to address precisely this problem) and also legal protections for "trade secrets".
It baffles me why we have a patent system (to address precisely this problem) and also legal protections for "trade secrets".
Well, if this is serious(I hope it's not just more bad journalism from the washington post), I'd be very happy to see software patent go off the table. It would mean I could finally stop worrying about submarine patents on software, and get back to actually making good software.
If you were a mechanical engineer whose specialty was developing new fasteners would you say the same thing about patents on fasteners?
i wrote a blog post on this, but i believe crowdfunding, assuming regulation and government policy don't interfere, will accelerate the demise of patents, especially software patents. the purpose of patents is to foster innovation, but they arguably seem to have the opposite effect today.
effectively, patents protect the two constituent groups required for innovation: (1) creators and (2) investors.
music, art, film, restaurants, and mobile apps demonstrate that patents are not necessary for people to invent (though some IP like copyright seems mandatory). in some fields, the joy of creation and the promise of financial gain, even if unprotected and unsustainable, is sufficient motivation for invention.
the common thread, of course, is capital efficiency. it's far easier to risk investment and innovation when little money is required. investors are needed for innovation in capital intensive areas, but investors historically have been ROI motivated and sought assurances, such as patents, that their money will yield a return.
crowdfunding enables creators to break from ROI-investors and find financing from a different set of people: those who want not a ROI, but a specific product or service. most importantly, these "investors" care less about patents or the long-term viability of a company. they just want a product/service to exist -- from anyone.
we're already seeing this unfold on kickstarter and indiegogo. the question is whether lobbyists and governments cripple crowdfunding, or allow it to reach its maximum potential.
if people will innovate, regardless of patents, and other people will underwrite products, regardless of patents, why do we need patents to foster innovation?
effectively, patents protect the two constituent groups required for innovation: (1) creators and (2) investors.
music, art, film, restaurants, and mobile apps demonstrate that patents are not necessary for people to invent (though some IP like copyright seems mandatory). in some fields, the joy of creation and the promise of financial gain, even if unprotected and unsustainable, is sufficient motivation for invention.
the common thread, of course, is capital efficiency. it's far easier to risk investment and innovation when little money is required. investors are needed for innovation in capital intensive areas, but investors historically have been ROI motivated and sought assurances, such as patents, that their money will yield a return.
crowdfunding enables creators to break from ROI-investors and find financing from a different set of people: those who want not a ROI, but a specific product or service. most importantly, these "investors" care less about patents or the long-term viability of a company. they just want a product/service to exist -- from anyone.
we're already seeing this unfold on kickstarter and indiegogo. the question is whether lobbyists and governments cripple crowdfunding, or allow it to reach its maximum potential.
if people will innovate, regardless of patents, and other people will underwrite products, regardless of patents, why do we need patents to foster innovation?
The purpose of patents isn't to incentivize innovation. Its to protect capital intensive R&D from the free rider effect and to allow the fruits of R&D to be the subject of transactions. Crowd funding in this context is a joke. Wake me up when someone crowd funds a blockbuster anti-cancer drug or disease resistant crop. We're talking capital investments that start with a 'b'. Nobody is going to fund that if the results can be easily copied (eliminating ROI), whether we're talking about traditional investors or crowd funders.
A great example is the Spaceship One patents. The arrangement there was that Scaled Composites would do the R&D, and Paul Allen would invest, and companies like Virgin would commercialize. Having a property right that can be the subject of transactions is tremendously valuable for these sorts of arrangements.
A great example is the Spaceship One patents. The arrangement there was that Scaled Composites would do the R&D, and Paul Allen would invest, and companies like Virgin would commercialize. Having a property right that can be the subject of transactions is tremendously valuable for these sorts of arrangements.
The purpose of patents absolutely is to provide incentives for innovation. What you describe as the purpose (protecting capital intensive R&D from free riders) is merely the method.
To the extent that the method does not result in the purpose, the patent system is a failure.
To the extent that the method does not result in the purpose, the patent system is a failure.
i'm not sure why you say patents aren't supposed to encourage innovation: http://en.wikipedia.org/wiki/Patent. they exist to encourage invention by ensuring someone cannot copy your r&d efforts. after all, the purpose of r&d is to innovate and discover. i didn't say patents would be abolished immediately or for all sectors. pharma products, in particular, require hundreds of millions of dollars and cannot get crowdfunded right now. but if we're to ever eliminate patents, crowdfunding will play a central role.
> The purpose of patents isn't to incentivize innovation.
That's directly contrary to the text of the U.S. Constitution, article I, section 8, clause 8, which gives Congress 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."
The Supreme Court's canonical explanation of patents' constitutional purpose was written by Justice Clark, for a unanimous Court, in Graham v. John Deere Co. of Kansas City, 366 U.S. 1 (1966): [1]
==BEGIN QUOTE==
... The clause is both a grant of power and a limitation. This qualified authority, unlike the power often exercised in the sixteenth and seventeenth centuries by the English Crown, is limited to the promotion of advances in the "useful arts." It was written against the backdrop of the practices—eventually curtailed by the Statute of Monopolies—of the Crown in granting monopolies to court favorites in goods or businesses which had long before been enjoyed by the public. See Meinhardt, Inventions, Patents and Monopoly, pp. 30-35 (London, 1946).
The Congress in the exercise of the patent power may not overreach the restraints imposed by the stated constitutional purpose.
Nor may it enlarge the patent monopoly without regard to the innovation, advancement or social benefit gained thereby.
Moreover, Congress may not authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available.
Innovation, advancement, and things which add to the sum of useful knowledge are inherent requisites in a patent system which by constitutional command must "promote the Progress of . . . useful Arts."
This is the standard expressed in the Constitution and it may not be ignored. ...
==END QUOTE==
Id. at 5-6 (emphasis in original, extra paragraphing added.)
As 'wnoise correctly points out down-thread, protecting capital-intensive R&D from free riders is not an end in itself, but merely a means for achieving that end.
[1] http://scholar.google.com/scholar_case?case=9105652591497305.... The decision was 7-0; two justices (Stewart and Fortas) took no part, which usually means they recused themselves because of conflicts of interest such as personal business investments in one of the parties.
That's directly contrary to the text of the U.S. Constitution, article I, section 8, clause 8, which gives Congress 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."
The Supreme Court's canonical explanation of patents' constitutional purpose was written by Justice Clark, for a unanimous Court, in Graham v. John Deere Co. of Kansas City, 366 U.S. 1 (1966): [1]
==BEGIN QUOTE==
... The clause is both a grant of power and a limitation. This qualified authority, unlike the power often exercised in the sixteenth and seventeenth centuries by the English Crown, is limited to the promotion of advances in the "useful arts." It was written against the backdrop of the practices—eventually curtailed by the Statute of Monopolies—of the Crown in granting monopolies to court favorites in goods or businesses which had long before been enjoyed by the public. See Meinhardt, Inventions, Patents and Monopoly, pp. 30-35 (London, 1946).
The Congress in the exercise of the patent power may not overreach the restraints imposed by the stated constitutional purpose.
Nor may it enlarge the patent monopoly without regard to the innovation, advancement or social benefit gained thereby.
Moreover, Congress may not authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available.
Innovation, advancement, and things which add to the sum of useful knowledge are inherent requisites in a patent system which by constitutional command must "promote the Progress of . . . useful Arts."
This is the standard expressed in the Constitution and it may not be ignored. ...
==END QUOTE==
Id. at 5-6 (emphasis in original, extra paragraphing added.)
As 'wnoise correctly points out down-thread, protecting capital-intensive R&D from free riders is not an end in itself, but merely a means for achieving that end.
[1] http://scholar.google.com/scholar_case?case=9105652591497305.... The decision was 7-0; two justices (Stewart and Fortas) took no part, which usually means they recused themselves because of conflicts of interest such as personal business investments in one of the parties.
You're right that's the stated purpose of patents. But that rationale arose before we had a solid understanding of modern economics. I'm talking about the rationale for patents in that context. Its prevention of free riding. Just as Posner would say the purpose of the tort system is to shift the cost of exercising care to the party that can bear it at least cost, or the purpose of environmental laws is to internalize negative externalities, etc.
Point taken -- maybe a better phrasing would be that the purpose of the patent system is to try to mitigate disincentives to innovation, viz., the free-rider problem.
The solution might be to limit protection to machine code and the improvements in semiconductor design and conclude that higher level programming is routine experimentation (call it if a pimple faced teen can develop it in a hackathon it is per se obvious).
Actually that's almost already the standard. I can't speak to the specifics of how it's enforced, but something is legally unpatentable if a pimple faced teen could develop it in a hackathon. The standard is whether it is non-obvious to a person of ordinary skill in the art.
What people say the standard is is quite a different thing from what the standard actually is. Don't look at the text of the law, look at what gets patented and what doesn't. The text is irrelevant.
Please oh please United States, come to your senses for once. Sincerely, The Rest Of The World.
Does "the rest of the world" include Britain, Japan, and South Korea?
True or false?
A patent is a government-granted right to sue.
A patent grants a license to produce the invention.
A patent grants a "monopoly"; success is court when suing challengers is "guaranteed".
Here are the answers:
I suspect not many readers understand the above facts.
If you purchase a US patent, this is what you get: a right to sue.
Nothing more and nothing less.
If you have any doubts that the above is true, ask your lawyer.
Knowing exactly what a patent is should make you think more carefully about what a patent may or may not "incentivize".
T
F
F
I suspect not many readers understand the above facts.
If you purchase a US patent, this is what you get: a right to sue.
Nothing more and nothing less.
If you have any doubts that the above is true, ask your lawyer.
Knowing exactly what a patent is should make you think more carefully about what a patent may or may not "incentivize".
When old (and stupid) patents hinder innovation (what happens all day today), than the patent system becomes the biggest hindrance to innovation. Somebody said about IP: When it is better to "own" old IP than to make new one, the system is strangling innovation, nothing else. We already at this point (and it was fostered by the owning people).
Patents once where made up, to bring inventors an incentive to share their inventions with the others. But this "sharing" brings only benefits to the society, when the inventions bring any knowledge gain to the community.
Software patents are the worst: Most of them include trivial things that do not bring any new knowledge to the industry, but are blocking other inventors. Good example is Amazons One-click patent (but this is only one of maybe thousands examples): What is the knowledge gain of the world, by having this patent?
This system is for the "owners" not for the "creators"!