Venture Capitalists Lobby Against Software Patents

ciaran_o_riordan writes "No matter which side the US Supreme Court's Bilski decision pleases, it will be just the beginning of the software patent debate in the USA — the other side will start a legislative battle. The lobbying has already begun, with venture capitalist Brad Feld arguing against software patents, mailing a copy of Patent Absurdity to 200 patent policy setters. As Feld puts it, 'Specifically, I'm hoping the film will bring you to an understanding of why patents on software are a massive tax on and retardant of innovation in the US.' The patent lawyers and big patent holders often tell us that patents are needed to secure investment, so it's interesting to see now that venture capitalists are refuting that. And Brad Feld isn't the only vocal one; there's a growing list."

Comments

Absurdly obvious

[burnin1965]

The patent lawyers and big patent holders often tell us that patents are needed to secure investment, so it's interesting to see now that venture capitalists are refuting that.

Seems logical that a venture capitalist would see the absurdity in software patents. After all, how many venture capitalists are investing in all the fresh innovations and inventions coming out of Microsoft, Apple, Amazon, etc.

Re:Absurdly obvious

[Jeng]

Lots and lots of them actually.

Just the venture firms invest in what those companies would purchase instead of investing directly into the big names.

Now if those little firms did not hold patents would the large companies just copy the little guy?

Re:Absurdly obvious

[Anonymous Coward]

Conversely, this is a symptom of why things will not change. The big guys benefit and can use it to stymie the little people. There is too much uncertainty when things change....

Re:Absurdly obvious

[bersl2]

The start-up is first to market (by definition), and a huge multinational corporation does not turn on a dime. Nor will they chase after every new idea, nor will they always identify which ideas are the most important ones in the market for the future.

Re:Absurdly obvious

[burnin1965]

Lots and lots of them actually.

Just the venture firms invest in what those companies would purchase instead of investing directly into the big names.

Pardon me if I am misunderstanding your logic but it appears that you care suggesting investment in start ups is equivalent to investment in the big corps because the hope is the big corporation will buy the start up. While it is true that VC investment in start ups hope to profit by eventually selling to a larger corporation it is far from an equivalent to investing in the big corporations R&D.

Software patents are used to prevent unforeseen competition from fresh start ups and they cut the VCs out of the loop because they don't invest in the big corporations, otherwise they would not be VCs they would just be investors.

For a VC it makes sense to stop the software patent nonsense because it is destroying not just start ups and new ideas but it also destroys investment opportunities in those start ups and new ideas.

Re:Absurdly obvious

[Darkness404]

Now if those little firms did not hold patents would the large companies just copy the little guy?

No, because the vast majority of patent cases are where there is little to no "innovation" or when the innovation is so generalized no one really knows what exactly they were trying to patent.

Apple, Microsoft, Google, Amazon, etc. don't go searching for patents to violate, they usually create innovations independently then pay protection money to the trolls and the small firms who sell unknown products.

Re:Absurdly obvious

[burnin1965]

they usually create innovations independently then pay protection money to the trolls

Actually it works both ways.

While their primary function is not as a patent troll Apple, Microsoft and Amazon have in turn played the role of the frivilous patent litigant with the biggest difference being in their objective of halting the "Progress of Science and useful Arts" to the betterment of their bottom line.

Re:Absurdly obvious

[JamesP]

VCs should buy the patent trolls and sue the big patent holders aggressively...

TAH DAH

1 - More money for small companies
2 - Patent lobbyists will get their own medicine
3 - Profit

Re:Absurdly obvious

[Tanktalus]

Of course, the problem with that is that then they start to profit from the broken system, and then desire to perpetuate the status quo to continue to profit from it, perhaps even lobbying to keep the status quo, or extending it. Don't get them sucking on that teat, or we'll lose an ally.

Re:Absurdly obvious

[Curunir_wolf]

VCs need to make ROI with a fat R. IPOs are almost non-existent today because of the tighness of the markets.

You are correct that the market is tight, and that affects IPOs. I certainly agree that software patents produce more uncertainty and result in less innovation than would occur if copyright were the only protection for unique technologies driven by software. However, the biggest cause of the massive drop in IPOs is directly attributable to Sarbanes-Oxley (SOX) compliance. As soon as a company decides they are ready to go public, they run into this multi-million dollar wall of SOX compliance. In addition to the added expenses for the business, employees spend their time doing activities that are compliance-driven and not business or revenue-driven. Focus is taken away from strategy, sales, procurement, recruiting, operations, etcand diverted toward controls, record-keeping, IT training and approvals.

Large corporations with billions of dollars in revenue are much more positioned to absorb overhead costs associated with SOX compliance. As a percentage of revenue, SOX compliance is a negligible expense line item. But small companies that need access to the public capital markets get hurt by not having this capital source available to them, due to associated costs. Venture capital firms have traditionally liked the go-public route as a means of securing capital beyond the initial stage of company development. Given that small start-up companies have very limited amounts of cash, they are less able to fund the heightened levels of administrative costs of being a public company.

This is easily seen as an even greater impediment to companies going public than the economic downturn. Just like the government intervention that allows companies to patent software, government interference in the market in the well-intentioned ideas behind SOX becomes simply another way that existing corporations can bludgeon upstart competition with their incumbent dominance and lobbying savvy.

Re:Absurdly obvious

[turbidostato]

"Patents don't protect small companies or large ones. They're chess pieces on a board."

OK, then. What's the problem with a gambit? It usually simplifies the battlefield in ways both contenders find adequate.

Re:Absurdly obvious

[burnin1965]

This is easily seen as an even greater impediment to companies going public than the economic downturn. Just like the government intervention that allows companies to patent software, government interference in the market in the well-intentioned ideas behind SOX becomes simply another way that existing corporations can bludgeon upstart competition with their incumbent dominance and lobbying savvy.

Considering the massive financial impact investors endured from the likes of Enron, Worldcom, Tyco and others it is a tough sell to kill regulation like SOX. While it does introduce a cost burden there is a lot of that burden which should be in effect in the first place for any viable and reputable business. There is a lot of SOX costs that are blown out of proportion exactly because accounting costs that should have been in place are included with new requirements like audits.

Anyhow, costs aside the data does not agree with your assessment of the impact of SOX on IPOs.

Market pull backs and recessions that result in regulations like SOX are the cause of reduced IPOs not the regulation as can be seen in the charts in this article that clearly shows little or no impact to IPO trends from the passing of SOX in 2002. Once the market started to recover from the dot com bust the IPOs returned even though SOX was in place.

Re:Absurdly obvious

[Curunir_wolf]

Market pull backs and recessions that result in regulations like SOX are the cause of reduced IPOs not the regulation as can be seen in the charts in this article [seekingalpha.com] that clearly shows little or no impact to IPO trends from the passing of SOX in 2002. Once the market started to recover from the dot com bust the IPOs returned even though SOX was in place.

What this chart ignores is what has happened to the IPO market overall. That is, companies are choosing to list in overseas markets instead of the US, where they don't have SOX to contend with. Imagine how many more IPOs you would be seeing on NYSE and NASDAQ without this regulation driving them to overseas markets.

Re:Absurdly obvious

[Alien Being]

"The start-up is first to market (by definition)"

That's just wrong. A start-up is simply a new company.

Re:Absurdly obvious

[burnin1965]

companies are choosing to list in overseas markets instead of the US, where they don't have SOX to contend with

The chart is not ignoring anything. Without SOX would more companies do their IPO in U.S. exchanges, perhaps, would it be worth it to drop SOX and get these IPOs, lets put it into perspective...

From the Bloomberg article: "It would cost us as much as $3.5 million a year to comply with the vigorous reporting requirements in the U.S. For a $100 million company, that's 3 to 4 percent of gross revenue."

Also from the Bloomberg article: "Bush signed Sarbanes-Oxley into law in July 2002 after Enron Corp. and WorldCom Inc. collapsed in the two biggest bankruptcies in U.S. history. Enron's decline wiped out $68 billion of market value, 5,000 jobs and at least $1 billion in retirement funds."

Considering the market value alone that Enron wiped out it will take 680 years of Peach Holdings revenue to replace the destruction of the Enron accounting shenanigans. I say screw Peach Holdings, let them do their IPO over seas and we'll keep our regulations here in the States to prevent another Enron.

Re:Absurdly obvious

[Thing 1]

VCs need to make ROI with a fat R. IPOs are almost non-existent today because of the tighness of the markets.

IP makes a company ostensibly more valuable, but only if the IP makes money in and of itself, either as a production protection, or as a defense, or as part of a portfolio to go to war with.

Let's form a company to sell IPOs!

We'll create a whole bunch of Intellectual Property, and then sell Options on it!

Yea, the joke pretty much ends there. Sorry; try the veal; tip your waitresses, just not over.

Re:Absurdly obvious

[Curunir_wolf]

Considering the market value alone that Enron wiped out it will take 680 years of Peach Holdings revenue to replace the destruction of the Enron accounting shenanigans. I say screw Peach Holdings, let them do their IPO over seas and we'll keep our regulations here in the States to prevent another Enron.

You're assuming that there is something about SOX that would actually prevent those kinds of things. Recent failures and shady dealings of AIG, Bears-Sterns, Bernie Madoff & co., Freddie and Fannie, etc., etc. seem to provide evidence that all those extra costs do nothing to improve market stability or accountability, but only help the big companies get bigger as smaller companies are kept out of the game.

Re:Absurdly obvious

[Anonymous Coward]

The fact that you see these big software companies like Microsoft and Apple patenting everything under the sun regardless of vagueness, simplicity, obviousness, and outright prior art shows that while they may not follow every new idea under the sun, they're willing to patent it and try to lock up that idea so nobody ELSE follows those ideas before the large corporation that can't stop on a dime is finally able to make a big ass u-turn.

Re:Absurdly obvious

[Pinky's Brain]

Wealth concentration kills the economy ... there is no value in a factory which produces goods for which there are no consumers, and consumption is only dependent on income for poor and middle class people. So yes, market value has been destroyed.

Re:Absurdly obvious

[Teancum]

A start-up is the first to market because they are in the position to take the most risks. It is sort of implied by being new, as there is little to lose and much to gain by trying new things out. That sort of is in the definition of a "start-up".

The purpose of most for-profit companies is to "maximize profits and increase shareholder equity". By trying to be first to market, that is counter-productive to meeting this corporate charter for established companies as there are also a whole bunch of wrong guesses for what might be that hot new product idea. Being second, third, or in the second "wave" of a promising technology is certainly very useful for companies.

Apple was first to market with the Newton..... how did that work out for the company? On the other hand, when the technology matured and people like Rio established the legal precedence for portable music players, they came out with the iPod and made a fortune. That is an excellent example of why established companies usually don't make the first move on something like that. Also look at the Lisa.... something that almost sank Apple as a company too. If it wasn't for their Apple II product line at the time, they wouldn't even be around right now.

General Motors tried to be "first to market" with the EV-1.... and where did that get them? A bunch of heartache and grief, including documentaries about how GM screwed up and tons of negative publicity. Again, it generally is a very bad idea for an established company to try and be the first to market even when they try.

Re:Absurdly obvious

[Teancum]

What's the problem with a gambit? It usually simplifies the battlefield in ways both contenders find adequate.

It keeps the legal profession employed and not much more. While most larger companies are able to afford full-time attorneys and perhaps even specialists such as patent and other "intellectual property" lawyers on staff, that is something which is much more difficult to do for smaller companies or even private individuals to do even on an occasional basis.

For the private innovator who is tinkering in their garage and trying to come up with something new, I argue that patents do absolutely nothing to protect that kind of "inventor" and in fact the whole patent system turns into a giant scam that takes millions of dollars out of the pockets of these would-be entrepreneurs and instead transfers that wealth into the hands of some of the least productive people on the planet.

Even the supposed benefit of patents to record "for posterity" what has been invented is largely a joke now. There is certainly zero benefit to actually reading a patent even for somebody "in the industry" (even expired patents), and indeed there may be some strong and compelling reasons to explicitly make company policies that forbid engineers and others in R&D settings from reading patents of competitors.

Back when patents required a working model of the device (perhaps in miniature) to be filed with the patent office there was some historical benefit to the practice. At least there was something to look at for historical research to find out what, exactly, was the patent all about. It also provided a threshold to keep the frivolous cruft out of the patent office... even if the patent office couldn't figure out what to do with the models when they were done with them (one of the reasons why the model submissions were halted). For example, I'd love to see a working model of an inter-stellar hyperdrive engine... even though the USPTO granted a patent on that crazy idea.

Re:Absurdly obvious

[gnupun]

Seems logical that a venture capitalist would see the absurdity in software patents.

Is it? Patents protect profits. If a VC invests in a company that has patented their tech and the product is a hit, the patents would definitely prevent predatory competitors (like MS) from eating a big, fat slice of the profits. So it is illogical for a VC to not support patents unless he is investing in a product that is not very innovative.

To make a car analogy of the ridiculous suggestions of these VCs: "car accidents cause death and injury. Therefore cars should be banned." Software patents should not be banned. Instead they should be made more stringent to prevent creation of "junk patents" and accidental infringement that the VCs are complaining about.

Software patents are a vital requirement to allow for the survival of startups from predatory competitors and as such must be allowed as they are allowed in other fields of technology. Why the heck should software companies not get the same protection as hardware companies?

Re:Absurdly obvious

[AtomicJake]

Seems logical that a venture capitalist would see the absurdity in software patents. After all, how many venture capitalists are investing in all the fresh innovations and inventions coming out of Microsoft, Apple, Amazon, etc.

Seems logical, I agree. However, most venture capitalists that I know would not agree - or actually would only "partially" agree. My experience is: In a VC funded startup, the VCs are pressing to file as many patents as possible. They see - and probably quite correctly so - patents as some tangible currency, when the startup will be sold or floated. It has nothing (or nearly nothing) to do with securing the innovations of the start-up, but much to do with making innovations explicit to the outside - so they see it rather as a marketing expense.

Filing patents have actually very high costs, if you also include the opportunity costs of what the engineer could have done during the time spent on the patent description and all the calls with the patent lawyer. Add to this all the money that goes to the patent lawyer and also the the patent office (additionally to the filing fee comes a yearly fee - and this for all regions where your patent should be valid). A VC knows all those costs - and nevertheless wants you to file as many patents as possible.

So, ias long as patents can be filed, a VC wants you to file patents. However, if nobody (in the sector) can file patents, this might be interesting as well - since this virtual currency must be no longer acquired under the high costs as described above. And, at the same time, if patents would no longer exist in your sector it removes a lot of legal uncertainty of the investement.

Re:Absurdly obvious

[Attila Dimedici]

You make a good point, but you overlook one even more important thing that Enron, Worldcom and Tyco had in common. They did not issue dividends. I do not know the details on the other two, but Enron in particular would never have been able to pull the accounting tricks they did if they had been issuing dividends.

Re:Absurdly obvious

[Curunir_wolf]

Furthermore, market value is like energy. It cannot be created or destroyed. Only transferred.

Whoa. You were making good sense until that one. Wealth (and market value) grows and shrinks, but it absolutely can be created. It's not a zero-sum game, that's an absurd notion.

There are now somewhere around 6 billion people on planet earth. Do you really think the amount of wealth available to all those people is exactly the same as it was in, say, the 13th century? Even the working class these days live like royalty did back then.

Enron was one thing - they were faking it. But their stock became valuable because they fooled people into thinking they were actually creating wealth, like most corporations do much of the time. Much of the "value" in the stock market is actually people guessing about how much wealth will be created in the near future. When companies hide the fact that they themselves have made bad decisions and actually lost money, that hurts all their investors and stakeholders. So we need transparency, yes. SOX is the wrong mechanism for ensuring it, though.

Re:Absurdly obvious

[Brad Eleven]

Agreed. The problem is with the term "first to market." Its meaning relies on perspective. What is the market? Retail space on Best Buy shelves? Direct marketing via late night television ads and browser pop-ups?

I remember a story about a guy who thought of dunking banana slices in chocolate and mixing them with banana flavoured ice cream. He showed this to some food company, which turned him down and then marketed it themselves. Many other examples abound. Maybe Robert Kearn's story (he patented his intermittent windscreen wiper design before approaching Ford, then Chrysler) is a better context for the question: Who was first to market? The inventor who tried to market to the corporation, or the corporation that stole the idea and marketed it to genpop?

Even if the good guys win -- whomever the good guys are, for you, in this squabble -- regulatory agencies in these United States are crack whores, fellating the same corporations that the legislature has put in charge. The rules are for show. Gives a whole new meaning to money talks, bullshit walks when the regulations are widely known to be unenforced, even unenforceable.

That, by the way, is the definition of corruption, i.e., the opposite of integrity. Integrity is much more than some soporific ideal about what is right. It's about strength, and durability. What is the integrity of the chair you're sitting in right now?

Re:Absurdly obvious

[PastaLover]

Now if those little firms did not hold patents would the large companies just copy the little guy?

They might. But they are usually not very good at copying them, and even if they are it's almost always cheaper to buy out the little guy (unless his idea is trivial, in which case it shouldn't be patentable in the first place).

Not to mention that, as pointed out by others, big companies generally don't have to worry about little guy patents. Those little guys either violate one of their patents (pretty likely unless they are a patent troll) or need the big companies in one way or another (i.e. as distributor). The "patents protect the little guy" line isn't supported by the actual data.

American regulation.

[Anonymous Coward]

For some reason, America just doesn't understand how to do proper regulation. Every attempt at regulation ends up causing more problems than it manages to fix, or the lack of regulation ends up allowing horrid behavior to occur. But the problem isn't with regulation itself; many other Western nations manage to employ regulation very sensibly, and it ends up benefitting their societies as a whole.

Look at Prohibition. Look at the deregulation of the financial system. Look at the "War on Drugs". Look at the "War on Terror". Look at the deregulation of the oil industry. Will we soon be looking at software patents, as well?

Re:American regulation.

[burnin1965]

America just doesn't understand how to do proper regulation. Every attempt at regulation ends up causing more problems than it manages to fix, or the lack of regulation ends up allowing horrid behavior to occur.

Every now and again the United States does get it right.

Before the United States government forced aircraft manufacturers and patent holders into the Manufacturers Aircraft Association there was a patent war that resulted in lots of litigation in the United States but no aircraft manufacturing or innovation once the patent war started.

When a real war broke out, WW1, the United States had to buy aircraft from France because the United States business ventures were more interested in lawsuits than making aircraft.

After ending the patent war by forcing everyone into a patent pool the aircraft industry in the United States took off.

There are other similar cases that plainly show how the patent system has been a failure from the beginning in serving the Constitutional requirements. To promote the Progress of Science and useful Arts.

Re:American regulation.

[jgagnon]

Those individuals and groups need to patent their activities... ;)

Re:American regulation.

[Darkness404]

The deregulation of the financial system

When was there deregulation of the financial system?

The financial system was, and has been the most regulated of all industries. There was a -bit- of deregulation, but had there be full dereglation and few regulations to start with, you can bet almost anything that we wouldn't have had a crisis because all the banks making stupid decisions would have already been forced to close.

Re:American regulation.

[Anonymous Coward]

Campaign contributions - is at the root of all the other issues listed. Until campaign finance is reformed the elected (with a few rare exceptions) will be beholden to those with the deepest pockets instead of those who elect them.

Re:American regulation.

[burnin1965]

Depository Institutions Deregulation and Monetary Control Act of 1980
Say hello to risky and out of control lending

Garn-St. Germain Depository Institutions Act, 1982
Enjoy the savings and loan crisis

Financial Services Modernization Act of 1999 would do away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933
Welcome the age of "too big to fail"

Re:American regulation.

[Darkness404]

But had those things not been in place to begin with, sane fiscal policies would have been made by the banks because there would be no way they would be "bailed out". Had it not been for regulations, the banks would have failed before they became "too big to fail" thus eliminating the problem.

...and don't even get started with all the flaws in the Federal Reserve....

Re:American regulation.

[IMightB]

So you're saying that it's the fault of regulation that banks did not come up with a sane and sustainable business model? I almost want to way that you're blaming the victim, but the banks are definitely not the victim here.

I gather from the tone of your post that you're OK with de-regulation, but it almost sounds like you're arguing for more regulation.

Re:American regulation.

[Xtifr]

For some reason, America just doesn't understand how to do proper regulation. Every attempt at regulation ends up causing more problems than it manages to fix, or the lack of regulation ends up allowing horrid behavior to occur.

"Every attempt"? Nice rhetorical device, but I think you seriously underestimate how many regulations there are, and how many of them work reasonably well--not to mention how many things are unregulated without problem. The thing is that when regulation works well, it's almost unnoticeable, but when it fails, the results are often spectacularly obvious (as with your examples). This is the "man bites dog" effect: dogs frequently bite men, so that's not news, but the other way around is definitely news, so if you go just by the news, you'd conclude that men are more likely to bite dogs than the other way around.

For that matter, while I would tend to agree with you about other western nations, there are some notable exceptions. An obvious example is US vs. UK laws about libel and slander; in the US, truth is considered a defense, a proposition I find it hard to imagine that anyone could reject. Likewise, while copyright law is a general mess on both sides of the pond, I think "fair use" is a good example of something that the US got more right than most.

Re:American regulation.

[Znork]

We could solve todays patent problems in more or less the same way; stick all the patents in a pool, assign what you think is an appropriate incentive for the economy as a whole to pay for it all, and let the parties in the system divide the available capital fairly.

Patents and other IPR laws seem so enticing when their costs are hidden; one never points out that when they get their hundred billion incomes those hundreds of billions are taken from elsewhere. More reasonably, both their gathering and distributing ends should be within the government, just like any other taxation scheme.

Re:American regulation.

[burnin1965]

had those things not been in place to begin with, sane fiscal policies would have been made by the banks

There was this event in history commonly referred to as The Great Depression which was followed by many of the same regulations that were removed because prior to implementing these regulations there was a similar financial melt down in many cases caused by similar financial bubbles and out of control chicanery.

I find it to be more than a coincidence that the S&L crisis followed deregulation and the current financial melt down also followed deregulation.

And the fact that the regulations, like the Glass-Steagall Act of 1933, came after the Great Depression suggests your conclusion about the regulations causing the crisis are dead wrong. Hell, the deregulation is what created "To Big to Fail" not the enactment of regulations.

Re:American regulation.

[AthleteMusicianNerd]

How is it that no one is aware of the FED, Fractional Reserve Lending, a Monopoly on the money supply, the FDIC and Moral Hazard?

Re:American regulation.

[SteveFoerster]

The current meltdown also followed the example of the S&Ls being bailed out. When you don't expect to suffer the consequences of your irresponsible behavior, why bother be responsible?

Re:American regulation.

[Darkness404]

The Great Depression was caused mostly by A) Fractional Reserves Lending (something that makes no sense in a fully deregulated economy) B) The Fed creating money essentially out of nothing creating an unsustainable financial boom C) The WWI powers unable to repay debt.

Had it not been for the fed, chances are we wouldn't have had either the current financial crisis or the great depression.

Like I said in an earlier post, markets work under -complete- deregulation, you can't half regulate and half deregulate something and expect it to work. Capitalism, communism, socialism and fascism can all work when -always- held to, when you mix them you get a complete mess.

The problem wasn't the lack of regulations but rather the presence of some regulations and the relaxation of others. Either have it be fully regulated and have it work 90% of the time, or have it be unregulated and have it work 100% of the time. When you mix them, you get disaster. Always.

Re:American regulation.

[Anonymous Coward]

There is a commonly-held assumption - at least by pimply-faced 15-year-old "experts" - that the government has nothing better to do with its time than think up new regulations out of the air. Because Government is Bad, Regulations are Bad, and Taxes are Stealing.

Our government is much too busy talking with lobbyists, pocketing bribes and planning junkets to do that.

At one time everything was unregulated. However, enough people got hurt, scammed, or otherwise offended that they demanded that certain activities be regulated, even if if meant that they had to hire lobbyists to pay bribes in order to distract our government officials from their junket-planning. And sometimes even if it meant paying Taxes to hire enforcement officials.

It is, unfortunately, true that once you get rolling on a Good Thing, it's hard to stop, but we live in an age where a lot of times, letting one person go to Hell like they deserve would punish so many more-or-less innocent people that entire systems would collapse. Such as The Too Big To Fail effect, where if the fundamental faith in institutions is allowed to be undermined, even good investments will be impossible because you can never be 100% sure what's a good investment to begin with. Just ask Bernie Madoff's customers.

Re:American regulation.

[Teancum]

I don't think it is so much a lack of regulations, but rather a lack of trust in democratic concepts and institutions. If anything, an open and free market is based upon the assumption that ordinary folks, when left to make their own choices and given freedom to innovate and come up with solutions to problems that they face, will tend on the whole to make the best choices possible to fill those needs, wants, and desires.

The issue isn't one of regulation vs. deregulation, but rather freedom vs. tyranny. Every time a regulation is written, the question ought to be asked "does this allow ultimately for more or less freedom... and is it worth the price for this kind of restriction if we lose some precious freedom?"

From a long view of human history, the pattern has usually been that tyrants have come into political power in some form or another to take the freedoms from others... sometimes for "the public good" and sometimes just for raw acquisition of power. Often it is hard to determine which is which. If you don't have a government that is actively trying to squash that tyrannical behavior, it becomes more a part of the problem than the solution.

Regulations can exist within democratic institutions... indeed they are necessary for a well-organized society. The American Constitution in fact was written under such a philosophy... one of limited government but acknowledged that a government of some kind still had to exist. Business regulations was one of the first orders of business in the First American Congress (just after passage of the Bill of Rights), and the fight to ignore those regulations created the first real test of the power of the U.S. Federal Government (with the Whiskey Rebellion). Having George Washington put on his general's uniform again and personally lead the U.S. Army into battle sort of helped to kill the opposition (the only time a U.S. President has ever lead a field army into battle).

Regulations do make some sense, but they really ought to be simple to comprehend and certainly shouldn't require a full time accountant, lawyer, or a whole team of them to be able to simply comply with those regulations. When congressmen who pass legislation that significantly alters the regulatory landscape have not even read the legislation they are making into law much less even tried to comprehend the long term consequences to that legislation, is it a wonder that the rest of us trying to actually follow those laws start to complain?

Re:American regulation.

[Teancum]

The problem with a patent pool (see the MPEGLA for details on a current one) is the buy-in and cost to participate. These by their nature tend to be very monopolistic in nature and are also often rigged to drive out competition and certainly to set the barriers of entry for new start-ups from getting involved.

It is a real trick, too, in terms of trying to "divide the capital fairly". Organizations like ASCAP have been collecting money for years on behalf of individual song writers but almost without exception have never actually paid those royalties to anybody but the very largest organizations involved. In the end, it is the occasional and part-time innovator that gets screwed completely.

Of the three major "intellectual property law" branches, patents, copyright, and trademarks, I'd say patents are by far and away the most onerous in terms of the complications they provide to genuine market competition and the complete lack of protection "of the little guy" when somebody new to the system shows up. I've said repeatedly that patents are nothing more than a legal scam that screws over the private inventor and is just a way to part a fool from his money.... the fool in this case is the one who thinks that patents actually offer some sort of protection to their invention.

Repeatedly, as was mentioned with the aircraft industry and I should add the patent fight that Philo Farnsworth also had to go through in regards to the development of electronic television (he eventually won... but it literally took him a lifetime to collect and fight for credit that still is not properly given) there is very little productive that happens in regards to patents. If, as was done by both Philo Farnsworth and the Wright Brothers, you create your own factory and make your invention by putting some skin in the game.... there might be some value in terms of a defensive application of patents to keep competitors temporarily from completely copying your ideas. You will never make millions by coming up with a unique product, patenting the thing, and then trying to "sell" the invention to somebody else.

This will most certainly get more interesting...

[jgagnon]

As time goes on. Ultimately, I'm hoping that software patents go away completely, since there is no clean way to define anything code a computer executes in a tangible way like actual physical products. If they survive in some form we will, eventually, end up with a completely unenforceable mess of lawyer bait (yes, worse than it is already).

Obligatory link

[Lonewolf666]

"Against intellectual monopoly" by Boldrin and Levine:
http://levine.sscnet.ucla.edu/general/intellectual/againstnew.htm

This book nicely sums up the arguments against patents :-)

stop misusing "refute"

[Voline]

when you mean "contradict". To refute something means to disprove it. That's an important distinction.

Re:stop misusing "refute"

[Just Some Guy]

To refute something means to disprove it.

From TFS:

The patent lawyers and big patent holders often tell us that patents are needed to secure investment, so it's interesting to see now that venture capitalists are refuting that.

A venture capitalist said that patents are not needed to secure investment. That pretty damn well refutes the idea that venture capitalists won't invest without patents.

Re:stop misusing "refute"

[Just Some Guy]

The VCs dispute that patents are needed to secure investment.

I got the point, but he was wrong. The VCs are the people who do the investing. If they say they'll still invest even without patent protections, then the premise that VCs won't invest without patent protections has been refuted.

Re:stop misusing "refute"

[e2d2]

Refute can also means to argue against the truth or correctness of something, not always proving it's erroneous. In other words, like most English words it has multiple meanings. I do see your point though. It's a strong word.

Re:stop misusing "refute"

[neural.disruption]

Have you ever heard of proofs by contradiction? Or more importantly counter examples?

For something better rephrased (for the sake of logical analysis) as "All venture capitalists would not invest if it wasn't for software patents" you only need a venture capitalist saying the opposite, in fact you have a whole bunch of them saying that.

You can say it isn't significant because "Most VCs would not invest..." but thats not the issue there, and I suspect that a well made statistical analysis would indicate a strong correlation between being a VC and believing in the uselessness of software patents.

oh my....

[gandhi_2]

I am no fan of Michael Moore (well, i liked TV Nation)...but these dudes could learn a lot from his style of instigation-based film-making.

I watched the video all the way to the end....it only resonates with me cause i already agree with it. It's a film for the echo chamber. But it will fail to convince anyone in the middle...

Re:oh my....

[Attila Dimedici]

am no fan of Michael Moore (well, i liked TV Nation)...but these dudes could learn a lot from his style of instigation-based film-making.

So, your saying they should make things up and edit the video to make it look like the other side says things they've never said?

Re:oh my....

[TheRaven64]

these dudes could learn a lot from his style of instigation-based film-making

Seriously? I always assumed Michael Moore was a right-wing fifth columnist. He manages to present things in such a way that if he said 'the sky is blue' I'd want to contradict him.

Re:oh my....

[DeadDecoy]

From my impression, Michael Moore is a satirical journalist with leftish leanings (really left if you're in the US). One of his first films in Flint Michigan, illustrated the economic devastation that occurred when a car manufacturer outsourced to Mexico; i.e. an entire city crumbled due to greedy capitalism. Bowling for columbine emphasized poor parentage and our irresponsibility to manage firearms, even though we are highly vocal about gun rights. Fahrenheit 9/11 was a big bash fest on the Bush administration and Iraq war. (Those are the ones I've seen). A lot of his views are liberal, or more so against the right winged perspective. I imagine a lot of people also don't like him because he comes off presenting his point of view as the Truth and he does some pretty rude things to get the shots he needs. In regards to this and the GP, Moore can be effective in assembling events to present a solid argument in his favor.

Re:oh my....

[phantomfive]

I watched the video all the way to the end....it only resonates with me cause i already agree with it. It's a film for the echo chamber. But it will fail to convince anyone in the middle...

To be fair, this also seems to be an accurate description of Michael Moore movies.

Re:oh my....

[gandhi_2]

Ok, this is fair. But I'm sure you'd agree, Mr. Moore's style is much more compelling, at least compared to Patent Absurdity.

Also: venture investors of eBay, Twitter, Skype

[FlorianMueller]

In 2005, venture capital investors who had backed (among others) eBay and Skype - and meanwhile also Twitter - supported my last-minute lobbying effort in the European Parliament against the EU software patent directive. The related press release mentioning Benchmark Capital (eBay, and more recently Twitter) and Danny Rimer of Index Ventures (Skype) is still online on the MySQL website although Oracle and Sun certainly do favor software patents. Guess they forgot to delete it. Other references to MySQL's position on software patents disappeared after Sun bought the company in 2008.

Those venture investors had previously supported an open letter to EU decision-makers warning against the possible consequences of an adoption of the proposed bill (which ultmately got thrown out, fortunately).

However, I also got turned down by many venture investors whom I asked to support such initiatives against software patents. I don't think the resistance movement is strong enough in economic and political terms to achieve the abolition of software patents anytime soon. I regret to say so but the hurdle is high and politicians won't be convinced if it's basically just the Free and Open Source Software movement that takes political action against software patents. A few venture capitalists won't tilt the scales either. There would have to be broadbased support. In Europe, the leading venture capital organization (EVCA) actually lobbied for the legislative proposal we fought against. I guess the major American venture capital associations would take similar positions.

In the near to mid term, I believe the Defensive Patent License (DPL) could have a very positive effect.

Software patents will be irrelevant... somehow

[Alwin Henseler]

My hope is that software patents will be made irrelevant one way or the other... by those countries that don't implement them.

In effect, it's trying to force a (IMHO: ridiculous) concept onto the rest of the world. Some countries may go along with that, and patent holders (& lawyers!) will profit. But other countries may not, and will be able to do things that would require lots of red tape elsewhere. And thus: be more competitive by ignoring software patents.

Any type of 'intellectual property' is only a profitable starter if you can get others to go along. But the more you push things into the realm of ridiculous, the fewer people/countries actually will. And when that happens, you have the red tape slowing you down, they don't.

Copyrights may have a place, patents may have their place (I'm not so sure about either), but patents on pure software constructs are totally uncalled for. The sooner they're abandoned, the better.

Re:Software patents will be irrelevant... somehow

[bersl2]

And what if the US keeps software patents and then forces it on the world or a significant part thereof a la TRIPS?

Re:Software patents will be irrelevant... somehow

[Pinky's Brain]

The German court used TRIPS in their argument for why software patents should be legal BTW.

Tax it

[wheeda]

Let patent owners state a value for their IP. Let them be taxed at a certain percent, say 1% per year. Allow anyone to buy the IP into the public domain for the stated price. Ideally this idea would be applied to both patents and copyright. I claim this idea as my own. I had it while taking a shower about eight years ago. Please make use of it.

Re:Tax it

[melikamp]

Aside from narrowly conceived examples where the state is low-tech and a given patent law improves the inflow of inventors and craftsmen from abroad, the public does not benefit from any kind of patent. The monopolies on the best ideas are just a tax on everyone besides the patent holders, and they do absolutely nothing good in the Internet society, where the rate of innovation is capped only by our ability to find and comprehend thousands of great new ideas arising naturally every day. This is true for software most of all, as most professional programmers know. But it is also true for other products, even as expensive-to-develop as pharmaceuticals. One glance at the costs of marketing drugs in US should be enough to convince everyone that the research would be a lot cheaper if we simply paid for it in advance, from taxes; as a bonus, the competition in manufacturing will fierce and the life-saving drugs will be available to everyone in the freaking world at the same low price. Holding on to the patents is very expensive and in most cases immoral.

Re:Tax it

[AK Marc]

Aside from narrowly conceived examples where the state is low-tech and a given patent law improves the inflow of inventors and craftsmen from abroad, the public does not benefit from any kind of patent.

Patents were only supposed to be given for novel and new ideas. That is, something that other people, if given the problem, wouldn't have come up with. If they were applied as intended, I would greatly disagree with you. Let's say you sold cars. And you invented the Wankel engine. And this new engine, unlike anything else and no one even thought about it, has two fates. Either you try to make a product around it, with the momentum from being first propelling you to the top of the market, or you patent it, tell everyone how it works, share it with the world in all its glory, then put it in a product, or sell the idea, or make them for someone else. If you can't patent it, you are much more likely to hold on to the idea and never tell anyone about it. Patents increase the total sum of knowledge of the human race by requiring full disclosure.

Now, the current system, where patents are given for anything the patent officer doesn't understand, where lies on the application or omitting known prior art and such aren't punished, then yes, a complete abolition of patents is a much better system.

But re-define "novel" and "non-obvious" back to the originals, and you'll have a system that's great. There will be 1/10th the patents or less, and they will be more important. Oh, and I'd punish lying on a patent application to result in revocation of all prior patents to that person and their employer. Yes, that's harsh, and I can see people arguing against it. So I won't say it's "best" but that it's how I'd do it.

Re:Tax it

[noidentity]

Let patent owners state a value for their IP. Let them be taxed at a certain percent, say 1% per year. [...] I claim this idea as my own. I had it while taking a shower about eight years ago. Please make use of it.

Oh, we will; we will. What value does this have? Sounds like it has a lot. If you pay back taxes on this unreported property you've had for eight years, within 90 days, there will be no interest.

- The IRS

Re:Tax it

[melikamp]

If you can't patent it, you are much more likely to hold on to the idea and never tell anyone about it.

The history, both recent and not so much, shows that just the opposite is true. As soon as one patents something truly novel and irreplaceable, one freezes the idea and sits on it for 40 years, all the while not letting anyone else to improve on it. Why would a patent holder do anything else? With a monopoly on something like a steam engine or a life-saving drug, one is set for life without a need to innovate any more, and one MUST prevent other people innovating as well, on pain of having to compete with a superior product. This is the story of Watt's engine (him and Boulton basically set back the innovation by 40 years by suing everyone in sight), and of many a modern drug.

Re:Tax it

[JesseMcDonald]

The GP is giving away the idea for free, so the "stated value" would be zero and there would be no tax. That's the whole point: the harder you make it for the public to purchase the IP into the public domain, the more you pay each year in IP taxes.

Re:Tax it

[fishexe]

I claim this idea as my own. I had it while taking a shower about eight years ago. Please make use of it.

Yeah, right. And let you retro-patent your method and sue our asses off? No thanks.

Re:Tax it

[wheeda]

I generally agree that getting rid of most patents, and redoing copyright law would be a good idea. Good luck with that. Getting government to raise taxes should be pretty easy though.

Goose/Gander/Repeat

[blair1q]

So, after they succeed in getting all software patents nullified, I hope they'll willingly give up copyright on the software they're creating using all that free IP. Otherwise their argument boils down to "I don't want anyone to steal my intellectual property, I'm just not smart enough to come up with anything truly innovative."

Bad assumption

[Benfea]

Patents don't mean diddlysquat anyway if you're a small start up going up against the big dogs. They will simply steal your idea anyway, then if you try to sue them, they will keep the case tied up in court long enough for the legal costs to drive you out of business. The only patents that are worth squat if you're an individual or a small business is a chemical patent, because a chemical either is or isn't a particular chemical, and no amount of fancy lawyerspeak will ever manage to obfuscate that fact.

The problem with software patents is that large corporations can patent things that are obvious or that everyone is already doing anyway, then use complex legal cases to drive their competitors out of business.

Re:Bad assumption

[Jah-Wren Ryel]

They will simply steal your idea anyway, then if you try to sue them, they will keep the case tied up in court long enough for the legal costs to drive you out of business.

I know a guy (well, my niece is dating him, although I wish she wouldn't) who is a real asshole. He's made millions of dollars by taking some poor schmuck's copyrighted and/or trademarked designs & artwork and putting them on the clothes he sells. He knows what he's doing, he even brags about it. The way he's made so much money at it is that by the time the owner of a design is able to sue him and the court system finally rolls around to awarding the poor schmuck the damages, this asshole has raked in way more money than he has to pay out in damages. He'll then just turn around with a new shell company and do the same thing to some other schmuck.

The guy is in his 40s but he has a set of ethics, and general social behavior level, of a frat-boy. I see him as a paragon of modern corporate management in America today.

So, I can personally attest that what you describe happens with copyrights and trademarks, it should be no surprise it happens with patents too. Since I believe we will never rid the world of assholes like that guy, I think the only solution is to stop promoting systems that enable them in the first place.

Re:Bad assumption

[Anonymous Coward]

Or start outing the assholes that drive companies that do this. Why help hide his behavior? What company is it so we can research and boycott/class action this kind of behavior into extinction?

Re:Bad assumption

[Jah-Wren Ryel]

Or start outing the assholes that drive companies that do this. Why help hide his behavior? What company is it so we can research and boycott/class action this kind of behavior into extinction?

I dunno, never bothered to find out.
He'll just shut it down and open a new one in a year or two anyway.

Re:Bad assumption

[Anonymous Coward]

Punch him.

He deserves it.

Re:Bad assumption

[zaffir]

Christian Audigier? Or however that's spelled?

Re:Bad assumption

[Jah-Wren Ryel]

No. Definitely not named Christian.

The problem with regulation...

[Benfea]

...is that the regulation is generally written by the very industries whose behavior the legislation is supposed to curtail. This is a consequence of our corrupt campaign financing system in which large corporations have more say than voters in what our government does. If you don't believe me, just look at how the supposedly-socialist Obama administration is using government resources to prevent reporters from taking photographs of wildlife injured by the oil spill. This serves no purpose other than to help BP manage their PR crisis, and certainly isn't in the best interest of the public.

Re:The problem with regulation...

[burnin1965]

large corporations have more say than voters in what our government does

And to add some previous insult to injury we have the recent "Health Care Reform" bill that addresses the out of control cost of health care insurance premiums by forcing every United States citizen into paying those same premiums to the same corporations or end up paying a fine on their annual taxes.

And then there is the 2003 Medicare Modernization act with the "competition" clause that prevents the Medicare plan coordinator from getting involved in price negotiations for pharmaceuticals. Instead the costs are determined by the insurance carrier, manufacturer and the pharmacy. I'm sure many were paid very well for that piece of legislation which is comparable to having a car manufacturer, the dealership and the bank determine how much you will pay for a new car rather than haggling on the price yourself. I guess the passage of such an obvious corporate paid for bill explains why 14 congressional aides quit their jobs to work for the drug and medical lobbies immediately after the bill's passage, after all, there job was done.

"Judicial Activism"?

[Theaetetus]

From the description of the film...

Patent Absurdity explores the case of software patents and the history of judicial activism that led to their rise, and the harm being done to software developers and the wider economy

Call it a fallacy, but using that term automatically destroys a significant amount of your credibility. Particularly when you use it incorrectly. It does not mean, "any judicial decision which I dislike." Judicial activism is when a judge writes new law... For example, if a judge were to look at 35 USC 101, which says that patentable subject material includes "any new and useful process, machine, manufacture, or composition of matter" and pretend that software is not a process, or that "process" doesn't include software, that would be judicial activism.

In fact, technically, the rule that everyone who's against software patents points to for why software should not be patentable - no patenting abstract algorithms - was a judicial decision writing a new limitation into the law, and was therefore "judicial activism". But we don't call it that, because we like that decision.

Re:"Judicial Activism"?

[burnin1965]

if a judge were to look at 35 USC 101, which says that patentable subject material includes "any new and useful process, machine, manufacture, or composition of matter" and pretend that software is not a process, or that "process" doesn't include software, that would be judicial activism.

I think I understand and in part agree with your logic, however, your conclusion is wrong for two reasons. First there had to be a starting point where software was considered by the courts for patent-ability. Since there was no precedence the conclusions by the court were not activism as the courts were not trying to bring about change. And second, in reading some of the early cases that concerned software patents and the conclusions it becomes readily obvious that the decisions were in fact based on previous case law and 35 USC 100 through 35 USC 104. It was in no way judicial activism.

In the case Diamond_v_Diehr where the tide turned and lawyers started to find ways of patenting software it may very well be judicial activism and there was a very strong and well reasoned dissenting opinion. I cannot say without a doubt that it is judicial activism as that type of conclusion would require more research to understand how the the justice's came to their conclusions that seemed to change several years and cases of precedence. I will only say it is a possibility and that I believe the dissenting opinion was correct in pointing out the flaws and errors in the majority opinion.

Re:"Judicial Activism"?

[b4dc0d3r]

Your argument is a fallacy, because you're assuming that whoever wrote that would approve if the decision went in their favor. That might be a natural assumption to make, but there are a lot of people who believe that no decision is proper, no matter how favorable it is, if it extends the law further than the wording of the law. In that interpretation, there is no fallacy in the description. The term is heavily overloaded, but for someone who is against *any* sort of "legislating from the bench" it might seem a natural, if not completely obvious description of exactly what happened.

Now, whether it actually happened is another story. I think burnin1965 has a good start on the history of patents as it relates to software, but I can't say if there's something I missed.

Now, in this context the burden would be on you to show that, absent some additional information, the person using the term is being selective in their usage. Your objection seems to be based on most people using it improperly, not on the specifics here, so you're the one with unsubstantiated claims. There are plenty of people who accept no judicial activism as legitimate, and they would take exception to your claims. In general I agree with you but in this case I see no support for your observation.

Re:"Judicial Activism"?

[Theaetetus]

if a judge were to look at 35 USC 101, which says that patentable subject material includes "any new and useful process, machine, manufacture, or composition of matter" and pretend that software is not a process, or that "process" doesn't include software, that would be judicial activism.

I think I understand and in part agree with your logic, however, your conclusion is wrong for two reasons. First there had to be a starting point where software was considered by the courts for patent-ability. Since there was no precedence the conclusions by the court were not activism as the courts were not trying to bring about change. And second, in reading some of the early cases that concerned software patents and the conclusions it becomes readily obvious that the decisions were in fact based on previous case law and 35 USC 100 through 35 USC 104. It was in no way judicial activism.

Yes, that's my point... It would be judicial activism to start carving out non-patentable subject matter from the list of process/manufacture/machine/matter, since the statute says nothing about "oh, and algorithms aren't patentable." Therefore, when SCOTUS said that, they were being activist. But we don't call it that, because it was the right decision.

In the case Diamond_v_Diehr where the tide turned and lawyers started to find ways of patenting software it may very well be judicial activism and there was a very strong and well reasoned dissenting opinion.

Not strong enough, or it would have been a majority opinion.

I cannot say without a doubt that it is judicial activism as that type of conclusion would require more research to understand how the the justice's came to their conclusions that seemed to change several years and cases of precedence. I will only say it is a possibility and that I believe the dissenting opinion was correct in pointing out the flaws and errors in the majority opinion.

Bear in mind that the most neutral definition of "judicial activism" is a judicial opinion that goes against the will or intent of the legislators who wrote the statute. It's the judges rewriting what the legislators did.
Given that broad and neutral definition, consider... Diamond v. Diehr was almost 30 years ago, and in that time, Congress has not amended 35 USC 101 to exempt software, in spite of the fact that they've amended 35 USC several times to comply with TRIPS and other treaties. So, Congress has essentially said "35 USC 101 is correct as it is currently written and interpreted." So, if the Supreme Court were to suddenly claim that software isn't patentable would be going against the past 30 years of legislative history. That would be judicial activism.

Re:"Judicial Activism"?

[JesseMcDonald]

But software isn't a process. At most it is a description of a process, one which is only carried out when the software is actually executed. However, what exactly is a "process" for the purpose of patent law? The definition in 35 USC is infuriatingly circular:

The term "process" means process, art, or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.

In the absence of any guidance whatsoever regarding the intended meaning of "process", the following definition entered into case law by the USSC should not be considered judicial activism, but rather merely a clarification of existing law:

A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing. -- Gottschalk v. Benson, 409 U.S. 63, 70 (1972)

The kinds of processes software may describe clearly do not meet this definition per se. Their inputs and output are not materials to be transformed, but rather pure information. How this information is represented in material terms is part of the prior art (the computer), not the software. The USSC has consistently ruled (Gottschalk v. Benson, Parker v. Flook, Diamond v. Diehr) that pure software is not patentable subject matter, although a machine which includes a software element is not rendered unpatentable by that fact provided that the device as a whole fulfills the other requirements. (The case in question in Diamond v. Diehr involved a physical process, the curing of synthetic rubber, performed by a machine under software control. The court's opinion was clear: the software itself was not patentable by itself, but the overall physical process was.)

Other than In re Bilski, which didn't specifically address software patents, the USSC has not made any recent rulings on patentable subject matter. However, the only position consistent with the case law cited above would be that pure software, or the simple combination of software and existing prior art (i.e. a computer), cannot be patentable as such. This would show most existing software patents to be invalid.

NOTE: I am not a lawyer, this is not legal advice, etc. It would be unreasonable to assume otherwise.

Re:"Judicial Activism"?

[JesseMcDonald]

Diamond v. Diehr didn't state that software was patentable, in any sense. It stated that:

While a mathematical formula, like a law of nature, cannot be the subject of a patent, cf. Gottschalk v. Benson, 409 U.S. 63; Parker v. Flook, 437 U.S. 584, respondents do not seek to patent a mathematical formula, but instead seek protection for a process of curing synthetic rubber. Although their process employs a well-known mathematical equation, they do not seek to pre-empt the use of that equation, except in conjunction with all of the other steps in their claimed process. A claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program, or digital computer. [emphasis added]

So software was confirmed to be unpatentable by itself, but--as one would expect--inclusion of a software component is not enough to render an otherwise patentable physical process unpatentable. To qualify for a patent one must claim more than just software and prior art (e.g. a computer). Most existing software patents would not meet this standard.

So, if the Supreme Court were to suddenly claim that software isn't patentable would be going against the past 30 years of legislative history.

On the contrary, it would be affirming the past 30 years of legislative and judicial history. Software per se has never been ruled patentable by the Supreme Court, so there would be nothing "sudden" about it. And by your own logic that means that, by not rewriting the statute to include software, Congress has demonstrated its agreement that software is not meant to be considered patentable subject.

NOTE: I am not a lawyer, this is not legal advice, etc. It would be unreasonable to assume otherwise.

Stop misusing "disprove"

[0xdeadbeef]

when you mean "present evidence against" an argument. To disprove something means that you demonstrate that it contradicts axioms or established truths.

Don't think about this!

[e2d2]

Don't think about this topic at all! You may be exposing yourself to risk. As your counsel I advise you to not question me on these matters because that may expose you to even greater risk!

Re:Don't think about this!

[fishexe]

Don't think about this topic at all! You may be exposing yourself to risk. As your counsel I advise you to not question me on these matters because that may expose you to even greater risk!

Too late. You already violated the patent on counsel advising clients not to think.

These Venture Capitalists get it wrong

[AnyPerson]

The Slashdot article's Venture Capitalists seem to forget that software patents protect small players more than big plays due to: "... entrepreneurs and small, innovative firms rely more heavily upon the patent system than larger enterprises. Larger companies are said to possess alternative means for achieving a proprietary or property-like interest in a particular technology. For example, trade secrecy, ready access to markets, trademark rights, speed of development, and consumer goodwill may to some degree act as substitutes to the patent system. However, individual inventors and small firms often do not have these mechanisms at their disposal” and “small patenting firms produce 13-14 times more patents per employee as large patenting firms” http://bit.ly/aSnz61

Re:These Venture Capitalists get it wrong

[turbidostato]

"The Slashdot article's Venture Capitalists seem to forget that software patents protect small players more than big plays"

It's only that, no, they don't forget it and no, it doesn't protect small players more that big ones.

"For example, trade secrecy, ready access to markets, trademark rights, speed of development, and consumer goodwill may to some degree act as substitutes to the patent system. However, individual inventors and small firms often do not have these mechanisms at their disposal"

It's only that small companies have an easier time going bellow the radar, being agile, faster at both development and market timely than big ones.

*Huge* Difference Between Copyright & Patents

[weston]

So, after they succeed in getting all software patents nullified, I hope they'll willingly give up copyright on the software they're creating using all that free IP.

A copyright is a significantly and fundamentally different thing than a patent. Patents can conceivably cover any implementation of an invention. Copyrights apply only to the particular fixed expression of an invention or creative work. There's no inconsistency to simultaneously holding objections to wholesale appropriation and accepting multiple re-implementation of a given concept.

Otherwise their argument boils down to "I don't want anyone to steal my intellectual property, I'm just not smart enough to come up with anything truly innovative."

Or, more likely, they think it's more valuable to investors to safeguard implementations/applications of a given idea than the idea in abstract.

Patents only prevent product development.

[zQuo]

This is so true! According to "Innovation for Dummies" book, a patent only grants the right to forbid others to make a product. Patents do not give you any right to make anything. This is a very important distinction. A patent is the ability to deny others, not the ability to make something.

If you build a better airplane, you can patent all the innovative features (and not so innovative ones) as much as you like... and then you probably still can't make the plane... because there will be other patents or IP that your innovative airplane incorporates. If you can't get all the patent holders to agree to let you make the airplane, then you cannot make a product. The only way to make money off of your patent is to further deny others the ability to use the idea until they pay.

The notion of counting the patents issued in a country to measure "innovation" is terrible. It really means the opposite; that progress is actually slower in that country the more patents are issued. It doesn't mean that the whole idea of patents are bad, but each patent already issued slows future product development for the country as a whole . Given the societal costs of an issued patent, we really should put the bar higher, and grant patents only for really great innovations. Each current issued patent is like a grit of sand gumming up new product development... so each patent issued, if any, had better be worth quite a bit.

Re:Patents only prevent product development.

[chthon]

I think that in every dispute about patents, a reference to 'The Iron Standard' from Henry Kuttner should be included.

Re:This will most certainly get more interesting..

[TheRaven64]

Unfortunately the dividing line between software and 'actual physical products' is becoming increasingly vague. Pretty much any nontrivial machine now has a microprocessor (or several). Currently, in (most of) the EU we have the ludicrous situation that you can write an implementation of an algorithm in C and not infringe any patents, then implement the same algorithm in VHDL and infringe a parent. Given that there are now compilers that can take C code and generate ASICs that implement the algorithm, you find that the mere act of compiling is what takes you from not-infringing to infringing - running does not.

Focussing to much on software patents hide the fact that the entire patent system has serious problems. Software patents aren't the problem, they just highlight the problems of the system as a whole.

Re:Stop patenting seeds first

[burnin1965]

And organisms. Don't patent life, plants, seeds, living things, etc. AFTER *that* nonsense is stopped, and monsanto gets what's coming to 'em

Monsanto may get their dues before life patents are outlawed. When the rise of superweeds wipes out the Monsanto engineered crops there may be little choice but to fire up Soylent Green and I'm sure there will be more than a few ready to offer Monsanto's board as the first Soylent offering.

Re:*Huge* Difference Between Copyright & Paten

[blair1q]

Well, sort of but not really.

When you patent something you have the right to license it to be sold by someone else. How it gets implemented is not relevant.

Ditto for copyright. It gives you the right to license it to be sold by someone else. How they implement it is not relevant.

You could argue that ideas are different from linguistic expressions, but no, they aren't. Linguistic exprssions are just a form we cast ideas into.

The law doesn't work this way because lawyers are pettifiggery experts, so they have the law all bollixed up in differences that don't really exist.

Which was my point. If you eliminate patents, you might as well blow away copyrights, because you're either saying that intellectual property shouldn't exist, or you're trying to get one kind of intellectual property protection removed so that you can take the property and change the cover and sell it yourself and claim it's protected for you.

Simple exemple, why patents are stupid.

[orogorhotmail.com]

At first patents seems like a good idea, you do research, you don't want to get it stolen, you patent it to protect yourself and make sure you get some revenue from this in case somone want to use your idea. Now imagine i need to go from one side of my house to the other one, i find the shortest path, great. Then i learn that somehow another person has the same house, also had the same problem than me and patented this path thought his house. Would it seems even fair that because someone patented this path you couldn't use it anymore (without paying), after all you found it by yourself and didn't stole his idea, it just happen that for the same problem that many person may have there can be a single best solution. IT stuff is just about the same