Groklaw Says Microsoft Patent Portfolio Now Worthless

twitter writes "P.J. concludes her look at the Bilski decision: 'you'll recall patent lawyer Gene Quinn immediately wrote that it was bad news for Microsoft, that "much of the Microsoft patent portfolio has gone up in smoke" because, as Quinn's partner John White pointed out to him, "Microsoft doesn't make machines." Not just Microsoft. His analysis was that many software patents that had issued prior to Bilski, depending on how they were drafted, "are almost certainly now worthless." ... He was not the only attorney to think about Microsoft in writing about Bilski.'"

Comments

What is a machine?

[140Mandak262Jamuna]

Does Turning Machine counts as a machine?

Re:What is a machine?

[LinuxIdiot]

I sure dont know about a Turning Machine, but a Turing Machine just might count!

It doesn't matter...

[nebaz]

I think Microsoft wins either way. They are not generally a patent troll company, nor are other large companies (IBM) with massive patent portfolios. If their strategy was to countersue little companies which had (somewhat) frivolous patents as a defensive measurement, they win either way. Either their patents are valid, in which case they have a good defense strategy, or they are not, and neither are the patent-troll lawsuit patents. I read somewhere it costs $10,000 or so to file a patent. This is chump change to Microsoft.

Re:It doesn't matter...

[zappepcs]

It depends on how you file, whether you use a law firm etc. What is certain is that defending a patent is NOT cheap. Going up against MS is kind of like a college kid who can't really afford school trying to defend themselves against the RIAA.

If software patents fall away to only those that actually make sense, or fewer, perhaps the industry can get back to making innovative software and creating value rather than working on protective measures to stave off patent suits.

Thinking laterally, this means also that smaller developers won't have to worry so much about falling foul of patents. This is nothing but a good thing.

Re:It doesn't matter...

[UnknowingFool]

Yes, but MS has thinly veiled patent threats against Linux which are now even weaker. Before it was just FUD to keep people from moving to Linux. MS could never actually launch any suits because their partners like HP and IBM have huge Linux investments and large patent portfolios and would have to get involved. Now, MS can't really bring use these threats as effectively because people would point to the Bilski decision to counter.

Re:It doesn't matter...

[eldavojohn]

I read somewhere it costs $10,000 or so to file a patent.

I think the costs (depending on if you qualify as a "small entity") vary on filing fees ... you should really point out that the $10k figure comes from patent lawyers you hire to make sure your patent comes through in a timely fashion. If you don't have an army of those, the smallest slip of forgetting to cross reference another patent could cost you decades. Yes, refiling and additional services listed on that page will drive the price up but a timely patent is probably worth much more than what you would save if you didn't have a patent lawyer. If it's a one time thing, I would suggest finding a firm.

This is chump change to Microsoft.

If you're applying for 10 or 20 patents a week then this isn't "chump change." It's more than likely several million dollars a year for an entity like Microsoft. I think it's still important to Microsoft because of what investors see a patent portfolio as: pure assets.

Re:It doesn't matter...

[morgan_greywolf]

Right. But it's effectively no change... Microsoft really can't afford to piss off IBM with a patent suit against anyone over Linux. That's what SCO v. IBM has shown the world -- IBM is the world's largest patent holder, they've staked a good portion of their business on Linux, and if you mess with Linux, IBM is going to send their Nazgul after you, just as they 'blackened the skies of Lindon, UT' with lawyers.

Even Microsoft can't go up against IBM in a patent fight. Tring to beat IBM in a patent fight is like trying to take down an F-22 with a slingshot.

Re:It doesn't matter...

[Jah-Wren Ryel]

I think Microsoft wins either way. They are not generally a patent troll company, nor are other large companies (IBM) with massive patent portfolios.

Just because they aren't trolls doesn't mean they do not make a significant portion of their income from patent licensing. If their patents are no longer valid, then obviously their licensees are going to stop paying royalties.

While I am too lazy to dig for URLs right now, if you look, you will find that patent licensing is a huge part of IBM's business nowadays and that about a decade ago, Microsoft hired the man chiefly responsible for monetizing IBM's patent portfolio so that he could do the same for Microsoft.

Some patents still apply

[Locke2005]

Sure, but the Microsoft Butt hinge with integrally formed butt straps patent is still valid, so watch out for Microsoft cornering the world market on butt hinges! (I suspect Microsoft does have a fair number of hardware patents for mice, keyboards, etc.)

Re:Some patents still apply

[EmTeedee]

Actually, this either never was or isn't anymore a Microsoft patent. It's now assigned to Kawneer Company, Georgia. See page 15 here: http://www.google.com/patents?id=14gCAAAAEBAJ&printsec=drawing&zoom=4&dq=Butt+hinge+with+integrally+formed+butt+straps#PPA15,M1

Re:Some patents still apply

[ceoyoyo]

They've got a patent on an optical mouse using a blue LED, don't they?

Turing machines and turning machines

[tepples]

Yes, a turning machine, also called a lathe, is a machine. A Turing machine, on the other hand, is an abstract mathematical construct. A real Turing machine cannot exist in a bounded universe because by definition, it can store an unbounded amount of information. You might be looking for a linear bounded automaton, which is this universe's closest counterpart to a Turing machine.

Re:Turing machines and turning machines

[sakdoctor]

Linear bounded automaton, AKA Joe Six-pack

Mice, keyboards, xbox, ...

[xbytor]

Microsoft has put out some good hardware over the years. They must surely own some patents that cover this stuff.

Good

[dedazo]

It's always invigorating to read twitter flamebait in the morning, but I doubt anyone can make a case that Microsoft (or, before CmdrTaco's edits, "M$") is a patent troll, or that it uses patents offensively. Even that FUD about Linux infringing 200+ patents is nothing more than hot air.

If anything, Microsoft has been a large target for patent trolls, and they have been rather successful at it IIRC. I think it's amusing to see people like our notorious troll here obsess with Microsoft's patent portfolio when there are smaller and more dangerous fish to fry in this delightful niche.

Someone might want to call IBM and let them know about this though. And Google. If Microsoft's patent portfolio is "worthless" then so is everybody else's. Which is a good thing, don't get me wrong, but I think it will be a while before courts start punishing actual patent trolls.

Re:Good

[StreetStealth]

Even that FUD about Linux infringing 200+ patents is nothing more than hot air.

If it's backed, however tepidly, by an army of Microsoft lawyers, does it still count as hot air?

Granted, Microsoft's stance is far removed from the sniping virulence of the average patent troll. Still, a troll's a troll, even if it's the lame level 5 in the dungeon entryway.

Re:Good

[dedazo]

Patents are like nuclear weapons. The big boy have the majority of them, but there's a tacit agreement (ala Mutually Assured Destruction of the Cold War) that they are for deterrent purposes only. The third-world Chihuahua dogs of the patent scene like Eolas are using their limited arsenal as they can to wrest some cash from the big boys. Sometimes that works, and sometimes it doesn't.

What we all need is complete disarmament, so the big boys can't bluster about theirs and the little yapping dogs can't use theirs either. Everybody wins.

Fresh off the wire: Apple sued over iPhone web browsing, by another little patent troll. Reform is needed to stop this. I think companies like Microsoft, IBM, Google and Apple would be more than happy to stop pursuing defensive patents if the IP laws in the US and elsewhere ensured that they are not going to get nailed by the yapping dogs.

Bilski wasn't about software patents

[The Empiricist]

Bilski was about business method patents not tied to any machine. The Federal Circuit tried to make this clear in the In re Bilski opinion itself (page 21):

We further reject calls for categorical exclusions beyond those for fundamental principles already identified by the Supreme Court. We rejected just such an exclusion in State Street, noting that the so-called "business method exception" was unlawful and that business method claims (and indeed all process claims) are "subject to the same legal requirements for patentability as applied to any other process or method." 149 F.3d at 1375-76.[Fn23 Therefore, although invited to do so by several amici, we decline to adopt a broad exclusion over software or any other such category of subject matter beyond the exclusion of claims drawn to fundamental principles set forth by the Supreme Court.]

It is true that the validity of many broadly drafted claims may be at issue, but many software claims just do not make sense unless the claims are understood to be tied to computational devices. For example, Beauregard claims, which are claims on a computer readable media adapted to implement a method or system, are considered patentable by the PTO. These kind of claims are very popular because they allow patent holders to go after the software distributors rather than end-users.

It will be harder to enforce software patents, now that the defense lawyers can wield Sec. 101 with more power. But it is a mistake to declare victory against software patents based on a case where all the PTO wanted was for the patent applicant to add "computer implemented" to the claim language.

Re:Bilski wasn't about software patents

[Zordak]

You nailed it (are you a lawyer? Who else reads Patently-O?). I like PJ. I really do. But this is a case where she just heard what she wanted to hear in the opinion, found somebody who agrees with her, and has run with it ever since. As you pointed out, the PTO has upheld Beuregard claims since Bilski issued. That is a trivially-easy way of turning a software claim into a device claim. Honestly, I wondered about the viability of most software claims after Bilski issued, but now that we've gotten a clear signal that Beauregard claims are still good, it would be malpractice not to write software claims for your clients.

So no, Microsoft's patent portfolio is not dead. If they have patents that they think are in danger after Bilski, they can go into reissue and either do Beauregard claims (if they don't have them) or tie them to a particular machine. They can do this even on old patents, because they will be asking for narrowing amendments. In any case, Microsoft's patent portfolio is largely about volume. Each patent stands on its own. It's not "dead" until each and every one of those patents is individually attacked and killed, which is unlikely to happen for two reasons. One, litigation is expensive. Two, some (maybe even most) of them are going to survive in some manner or another (or in other words, if you throw enough spaghetti against the wall, something will stick).

Cue the onslaught of basement-dwelling armchair lawyers who come out of the woodwork to "correct" me any time I say anything about IP law on Slashdot.

"Microsoft doesn't make machines."

[ionix5891]

dont they make XBOXs ...

Re:"Microsoft doesn't make machines."

[Tastecicles]

let's have a look at the innards of my son's xbox crystal which he just drowned in orange-flavoured soda...

HDD: Seagate. No.
Processor: Intel. No.
Memory: Samsung. no.
Northbridge: NVidia. No.
GPU: NVidia. No.
various I/O, timer and controller chips: Texas Instruments. No.
Controller ports: I have no idea. Possibly not, although they are in essence, usb ports with slightly more robust terminal connections. ...in fact, I don't see one single component in there that has a Microsoft logo on it. Given that the HDD and some other components actually state "made in Taiwan" somewhere on the label, I can only conclude that the box was assembled in China. The software, on the other hand...

kernel/UI: is a multiboot system. He has the choice between the classic xbox Win2K kernel/UI (Microsoft), the extended interface that allows him to copy games directly to the HDD and do all manner of other wonderful and weird stuff to the system and play any of several thousand in situ games via any of the dozen or so emulators (almost certainly not Microsoft), and Linux (ha!).

So no, they don't make machines. Their scrollwheel mice were built by Logitech (albeit maybe to Microsoft's specification). The kernel software that shipped with the xbox classic was... well, sort of. Microsoft codeveloped NT with IBM under the label "OS/2". OS/2 died a horrible death, NT was a victim of its own success.

Re:"Microsoft doesn't make machines."

[Tastecicles]

no, NT was a rename of the OS/2 3.0 development snapshot which Microsoft ended up with after their spat with IBM in the early 1990's and continued to evolve into the NT kernel, which they first used in NT3.1, released on 27 July 1993.

The reason NT started at version 3 is because versions 1 and 2 were already released as the collaborative effort and named OS/2 versions 1 and 2.

(sources: MSDN, Technet, Wikipedia - all correspond with each other timeline-wise and factually, so they can't /all/ be wrong).

Re:"Microsoft doesn't make machines."

[StikyPad]

And Logitech outsources to factories in China, which get the raw materials from other companies, who lease the mineral rights from governments, which exist only through the will of the people, who were born from some other people, ad infinitum. Your point? For all practical purposes, Microsoft indeed makes mice and Xboxes, and Apple makes Macs and iPods. The person who signs the paycheck of the assembly line worker is irrelevant.

Re:"Microsoft doesn't make machines."

[lenester]

OS/2 died a horrible death

Truly horrid... it died for lack of Windows compatibility. And it lacked Windows compatibility because Microsoft was able to convince a judge that Windows 95 was a new and unique product, not covered under the settlement order requiring Microsoft to hand over their API code (enforced through WFW3.11, including win32s).

I might still be using it today, otherwise.

Re:"Microsoft doesn't make machines."

[lgw]

The NT kernel was mostly the vision of Dave Cutler, and you can see his VMS roots in places. While OS/2 was co-developed with IBM, the "OS/2 parts" of the NT kernel were mostly hidden in the OS/2 compatibility layer (which technically isn't the kernal at all). Win32 was a new direction, and IMO reflected Dave Cutler's work on making VMS work with 32-bit addressing.

On top of the kernel, NT offered the choice of programming against Win32, WOW, the POSIX-compatility layer, or the OS/2-compatility layer. The fact that you could write against multiple compatibility layers, and these layers could wrap multiple kernels (Win95, plus NT for I386, Alpha, AMD64, Itanic), was the key to Microsoft's early success: they used to be all about backwards compatibility.

Now, for some reason, Microsoft seems to disdain any sort of backwards compatibility. Clearly a culture shift.

So, who wants to go first?

[confused one]

So... Who wants to be the first one to try violating one of Microsoft's software patents and test it in court? Hmmm?

If the only hammer you have is a tool...

[MarkusQ]

Algorithms are not patentable in many countries. So what people do to patent them is they say that they apply for a patent on a "computer system running the algorithm described". Which is a reasonable thing to do since it's pretty hard to run algorithms on a sheet of paper these days.

The counter attack there being the "not obvious" leg of patentablity. Using a tool for it's intended purpose is considered obvious, and therefore not patentable. Since running algorithms is what computers do, by definition, it's a short step to an "obvious, therefore not patentable" attack.

Basically, the argument is if you have a nail that isn't patentable and a hammer that was specifically designed to hit nails with then hitting the nail with the hammer is obvious and not patentable.

--MarkusQ

Re:If the only hammer you have is a tool...

[julesh]

Basically, the argument is if you have a nail that isn't patentable and a hammer that was specifically designed to hit nails with then hitting the nail with the hammer is obvious and not patentable

OTOH, patent lawyers' heads are also not patentable, but hitting them with a hammer is not obvious, and might in fact be patentable.