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Open Defensive Patents?
"Dear /.,
There has been quite a tide of discussion lately regarding the inadequacy of the U.S. patent system when it is faced with technical intellectual property issues. Much of the controversy surrounds the ability of large corporations to patent what are apparently basic or obvious implementations of Internet technology (The Amazon one-click shopping patent, the AskJeeves use-a-question-to-search patent, etc.). The main gripe seems to be that much of the underlying technology which was produced in a communal, open, free-exchange computing culture is being seized, caged, and milked in patent form by mere opportunists looking for a way to insure the wealth of their family line for the next several centuries. Of course, this wealth is extracted from the hard work of the people who developed these technologies, whom in large share come from the general open-source community.
The corporate types and their lawyers will object thus: "Well, if *we* don't patent this stuff, *someone* will, so why should we be the ones to get screwed?" This is the basic argument for the defensive patenting that is going on all over the industry.
How about this idea: We can't fight the patent system, and it's not going to simply disappear, so why not try to make use of it? How, you ask?
Open Defensive Patents.
The geist of this is that obvious technologies are patented, but these patents are granted to a class of people, or to a community, or (what the heck) to everyone, thus rendering their legal power useless. You can think of them as Public Domain patents if you like. Well, I Am Not A Lawyer, much less an expert on patents, but I did think this was an angle to the issue that hasn't been addressed, so I though I'd toss it into the collective /. mind for comments or ideas. It does make a good prima facie case, but there are certainly going to be subtleties to patent law or licensing that I cannot see.
-Rob "
Well, I've always liked the idea of a "shared pool" of patents that does for the patent system what the GPL does for copyright. In this case, I think an actual organisation would be appropriate - the Open Patent Organisation, or the Prior Art Organisation. Another option is to do as in the bugroff license, which establishes a World-Wide Bugroff Association of which everyone who acquires the software is a member.
These are all interesting ideas... but I can't really do much, not being in the US and all.
To the editors: your English is as bad as your Perl. Please go back to grade school.
The thing to do isn't to get a patent, but to publish the technology instead, so that it can't be patented at all.
A central repository of prior art would be useful, as somewhere to refer to for help in settling bogus patent claims. www.prior-art.org and www.prior-art.com both exist, but don't seem to contain much at the moment, so they may or may not be relevant.
I would suggest the opposite approach. Rather than trying to cover every possible loophole at $10K a pop, it would be in our best interests to establish a central "Prior Art" repository, with a searchable database indexed on likely terms. That way, we are more likely to find Patent Office clerks turning down patents based on common industry practices, rather than the current situation, where underpaid and overworked white collar staff seem to be approving anything they can't understand, and relying on expensive lawsuits to strike down anything that is out of line - and who has the money to take on these sorts of cases?
--
-=DaveHowe=-
I thought that making a technique open source gives it unoriginality and/or obviousness. Thus not patentable.
So the thing to do (as has been mentioned before under this subject) is to have a public repository of groovy and original-looking code in an easily understood and multiply-implemented form - in the pedantic style of patents.
So USPTO just drops by whenever someone tries to patent the Unix runlevel daemon idea - and learns to understand us and our code and culture in the process. So this site must not be anti-USPTO, is the point I'm making, there.
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Dere's a storm a-comin'...
It seems to me that a lot of this problem could be resolved if these kinds of "software technology" patents were submitted for peer review, in much the same way that scientific & technical research papers are scrutinized by experts prior to publication. I don't know if the U.S. Patent office simply doesn't have the expertise to properly research the prior art in these cases, so perhaps certain experts (e.g., college professors, other recognized experts) could be sent copies of the patent applications for their review and critique.
1. It takes time and money to actually go through the process of doing patents; if we're going to have a Free Patent Foundation (so to speak), someone's going to have to be doing all the work for this, and since patent licensing fees would presumably not work as a revenue source... :)
2. In order to really have this be effective, we would need to patent a *LOT* of things. Even if we patented everything we could think of, there would still undoubtedly be things we'd miss, that some opportunist (as he put it) would take advantage of; but this would definitely reduce the number of stupid patents owned by greedy companies. However, multiply #2 x #1 and we've got lots and lots of patents, taking up lots and lots of time and money.
3. In theory, since the patents would all be "open", meaning they are totally unrestricted in their use by anyone, then we might still have boneheads like Amazon.com patenting *the same thing* and ignoring our patent entirely. I would not put it past patent lawyers to figure out ways to acquire a patent on something that has already been patended, except for making minor changes that would distinguish it to the USPO. (As we've already seen, the USPO will apparently grant a patent to anyone for anything.) So later, when a legal situation comes up, Big Companies like Amazon will win in court due to superior mu$cle, even though their patent isn't really legitimate (not to mention that their case will probably be frivolous to begin with).
IANAL, so I'd appreciate anyone's clarifications on this. I'm just basing this on what little I know of patent law here in the states.
"Destroy science and religion. Science would re-emerge exactly the same; but not religion." - Penn Jillette, paraphrased
The political solutions:
1. Make patent applications get posted on the Web so that they can be pre-empted by prior art, rather than challenged after approval (doesn't
Europe do this?).
2. Shrink patent lifetimes for software patents (if not ban software patents altogether).
Internet patents should live on Internet time.
(How's that for a sound bite?)
But, aren't these solutions going to be defeated by entrenched corporate interests?
For every corporation that benefits from the current dain-bramaged implementation of US patent law, there are several that suffer. I really don't think this ridiculous situation will survive the next few Congressional sessions.
The idea of open patents is a good one, although as stated previously, just publishing the method should be sufficient to prevent a patent being granted. One concern that I would have with such a system is the potential for companies to point to the *lack* of some open-patent in such a system as evidence that no prior art for such a method exists.
flossie
Write now. Defend liberty
My line manager explained the way patent infringement works.
Both companies pile up all their patents, and whoever has the heaviest pile wins.
Most companies actually use their patents defensively, or arrange a swapping deal. If the patent is actually useful, then they are usually tolerant of people experimenting with it as long as they don't try to use it directly against them, because the patent will still apply to possible derived technologies, which will make the patent that its derived from more valuable.
The difficulty comes from the companies with a single patent that their whole business is based on. Then the patent is more valuable to them to keep a stranglehold on the market, by eliminating direct competition.
If we created a patent and allowed everyone to use it, then these companies would still be able to use this ill-mannered behaviour simply because we can't patent everything. I think what we really need is some patents with a licence that allows free use for non-profit purposes, and free use to all organisations who own no patents. The patent could be donated to a non-profit organisation, who would fund the patent applications by charging reasonable licencing fees to large companies. Most companies who can afford patents can afford a reasonable licensing fee. The licence fee would be used only to cover costs, and fund the occasional counter suit if a company tries to prevent an open source rival by using a trivial patent.
At the Public Patent Portfoloio Consortium (P3C) there are links to a Technocrat article about this, and to OpenPatents.org.
Disclaimer: I'm not impartial. I created P3C and wrote the Technocrat article. OpenPatents.org belongs to someone else.
perl -e 'srand(-2091643526); print chr rand 90 for (0..4)'
Obviously, this would be insanely expensive.
Furthermore, if the stated intent of involved parties is to "patent all the obvious things that the patent office shouldn't let slip through" then the patent office may well simply ignore any patent applications from them (and I can't say I'd blame them).
If the Open Source community could manage to gather these funds, a much better way to spend them would be to hire patent lawyers to go around and knock down all the silliest software patents.
Other good ways to spend it would be government lobbying and PR campaigns: to eliminate software patents, shorten patent durations, improve the patent office (I don't care how swamped they claim to be, with $10k filing charge, they ought to be able to hire someone bright enough to point out that XORing a pointer onto a screen is trivially obvious; there is a monstrous bureaucracy eating those payments and not doing its job), etc.
Of course, gathering that kind of money is a non-trivial implementation problem.
The trouble with prior art is we only knock out patents one at a time---we have to find prior art for each one, and then we still have to deal with the next, and the next, and....
A patent portfolio, on the other hand, allows us to pull the teeth of many patents at once, because our portfolio allows us to threaten large companies with stupid patents, just as they're doing to us. We offer to cross-license, they allow free software use of their patents, and we've neutralized their whole portfolio in one go.
At least one problem, though, is Inter-Mega-Ware may well be willing to spend the cash to invalidate our patents, while we don't have the wherewithal to do the same to theirs. Still, it's an idea that needs following up.
I refuse to believe corporations are people until Texas executes one. -- desert rain on http://www.dailykos.com/user/
Hmmm. You could certainly try. In fact ISTR that US patent law allows you a year after publication to patent the invention, so this is still open.
However it would not invalidate the current trade secret law suit, and I'm pretty certain that the current injunction would apply to publication by patenting. Once you have won the law-suit THEN you can go for the patent, assuming you haven't missed that 1 year deadline.
OTOH you might be able to use this as a bargaining counter. Point out to the MPAA that if they lose the suit then they will have to license CSS off you, rather than the other way around. Then offer a deal where they drop the lawsuit and injunctions in return for a free license or something.
Of course, IANAL, and if there is one thing a scheme like this needs, its a competent lawyer to look at it. There may well be something in trade secret law that blocks the whole idea.
Paul.
You are lost in a twisty maze of little standards, all different.
If all you are going to do is patent something to establish prior art, you are wasting your time and money. Other fields have long established journals for just this purpose. Some of these journals even allow anonymous publication so that if a company decides to publish to get something in the prior art they don't reveal to their competitors who is developing the technology.
There is no need to re-invent the wheel. Other technology areas have been dealing with patent law for up to 300 years, and have well established methods for handling certain problems.
Many countries have signed a treaty which gives national status to inventors from other countries who wish to apply for patents. Thus, if you apply for one in your country, it is probably equivalent to applying in the U.S. (provided that you actually do apply within a year).
Furthermore, the Internet is an international beast. If someone infringes a patent from *any* country over the Internet, an infringement award can probably be had...
So, just because the U.S. has the most aggressive patent system doesn't mean that you can do much.
By the way, simply publishing an invention has the same effect as patenting it. The only thing is that a patent is presumed to be valid, so it is a big advantage to have one.
This however isn't a perfect world, and as we have seen in the past, there are ways of getting around / avoiding patents which already exist. As has been commented before, it is easy enough for companies to get patents on technological ideas when patents for the same things already exist.
Where everyone's efforts should be concentrated (IMHO) is following up the bogus cliams made and accepted, and pushing for a change in the patent rules to stop it from being done.
As a possible thought, how about setting up an organisation to check up on these things (as has been discussed), but in order to provide finance for inevitable law suits to contest patents when needed, the organisation pushs the large (and not so large) corporations for support. Get enough on side and the cost to each is minimal, yet the potential positive publisity is very large. Also, if company x patents something illegally which it's competitors would like to use, it would be in their own best interest to collaborate with the organisation and each other to overturn the patent.
With centralisation to manage how it is all organised, and pulling the right levers in many companies, it could become a force to recone with. Companies might not be worried by the threat of government intervention on these matters, but how would they feel if they knew that if they tried to break the rules, they would find themselves alone, up against the whole (or the majority) of the computer industry.
Instead of paying $10K, we should set up a pool of "provisional" patent applications. For under $100, a provisional patent provides no offensive power, but clearly puts each idea out in the PTO database of "prior art". After a year, the provisional applications expire, but their existence should work as a block to unscrupulous patentees.
Similarly, there is a statutory invention index that are "defensive" patents which go through the PTO obviousness review, but cannot be used to sue. Either of these ideas is practical. It would be simple to set up a web based group to handle this. Any takers?
My line manager explained the way patent infringement works.
Both companies pile up all their patents, and whoever has the heaviest pile wins.
Pithy and amusing, but clearly false as a general statement. The truth is far more interesting
Consider Microsoft (then owner of only a few hundred patents), and STAC (then owner of 1). Verdict: Microsoft liable for patent infringement to the tune of $110M.
Present tense, we are seeing Priceline.com (few dozen patents) suing Microsoft (thousands of patents).
There is some truth in the proposed statement in certain circumstances (cross licensing between industry giants), but aside from being funny-sounding, it does not really inform the question.
The better way of saying it is to note that there are many uses for patents, including offensive (revenue-generating, competition-eliminating) uses of patents and defensive (cross-licensing; counterclaim protection) uses of a patent portfolio. Much depends upon whether a company is going for a large number of relatively weak, narrow, "covering" patents, in lieu of a carefully crafted, expensive patent of very broad scope.
The difficulty comes from the companies with a single patent that their whole business is based on. Then the patent is more valuable to them to keep a stranglehold on the market, by eliminating direct competition.
All patents suffer this problem, but in practice, markets being what they are, single-technology companies tend to generate more revenues by licensing fees than by extorting monopoly rakes. The vast majority of patents aren't practiced at all. Of those that are practiced and commercially meaningful, the vast majority are exploited by licensure.
There are certainly notorious examples of companies that have taken "seminal" patents out of circulation throughout its term (e.g., Polaroid), but to do so, there needs to be the rare combination of a stranglehold seminal patent, and no meaningful alternative in the marketplace.
Patents are extremely territorial in scope, and law varies nation to nation. A U.S. patent excludes people from making in, using in, selling from, importing to or offering for sale from the United States, and with exceptions does not apply to purely extraterritorial transactions, for which local law applies. You need a patent in each country in which you would like to enforce a patent.
Various treaties permit you to file foreign national applications within a limited time period after a domestic application, or to extent that period de facto by filing a so-called PCT application.
But the invention must be patentable according to each coutnry's national law to obtain a patent there. Virtually every country considers foreign patents and publications as prior art (although some, but not all, consider foreign public uses or sales).
It is highly unlikely that you could obtain a later patent on an antedating work in a foreign jurisdiction, and even if you could, the offering of or importing into the domestic nation where the work is patented by another would be a patent infringement by *you*. (Highly oversimplified analysis of an highly oversimplified hypothetical -- on subtly different facts the end result can be quite different, just trying to give you a taste of the considerations).
In the 90's workers were abused to work longer hours than were healthy. Products were useless if not some times dangerous yet were sold anyways. Mom and Pop operations were quickly swallowed up by greedy conglomerates, and those not swallowed were forced out of business.
But I am not talking about the 1990s... I'm talking about the 1890s. In that time the industrial revolution had started full swing in the US and most of the money of the time was held by only a few people (Rockafeller, Vanderbilt, etc). And the reason that happened was because there were not laws on the books to protect the people from them.
Now the arena has changed but we have the same situation. Defensive Patenting may be the answer but private organisations have historicly not been able to compete with large corporations. The corporation has time and money on its side, and time and money will tend to win the day in the legal arena. What eventually broke the strangle hold of the huge corporations of the 1890s was protests and the formation of labor unions to fight for worker rights. The government also had a hand in this when they founded the FTC.
Alternativly though instead of defesively patenting ideas; maybe creating an organization of open source programers who could then lobby the Federal Government to change the laws may be more effective. We already have forums here to get our ideas heard by one another, why not get some organization?
As I understand the US law, you are allowed to copy whatever you want from patents for PERSONAL USE.
You are free to make copies of the patent instrument, of course (which is a copyrightless government publication). On the other hand, if you "make" or "use" the invention, you are infringing, regardless of use, and even if you didn't make profits, would be subject to injunction a reasonable royalty and court costs, plus possibly treble damages and attorney fees.
No where am I seeing a discussion of PROCESS patents. Like one-click shopping. Or scratch and win (as a web application)? Exactly HOW are you going to create a 'defense pool' of the classification of process patents?
By inventing new, useful and unobvious processes and filing the applications?
I agree that much thought needs to go into the licensing approach for a patent pool, and I would not use FSF for that purpose either. But the fact that there are complex questions doesn't mean this isn't a capital idea once fully developed.
Given the rather frontier nature of this vapor-rush, the biggest problem is not so much the patent system, but the problem of convincing existing companies who benefit disporportionaly from the current framework to abide by a more enlightend system of protecting intellectual property. What are the problems?
... especially for wanna-be software architects. I think the general concensus is that the barrier is too low, perhaps it should be in proportion to the size/length of a company's existant so a start firm would only need to patent $1K ideas whereas 800 pound market gorillas would be charged $1M (to prevent illgal collusion and strip-mining of less well funded efforts and ensure that startups get a fair go.
Exclusitivity - the whole patent philosophy is based on the legal exclusion of parties from copying the idea without compensation. The problem is that ideas breed, the more you generate and intermix with others, the more valuable combinations emerge. So rather than trying to protect the ideas, a better solution is to just hire the people with good track record of new ideas directly.
Originality - when is an idea genuinely original and ground-breaking rather than variation on others? Also given the ease of combining software, patenting near-infinite combinations of functions in the hope of picking something that appeals disproportionately to the consumer is a matter of brute force, rather than careful design which should be encouraged
Cybersquatting - claiming an idea and then sitting on it waiting for other people who've actually spent time to develop related ideas and then sinking them is a little reprehensive as society generally prefers that rewards be proportionate to effort. Perhaps a system where the initial patent is free, but you get charged an increasing amount each year to force people to use it or lose it would convince the horders and non-serious players to find someone else to rip off. In principle with general law, you should bust rent-seeking behaviour and try to award protection to those who have actually improved value
Period of control - 17 years is way to long for software. Perhaps valid in the old days when constructing factories took that long to pay for themselves but soft ideas get dated much more quickly. Perhaps have a system combined with other so that after 3 years of a challenge period, you get charged n * 10^(years/5) so that when the cost of protection becomes higher than the utility, the patent is released to public domain and avoid cluttering up the existing record. If ideas expand exponentially, think of how much junk you have to wade through in 2050!
Dispute mechanisms - this is somewhat related to tort reform because when you've got major players squabbling like kids over a favourite toy, it seems a little undignified. As technology moves in waves, how do you prevent another person half-way around the world to patent a similar idea when they're ignorant of your work? People looking back at say barbed wire might consider it rather minor nowadays but back when they first came out, there were major legal battles over who would get the profits from fencing in the west. Perhaps rather than fighting it out in court, they could go to a market drive system of rights (e.g. to distribute) sold at public auction
I don't have any real answers, but I would think the solution is more dependent on thinking through the economic incentives and redesigning the process to suppress negative behaviour while encouraging worthwhile endeavours. To sum it up
- period of initial non-exclusivity so people can spot prior art
- originality barriers in size to company
- reward people for the improved value/implementation
- vary the period of control by increasing the fee/year so to declutter the public record
- look at public auction of derived rights (e.g. to distribute) to establish fair market values
It really is a thorny problem and IMHO the technology/speed of development has just made the concept of patents a dead-weight loss the way it is currently designed.
LL
First, it is worth mentioning that this would be a good idea for enviromentalists or humanitarians who are affraid of things like terminators genes.
Second, the solution is to compramize your principals when you need money, i.e. the worse the application of the patent (the more polution in the enviromentalists case or the more non-OPLed patents it is being used with in our case), the more you charge the person to use it. This means the orginisations which actually hold the patents need to pubilically acountable for their actions.
Third, Universities and Research institutes are satarting to consider using patents as a source of funding. Making the open patent lisence or enviromental patent lissence work could be as simple as pushing these research institutes to put very pro-enviroment and anti-intelectual proterty people in charge. Scientists are frequently few pro-enviroment and anti-intelectual property (the idea that anyone can use it so long as they publish too, i.e. GPL, should be very appealing to these people) so this could be done by pushing these ideas on the scientists that work at these places. We could get people to sign something saing that they will *make a reasonable effort* to not allow their patents to be used for evil and they will only enter into contracts which allow them to back out IF the person is doiong something bad with the patent. If all the researchers are on our side then we will win.
Jeff
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
This system should be:
- International in nature, including translation tools.
- Understandable by non-professionals.
- Easily and inexpensive to update.
- Note that this causes it's own problems. I'll use Network Solutions as an example. Because it's so cheap to register your own domain name, companies now register multitudes of them. If it was expensive to register domain names, only the rich could get them.
- networked in nature so that any new item can point to the items it's based off of. Under the new system I would suggest that you reward people based on the strength of their prior art searches, not the weaknesses.
- Uses a seach engine to hunt for "similar" patents. This search engine would check for items with similar "parents", "grandparents", "uncles". This would mean that if I base my patent off a gas stove and a bathtub, I would still pull up a match (x%) with someone who based their patent off an electric heater and a goldfish bowl.
An interesting thesis for someone. Then all we have to do is get the governments to pass laws regarding it.-----
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No Zen is good zen
Is it legal? Yes. Is it ethical...
I didn't make the rules of the game. And I've no choice but to play. So I can only do my best to win.
IBM has a similar service as well. What do you think they use the "obscure patent nominations" for ;-)
Baker's Law: Misery no longer loves company. Nowadays it insists on it
http://www.sigsegv.cx/
The geist of this is that obvious technologies are patented, but these patents are granted to a class of people, or to a community, or (what the heck) to everyone, thus rendering their legal power useless. You can think of them as Public Domain patents if you like. Well, I Am Not A Lawyer, much less an expert on patents, but I did think this was an angle to the issue that hasn't been addressed, so I though I'd toss it into the collective /. mind for comments or ideas. It does make a good prima facie case, but there are certainly going to be subtleties to patent law or licensing that I cannot see.
/., I'm struck by how many people seem to have a fundamental misunderstanding of what is involved in getting a software patent. Perhaps it's because few of you actually have one, so you're unable to grasp some of the basic concepts.
Every time I read a patent issue on
Hopefully, I'll be able to make a lot of the process clear. You see, I have earned a software patent...two actually (5,727,154 and 5,987,505). While I realize that to many of you, that makes me "The Enemy", hopefully, you'll be able to put aside any initial knee-jerk reactions and listen to what I have to say.
It's not entirely accurate to think that everyone who gets a software patent is somehow wishing to stifle innovation. I'm just a software developer, who had an idea, same as most folks. Mostly, like anyone else, I want honest monetary consideration for my work...which doesn't make me much different than anyone else.
I've seen developers work themselves to the bone, hoping for an IPO payoff. I've seen a lot of start-ups chasing after venture capital. Well, one of the ways to help secure venture capital is to have something truly innovative, which is what a patent is supposed to be. A patent lends instant credibility to the idea you're trying to sell, and makes it easier to convince investors to part with some of their cash. Of course, they get a piece of the pie when they do. However, I'm not here to debate the value of patents. I fully support anyone who wishes to give their ideas away for free to to the community. I'm mostly just want to explain what is involved in getting a patent.
Some people seem to think that the Patent Office gives out patents to software companies like trading cards, and that all it takes is a bit of cash and a lawyer and you magically can create some kind of money-generating patent overnight. This isn't really the case. Most of you seem to be missing the "filing date" part of the published patent. Most patents, software patents included, take about 3 years to get, once filed. One of mine took 4, and we still have one in the works! Patents don't get filed until there's already a good amount of work spent creating the invention, and even more work done preparing for the filing. Then, countless unpaid hours (if you're an original inventor, and not assigning your patent to the company you work for) are spent educating your lawyers and educating the patent office. Of course, it'd be nice to recoup that later with royalties...same as many people work slavishly for start-ups hoping to recoup their efforts later with stock options and IPOs.
Amazon's One-click shopping seems obvious now, with cookies and other technology...but computer technology moves fast. Was it as obvious in September of 1997? Probably not. I had the idea for my patents way back before the internet was really starting to get "big". I remember reading magazine articles at the time about how the whole internet thing "could be" the next greatest thing. Now, just a few years later, some of the scope seems hopelessly out-of-date. Of course, when I was developing my ideas, modem-based bulletin boards were big, and most "internet" connectivity was unix shell accounts, newsgroups, and the like.
Are there abuses? Of course...it's a part of life. Anyone who thinks the world should run perfectly and everyone should give 100% for the good of the community is a bit naive (IMHO). Maybe the world SHOULD work that way, but it doesn't, and never has. But, I see a lot of cries of those "evil greedy corporations abusing the patent system with obvious patents"...and these cries just don't usually jive with the amount of time spent getting a patent. A lot of times, when the patent is filed, the idea truly IS innovative. Perhaps the answer is a shortening of the time during which a patent covers a technology. Judging by the speed at which technology turns over, that wouldn't be a bad thing. But, part of the answer needs to rest with the USPTO..they need better-educated employees, and they need to move patents off of their desks faster (either approving or disapproving them). It seems rediculous to me to have an innovative idea get obsolete by the time the patent number is issued, and it seems equally rediculous to me to think that Amazon will have a lock on "one-click" for the next 17 years or so.
/* Disclaimer: This is merely a rant */
Why does it seem that those who least understand the system always scream the loudest? No where is this more true than when slashdot discusses Intellectual property. Damn few here have ever patented anything themselves. Even fewer have ever developed a usefull product with it. Yet, we have 10k experts telling us how the system IS, and how it needs to be improved.
I'm not an expert with the patent system by any means, but nor am I purporting that we need to toss the system out the window (or anything radical like that). However, I do happen to have a number of friends and family in the high-tech industry, who have developed a number of products and technologies (startups), and I know a thing or two. I have some bones to pick with slashdot, a few of which are:
a) One major slashdot misconceptions is that the startup/entreprenuer can no longer afford to patent, or that it is geared strictly in favor of big companies. From personal experience, I can tell you that this is simply untrue.
b) That just because the patent office OKs a patent, does not mean you are protected. That is, and always has been, the case. The real test is the courts. So most of these "obvious" software patent gripes on slashdot are pointless. It is not new to software, and it hasn't stopped other industry.
c) Intellectual property is still very necessary (not everyone on slashdot disagrees with this, but many do). To extol the virtues of those 2 or 3 open source companies, and draw from that that IP is uneccessary is even more absurd. I hear all these sycophantic calls about Redhat's sucess, that "support" revnues are sufficient. Their only real major success right now is as a financial security. Redhat is not even profitable yet, and the long term viability of their current model is still VERY questionable. Currently, RedHat's "support" division contribution to their income is negligible. What little money they have made, is by selling their software and manuals based AROUND convenience alone, not IP (that much is new). This convenience method probably can't last, atleast not on a microsoftesque scale. Put simply, if Redhat were to ever approach 1 billion dollars in software (convenience) sales, you can be sure that the competition will move in with byte for byte copies of their software (and maybe even toss some extra stuff in), and sell it for half the cost. The point is not that Redhat is a horrible company, but merely that they are not tried and true. To suggest we scrap all traditional business models based on one nominal and questionable success is naive. But I digress..
d) That "defensive" patents are only used by evil companies, and that they cause harm to the system. Again, being very familiar with a few companies that use them, this is not true. I feel that part of the problem is that many on slashdot don't understand that the solution lies in the COURTS, not at the patent office. As such, overly narrow patent(s) can prove to be dangerous. Overly broad patents can, and are routinely, struck down. You erect these patent walls such that you have a defensible position in court. The stronger your position, the easier it is to defend. The less likely you are to be steamrolled, especially by much bigger companies. It is not just big evil companies that use these, if anything, it's even more crucial for a startup.
In summation, if you want a good picture of the state of the patent system, talk to a successful entreprenuer who's actually done it. Not people who've NEVER been there themselves; the academics, open source advocates, lawyers, and company, in general can't see the whole picture. I know my rant isn't going to change the general tune of slashdot, but perhaps I can appeal to a few more rational individuals.
/* Aspestos Suit: On */
I used to work for a small company that was a wholly-owned subsidiary of major PC vendor based in the northern plains. MOOoving right along, we did lots of cutting-edge software development with just released or unreleased hardware (translation: bleeding edge, and boy was there a lot of blood).
The main thing that we actually got into production was a large whole-machine interface package for a top-end line of their computers. It took a lot of time and effort and even after it was released it didn't really garner much fanfare in the public arena.
I started to do the math and our Return On Investment(ROI) to see why we were kept around. There were 20-25 people of different sorts. Six or seven developers, two artists, 6 platform guys(hardware or process), 2-4 testers depending on the stage of development, two contractors, a secretary, four managers and one VP. The Pres spot is reserved for a corporate big-wig. When I started to examine their cost structure and their revenue I started to wonder. Taking into account the mix of talent, you could use a round figure like $50,000 a year as an average salary, then add on the Human Resource overhead of 50% you get $75,000. Multiply by 25 and you get $1,875,000 in annual personnel expenses. Add to that facilities cost. The office was maybe 5,000 square feet so at a rate of $2/sq foot that comes to $10K a month or $120K a year. The fractional T-1 might be $1K monthly or $12K. Most other costs, like utilities can be lumped together , I'll just say all other costs total to what the rent amount is, $120K a year. So, we have
Salaries: $1,875K
Rent: $ 120K
T-1: $ 12K
Other: $ 120K
-------------------
Total: $2,127K
If the model this software was installed on sells 2,000 units a month, costs $4,000 and the gross margin is %20, that means $16,000 a month in gross profit. Say the software is attributed 10% of the gross profit, that would come to $1,600 a month or $19,200 a year. Granted, my percentage figures can't be accurate but I think they are good guesses. According to my numbers this model would have to sell 100 times better then this scenario, or some combination of 100 times between margin, sales and software percentage, for the subsidiary to pay it's own way.
Obviously nobody would be willing to fund this kind of startup without some prospect of getting something out of it. A major emphasis was on turning in "Intellectual Property" disclosures, a.k.a, patents, mostly of the software variety. Now, don't get me wrong, they had some really cool stuff but when disclosures are part of the quarterly goals and are listed in your annual review, you get the impression that they are important, not to mention that this was blatently stated numberous times, "patents are a very important part of what we do" (actually paraphrased).
Basically, we were a patent factory. It didn't matter as much if none of our products shipped as long as we were disclosing IP. They liked their products to ship as much as the next guy but it was always a struggle to the the parent company to have a clue how to take advantage of the software we wrote. A somewhat common occurance was that they didn't think of us until it was to late for us to provide them with anything useful.
Where is this leading? I thought you'd never ask. The reality is that unless you have one of those super-important patents, like IBM's scrolling screen patent, your goal as a company is to gather a portfolio of patents to defend yourself against other companies with porfolios of their own. There are two scenarios. The first is the company who is collecting a defensive portfolio, the second is the company who plans on aggressively enforcing a patent. They both are caused by the Patent Office's ignorance and that should be the main focus of our ire.
Now, this is my understanding on patent law. We had the legal guys from corporate come and brief us on the issues and this is what I can remember: In the US, you have 1 year after you publis to submit a patent application. Publishing means anything from a technical article at a conference to including the technology in a shipping product. This is normally not a problem but to be protected internationally, more countries require no public (as in to anybody not bound by a NDA) disclosure until after the application is filed. This means that if you want the broadest protection, you wait until after the application is filed before you make the information public. Another aspect is that patent applications are not available to the public. A patent is only released to the public after the application is accepted. This means that the only way for us to combat stupid patents to to be informed when they are issued and then start a challenge based on prior art that may not have been considered during the application process. The submitter is focussed on getting it issued and the PTO doesn't do much of it's own homework so it's up to the public (usually competitors) to challenge patents.
In closing, if we want to take more control of the patent situation, publish information as soon as it's "discovered" and then keep an eye on any patent that involves the published material and then challenge it if it was applied for AFTER the published date of the article or whatever.
We the Sheeple...
Second, the method you describe is an urban legend. It doesn't hold up in court. Ask any lawyer. Ask any professional in a field where this idea's put forth- for instance, I saw this idea debunked in the field of song publishing, where the idea was to write songs and mail them to yourself to prove you had copyright. It doesn't hold up, it's worthless legally. Give me an afternoon with a kettle and a scalpel and I'll steam the bugger open and tamper with the contents- come on, you're not even advocating a seal of some sort.
I'll confess- I have some ideas in envelopes. I had 'em notarized, too. They're still worthless as proofs, and it's about time I opened them and did something else with them. My suspicion is that the best thing to do (in a 'libre' sort of way) is not to establish ways of stashing away ideas in storage, but establishing a way of publicizing the ideas, of giving them glaring publicity in a context where many people can see them and where they can be indexed and searched on by patent examiners, who'd be able to add a "step 247: do quick search of IdeaBazaar for related terms" to their process.
This would not be making any claims to protectability for the ideas involved- indeed, you could express ideas that were (unbeknownst to you) already covered by patents, harmlessly. But it would be perhaps the only sensible way to establish ideas into the public domain in such a way that they couldn't be taken back by the patent process. I know that for me (foolish though this may be) I'm not so concerned for nailing down My Claim to good ideas I may have. I'm justifiably concerned that somebody might sneak in, grab my idea while it's relatively unknown, patent it and then forbid me or anyone else to use it- or for that matter, that for every couple ideas I sit on, one is probably already working its way through the patent office to be locked up and forbidden to me. I find that situation untenable.
So, can we instead have something like SourceForge, only instead it's a heavily searchable hosting service for ideas that are to be established as public domain? Doing this could better the world, lead to widescale deployment of any ideas that are truly great ideas (including competing commercial products that compete on price not IP), and make such ideas widely accessible to individuals. I can honestly say that I would throw my entire portfolio (largely audio hardware, but I'm an inveterate idea-scribbler in all fields) behind such a scheme. Who's with me, and is there anywhere we can start this up?
If someone invented a cure for cancer, AIDS, the common cold and measles and put it on the net, the idea would become ubitiquous and, indeed, no-one would think the IP was worth money.
There's a big difference between IP value and human value, and anything with enough human value will produce business around it even if the IP is valueless. Look at agribusiness- nobody is claiming that growing things is IP, but going out and doing it is worth money.
You can hold whatever viewpoints you like, but making things public domain is merely turning over the money-making to implementations- it's giving the corporations you like so much a chance to use their efficiencies of volume, while still allowing individuals to work on a much smaller scale.
That said, I entirely agree with part of your point here- to my way of thinking, what's needed is an IdeaBazaar (tm), like a weird hybrid of mp3.com, SourceForge and slashdot, where people can establish accounts and add to a huge monster database of easily searchable public domain ideas. This could further innovation immensely, and obviously it would not be restricted to software alone.
The primary motivation would be cooperation, but a very important side effect is that (as you rightly point out) this is the most effective defense against the threat of secret patents popping up in a field of endeavor to halt innovation and forbid further work. To those who (justifiably or not) fear that anything they come up with will be wrested from their hands by corporate lawyers... and this is the motivation for all this wild talk of FSF patent pools etc... such a scheme would be the ideal counter-agent, being a centralized database of 'ha, patent THIS!' ideas, glaringly public.
In addition, there's another level- since the place would be divided into personal areas (bazaar-like 'shops'), if any particular inventor was genuinely talented and doing this for personal reasons, their area would quickly become a hot-spot, with many corporations and individuals dropping by to take the nifty ideas. Such popularity could establish such an inventor as a noted figure, giving them useful publicity and also very likely bringing them offers to solve other problems, for money, outside the public domain (and sign over the solution to a corporation, naturally.) That, obviously, is worth money. Being publically accepted as someone who can think innovatively is definitely worth money. Your value is not your inventions. Your value is the kink in your brain that gives rise to your inventions. Never forget that...
This is for the purpose of establishing prior art while allowing the inventor to conceal their invention with the intent of future patenting and restricting. If you want to establish prior art, set up a place where people can publicise their inventions on the web, and tip off as many people as possible (and the Patent Office) to the existence of this place. Then anything published there becomes prior art by virtue of publication on a page people are actually reading. Hopefully it would become popular. I can picture corporations reading such a site avidly, because if one corporation tried to patent something covered by such a place, a competing corporation would be able to spend its own money and lawyers proving that the idea was in public domain by referring to the idea site. This is very different from publishing on some dumb little web page. Establishing a high-traffic, glaringly public site would be crucial.
Would somebody please establish a public domain inventions site? Not a 'these are bad patents that got overturned' site, or a 'our little patent pool' site, but a SourceForge-like model for hosting public domain inventions, whether for software algorithms or processes or mechanical contrivances- anything that can be covered by a patent.
I already checked on IdeaBazaar and both the org and the com have been taken by God knows who- they are cheesy 'under construction' pages, and I have no great hopes that either will become what I'm talking about.
We need an unrestricted PD site in which ideas are intensely searchable and attributed to the inventor responsible for them- this would serve as a glaringly public resource for prior art (I have no faith in little personal websites being useful for this purpose), and could further innovation a great deal by providing unrestricted access to publicised inventions.
It's important that this not be bogged down by restrictions that would only stop the site from being used at all. Making a purely public domain site would be cheap (costing only the price of the hosting, and it could arguably be text-only for very efficient use of resources- that or small graphics for illustrations, never for decoration), and doing it with a media splash would ensure that the site _be_ legally accepted as public domain- all you need to do is get two corporations taking note of it, and then if one tries to take anything for itself the other will be ready to send lawyers to argue that it's prior art, and none of the FSF's money needs to get spent at all! :)
Seriously. We need this- we need a resource for publication of _all_ types of patentable ideas in the public domain, and we need it to stick to establishing stuff in the public domain, with no loopholes or extra conditions to confuse the matter. Please, somebody grab some domain that would work for this, and let's set something up. Particularly at first it wouldn't be that costly. I'd have already grabbed www.ideaforge.org and be offering it for nothing to sourceforge (assuming they like the idea), except that I don't have a credit card and since I registered airwindows.com Network Solutions seem to have stopped using any payment option I have available. God knows what I'll do in May when airwindows' two years runs out o_O
The ATVEF spec for enhanced TV already uses this model. Companies who "adopt" the spec get a free license to the patents from Intel and others who spearheaded it. License agreement here.
-Merlyn42
The audience doesn't care if it's hard.
To get a patent (software or not), you must have an original idea or product.
If anyone, here, has a good idea, you can make some software and GPL and distribute it. Then nobody but you are able to patent it.
So then, what's the point of a "Public Domain patents" ?
I'll do it for cheesy poofs.
Ok. Because I was ranting, I did not use as precise or as complete language as I would normally use. We, in reality, share a similar point of view. Allow me to clear up a few misperceptions you have about my beliefs.
Let me preface this by saying that I was addressing many often stated sycophantic statements on slashdot, and that:
a) I don't think the Patent system is perfect
b) I don't think that the patent system can't necessarily be improved
c) I'm not a big fan of VCs (though not worthless) empirically speaking, though theoretically they're highly valuable.
While I think there is definetly a great deal of theoretical space for improvement in the patent system, particularly where it pertains to the startup, I do not think it is simple by any means. Humans and companies are at constant odds with one another, I don't see any system in the future that will make judicial remedies much less unnecessary. The intellectual property system is messy largely because life is. We are never going to find a perfectly equitable and educated and intelligent patent office, particularly given that it is a government agency. By removing judicial intervention, and resigning ourselves to paper and bureaucrats, we would be subjecting ourselves to a highly inflexible system, that can't adapt very well at all. There are trade offs to be made (yet there still is a fair amount of crap in the middle). As such, we leave it to judicial processes, where both sides can present their case when and where disagreement arises. This is not to say that nothing can be done to improve the state of things, but rather it's not nearly as simple as most on slashdot purport it to be.
When I was addressing the fact that the real test of patent is the courts, not the USPTO, I was referring to the test for the viability of IP protection. I was specifically addressing the frequently uttered concerns of Slashdot Jr.'s about every patent claim, and telling them that the claims are not the same thing as reality. Most of these aggregious patents will not stand up. Furthermore, I was not implying, by any means, that intellectual property and the legal means to support it are, in and of themselves, sufficient. I'd be the first to tell you how important it is to have an excellent CEO, good management team, a good business plan, a differentiable product that people would want to use, capital to finance actual development, and many other things.
While IP alone does not cover blood and sweat, it can provide sufficient protection of your idea, that would allow you to justify an investment of blood, swear, and tears into a product or service. If the entrepreneur lacks the intelligence and/or the capital to properly develop (market, finance, etc) the product and the company, the IP probably won't do them any good anyways. This is part of the reason why I feel that many of these would-be entreprenuers are, in reality, not as greatly affected patent costs as many would indicate. It does erect increased barriers to entry, but I sincerely believe that most competent CEOs will eventually clear it. In short, I believe the capital market system does a reasonably good job, on the aggregate, of delivering money to people who can actually develop a viable product with it.
Regarding Redhat's market capitalization, we have a difference of opinion here. In my opinion, merely returning to the "support" model, does not warrant a market cap of 16 billion dollars. If support is indeed the way to go, as you say, and RedHat remains truely Open Source, why should RedHat retain a market cap. at 16b, when the competition (LinuxCare, et. al) is every bit as prepared to offer support as RedHat is (particularly when the competition is not at all burdened by R&D costs)? My point is not so much that the support market is irrelevant, but rather how can RedHat gain the majority of that market share? In either case, Redhat is unproven, and 16 billion dollars is not even approximately in proportion with the risks. Even under a best case scenario (maximum reasonable growth potential) 16 billion dollars is a hell of a lot.
Well, Redhat's valuation is crazy, but I don't think it's crazy when you compare it to it's competitors. The market is crazy right now, and so valuations reflect that. Redhat has significant first-mover advantages, and has the highest name recognition in it's space. It's also aquired Cygnus, which is a well proven business, and will be the source of a lot of their revenue.
Redhat's game isn't just to provide service. What they really provide is "Branding". "Branding" has justified the valuations of companies like Coke, Pepsi, and Heinz, so I don't think Redhat should be any different. Redhat doesn't just brand their support. They use their brand to charge a premium for services, and in the long run that can be VERY profitable.
sigs are a waste of space
"Branding" may sound well and good, but RedHat is fundamentally different from Coke, Pepsi, Heinz, you name it. Besides the fact that Coke and Pepsi are established multibillion dollar companies, with huge sales and profits (e.g, there is little doubt that people will continue to buy Coke next year), both also spend hundreds of millions of dollars on marketing. Take Pepsi, they have a market cap of only 48 billion right now, but revenues of 21 billion, and almost 2 billion in profits. They're valued at 48 billion because they've got significant earnings, not because they own the word "Pepsi".
Furthermore, even though many (myself included) think the differences between, say, Coke and Pepsi are minor, many will say they taste different. Why is this? Because they DO in fact contain unique recipes. If you could buy an exact copy of Pepsi, in the same bottle, with merely different letters, for half the cost, would you still buy Pepsi? Yet with GPL software, this is exactly what you get. You can be sure that you're getting a byte for byte copy, and perhaps even additional propietary features from the competitors who choose to free load.
Now this might not apply to service contracts, but they haven't even started there. Perhaps RedHat has a chance, but is that chance worth 16 billion dollars by any stretch of the imagination? I don't know about you, but I can't think of any service firms in the high tech industry that competes on the same level (no IP) as their competitors (e.g., not Sun, IBM, or the like), yet still enjoys charging a premium based on their namebrand.
In the low technology service industry, I do know of atleast one company that does this, but they compete on price, do a better job for less money, while simultaneously enjoying higher profit margins than their competitors. The problem with this analogy though, is that I don't know if it could translate very well to a large (needs to be to justify a 16 billion dollar valuation so many years off) technology support company. Furthermore, this company is relatively young, with an extremely experienced CEO that knows how to run a company, and relatively small (well if you count the management atleast, which is what they specialize in). Even though this company is still growing quite rapidly, I don't think it would translate very well on the supposed scale of Redhat. Other than that, the analogy is a good one, because the company hires the same class of employee is their competitors, likewise I don't think RedHat can reasonably expect their lowest level support employees to be any better than the competition.
As it stands today, RedHat may have a name for themselves as a GPL contributing company, but they're pratically non-existent in service. Where are their service gurus? (I admit, I haven't looked at their management lately) I'd expect them to bring in an experienced management team at this alone, as it's a very different industry. Merely wanting to do service and holding a name that is popular in a different arena is not sufficient in the corporate arena.
Sorry if I'm rambling, but i'm tired...perhaps tomorrow.
If Redhat's future earnings are to come strictly from support, than I don't see how they can hope to grow all that rapidly. Unlike the software industry where you just merely print more software, service requires correspondingly large teams of people. Can they GROW at even 50% a year, for the next 10 years, and retain their same quality, especially with relatively low margins? (assuming they have high service quality to begin with) I think the service industry is very different from standard software. But if you have any examples that match the various criterion I listed, I'd love to hear them. While no precedents might not mean it is impossible, that market cap still gives me troubles. I would love to be wrong this time.
...back to bed. G'night
But Coke and Pepsi do contain different recipes and carbination processes. Though I personally couldn't give a damn, some people, atleast, can tell them apart. Many more yet claim they can. This is particularly true when it is Coke (et. al) vs. the generics. Whether it is their imagination or not is irrelevant, they feel justified because the recipes are unique. While it may be possible to create a cola that tastes intrinsically better than Coke, people are creatures of habit. They acquire a taste (real or imagined), and demand it.
The type of branding that Redhat needs to do will not hold out, when and if Redhat's market for their software climbs to Microsoftesque scale. Granted, they have generated significant revenues by selling this software at current date. Two points though:
a) RedHat packages used to package commercial software on their CDs (e.g., MetroX), until just recently. Cheapbytes never did this.
b) Cheapbytes CDs come without paper manuals and documentation. When the market grows, the free-loaders will copy this documentation. (RedHat's documentation really aint that great)
c) The market for Redhat's software has been relatively small, and as such the market for virtually free copies is even more non-existent. Your average linux newbie likely doesn't know that cheapbytes exists.
d) A number of Linux supporters, such as myself, have purchased RedHat's official CDs because we believe in what they're doing. I've seen Redhat spend some money on R&D and add value, thus i'm willing to purchase it at a premium. This is not going to translate with the growth, that loyalty won't hold.
e) Then there is what I call "convenience" sales, though somewhat redundant. Redhat has the market share of their own software because the market is small. It hasn't warranted any competitors to invest in properly marketing and documenting redhat's software. If Redhat's software climbs in popularity, you can be sure competition will enter.
These factors in combination leave me little doubt that CD sales will amount to much, not enough to justify even one fraction of their current market capitalization.
Support is vastly different. Deloitte & Touch and Anderson Consulting are heavily established companies with elite reputations in various industries. What is Redhat's reputation? They're a company that writes GPL software, who in the process has collected something of a following amongst techies. Are IT managers and management going to write checks based on this reputation? I have my doubts.
I'm sorry, but this stuff about a company not needing profits is bs. In the short run yeah, a company can do without them for awhile. Today, Redhat may have enough capital infusion such that they don't need to grow organically. But they can't survive in the red forever. Furthermore, as I alluded to earlier, having capital does not necessarily mean that they can properly grow their support division at a rate that could warrant their current market cap.
This is not to say that I believe that RedHat can't grow, but it is not going to be consistently huge growth--not the kind that would justify their valuation. Furthermore, Redhat and the majority of these Dot Coms are way overvalued. Worse yet, most of these companies lacking the profits, or even the revenues, to grow organically on their own, are going to fall on hard times when they no longer have these red hot valuations. These companies are likely going to go the way of the Bio Techs, red hot one minute, and the plague the next...but I digress.