A Generation of Software Patents Examined

pieterh writes "Boston University's James Bessen has published a landmark study [abstract; full paper available at the link, free of charge] on a generation of software patents. Looking at almost 20 years of software patents, he finds 'that most software firms still do not patent, most software patents are obtained by a few large firms in the software industry or in other industries, and the risk of litigation from software patents continues to increase dramatically. Given these findings, it is hard to conclude that software patents have provided a net social benefit in the software industry.' Not that this surprises anyone actually innovating in software."

Comments

Oh Patents

[Morphine007]

They're definitely a contributing factor as to why I'm still in academia, rather than trying to start a software shop with my CS degrees.

Re:Oh Patents

[Morphine007]

I guess I should say "Oh Patent trolls" and not just "Oh Patents"

Re:Oh Patents

[jellomizer]

Really is that really a big issue? For most firms it is small... Really small issue. The trolls and the big guys won't even notice you until you make it big, then you can usually work out some deal so you don't loose your shirt. Perhaps you should leave Academia for a while and see how the rest of the world works, consider it a Sabbatical. In actually the For Profit industry isn't as bad as it seems.

Re:Oh Patents

[Anonymous Coward]

The current case of LodSys (Google it or search on SlashDot) suing small iOS app developers and individuals is one example that little people can get in big trouble because of software patents.

Re:Oh Patents

[Morphine007]

Exactly.

Right now, the most attractive market (or means of distribution) for a "software tycoon in training" is the smartphone market (specifically Android and iPhone, since their distribution methods have the lowest overhead for the actual software authors).

The LodSys bullshit has definitely left me feeling a little gun-shy...

Re:Oh Patents

[Batmunk2000]

I agree. This is an issue with a lot of hype and no bite. From what I have seen, patent lawyers have stirred up this pot to make some coin from large companies. Sure there have been some high-profile lawsuits, but it's hardly an epidemic nor is it shutting out innovation. The lawsuits I have been involved in or witness to - common sense has prevailed or, *gasp*, would-be borderline tech wasn't pursued and actual original solutions were implemented instead of copycat BS! If the industry should be outraged or annoyed at anything... it should be the stupid lawyers. Don't get them involved!

Re:Oh Patents

[Anonymous Coward]

yes it is.

Re:Oh Patents

[mellon]

You know, when I see a 700 million dollar settlement over a garbage patent that was later overturned, and I think about how that would have affected me as a small software developer, what I do *not* think is "all hype and no bite." What I think is "I could lose my house." And so I work for a corporation, so that if/when that corporation gets sued out of existence, I will be on the far side of the firewall, and all I will lose is my job.

People who say this is a small issue that won't effect them either aren't software developers, or are whistling past the graveyard.

Re:Oh Patents

[terminalhype]

"Perhaps you should leave Academia for a while and see how the rest of the world works, consider it a Sabbatical. In actually the For Profit industry isn't as bad as it seems."

Or..."Come into my parlor" said the spider to the fly.

Re:Oh Patents

[mooingyak]

You know, when I see a 700 million dollar settlement over a garbage patent that was later overturned, and I think about how that would have affected me as a small software developer, what I do *not* think is "all hype and no bite." What I think is "I could lose my house." And so I work for a corporation

You can start your own corporation. You have to keep your personal assets and corporate assets distinct from one another and some other fun accounting headaces, but it serves as the exact protection it sounds like you want.

Re:Oh Patents

[Anonymous Coward]

Actually the problem is when you're starting to get big. Being small isn't an issue and being huge isn't an issue it's the in between when they kill you and force you to sell your ideas to someone who can afford to defend against the lawyers. If you explode onto the scene alla Facebook then no worries because there isn't time for the slow moving legal system to get you and by the time they get there you're 100% right you can work something out.

Most firms aren't like Facebook however and experience a more linear growth for years before every become explosively big (if they ever do). These are the guys who patents kill. Innovation doesn't just happen in the wildly explosive successes. It also happens in the slowly grown firms and sometimes that is the foundational work that allows for future explosive successes. Software patents are definitely a deterrent for the normal growth profile of a firm. If you happen to get lucky and not need the linear growth period the good on you but for the rest of us being sued into stagnancy while trying to succeed is painful.

Re:Oh Patents

[Morphine007]

Again, the LodSys example mentioned by an AC just a few posts up flies in the face of the "it only matters if you become successful" argument. Sadly... =(

Re:Oh Patents

[brainzach]

The biggest obstacle of breaking into the app market is creating a quality app and marketing it so people will buy it.

The Lodsys patents are completely unfair and we don't like being taken advantage of, but the amount of money they are asking for is less than 0.5%. It won't stop anyone from implementing their killer idea to make money.

Re:Oh Patents

[Oxford_Comma_Lover]

You know, when I see a 700 million dollar settlement over a garbage patent that was later overturned, and I think about how that would have affected me as a small software developer, what I do *not* think is "all hype and no bite." What I think is "I could lose my house." And so I work for a corporation

You can start your own corporation. You have to keep your personal assets and corporate assets distinct from one another and some other fun accounting headaces, but it serves as the exact protection it sounds like you want.

Which is why we keep the lawyers. Risk management.

Re:Oh Patents

[mellon]

Actually no, you can't start your own corporation. I mean, you can, but it won't protect your personal assets if the person suing you can show that the corporation exists only to serve as a firewall. If the corporation is a real company that employs real people, that's a different story, but if it's just a shell, it's of very limited value. The only lawsuit it will protect you from is one where the additional cost of making the case that the corporate veil should be pierced is prohibitive. That's not the sort of situation that you'd be in if a patent troll came after you and you had significant assets.

Think about how it looks to a court: you make a corporation, and the corporation makes a bunch of money, infringing some patent in the process. All of that money is paid out to you, or else goes to pay the minimal expenses that are involved in operating a corporation of this type. And then when someone comes after the corporation to be made whole as a result of the patent infringement, there's no money, because it's all been drained into one bank account: yours. Making the case to pierce the corporate veil here is a slam-dunk.

Re:Oh Patents

[Teancum]

Actually no, you can't start your own corporation. I mean, you can, but it won't protect your personal assets if the person suing you can show that the corporation exists only to serve as a firewall. If the corporation is a real company that employs real people, that's a different story, but if it's just a shell, it's of very limited value.

Even being a real company isn't going to protect you if you are a principle shareholder and member of the board of directors/VP or CEO. You can personally be sued for damages if that is the case. As a middle manager or mere peon, yes it can protect you. As a minority shareholder you are likely going to be protected as well (particularly if you weren't involved in any decision making that led to patent infringement).

But if you actually own the company, forget it. Your assets are as good as gone if you lose the legal challenge. Your only benefit by being a part of a corporation is the access to resources where potentially your business partners might have a reason to defend you and that you may be able to pay for a lawyer to represent you in court. That gives little comfort. Potentially if you lose you could also be the target of a shareholder lawsuit to really make life lovely, particularly if you violated the company charter in some way (subject to interpretation by a judge and jury).

The limited liability mainly applies to minority shareholders. Those from large corporations can often get away with murder (or at least seem to) but that is mainly because they also have politicians in their pocket to write the laws to keep them from jail or have enough competent lawyers to warn them well before they get close to danger. Money talks real well, which is where the legal system is truly different for a corporation than a private individual... because a corporation has access to more wealth alone.

Re:Oh Patents

[The Dawn Of Time]

Yeah, and sometimes people get murdered on the street. Doesn't mean you can't leave your house, or that all of society is fucked.

But I get it - I should demand everything for free, because... I don't get that part, but fuck it. I should demand everything for free.

Re:Oh Patents

[The Dawn Of Time]

Yeah, one example in an economy so big no one person can even comprehend how to comprehend it. OH NO THE SKY IS FALLING.

Re:Oh Patents

[tehcyder]

They're definitely a contributing factor as to why I'm still in academia, rather than trying to start a software shop with my CS degrees.

Yes, because no one else is able to open a "software shop", anywhere, so you might as well just give up.

For "contributing factor" read "limp, largely theoretical excuse".

Re:Oh Patents

[tehcyder]

As a minority shareholder you are likely going to be protected as well

As a shareholder of any size, your liability is limited to the nominal value of your shares. That is the whole point of having limited liability companies.

Re:Oh Patents

[Teancum]

Not quite. You can have liability that goes beyond the value of your shares if you are a member of the board of directors or are one of the major officers of the company.

BTW, that is why they get the big bucks too, as they do take that personal risk when running a company. If any criminal conduct was happening while you were running the company, that can even compound the situation even further, and shareholder lawsuits can really ruin your day if you aren't careful, where your personal assets can be at risk when you are in such a leadership position.

That is also why it is a stupid idea to set up a "personal" corporation just to cover your behind as you are still just as much at risk. At best all it provides is a speed bump for somebody trying to go after you if for some reason you have some financial liability. It is also part of the fiduciary responsibility of a company CEO to make sure that kind of liability never happens to a "real" corporation.

If all you have done is invest in the company and others are making the decisions, you are covered much more. But the size of your ownership in a company and more importantly your role in the governance of that company can increase your liability considerably if that company does some stuff that can cause liability. Just ask Bernie Madoff. I'm sure he would have loved to have been in a position where his liability was only limited to just the value of the shares he invested into his companies.

Too Expensive

[jellomizer]

Patent process are too expensive for the average Programming shop. As well many of their innovations are not produced in systems for the general public but for their customer. The time it would take to write up the patent application get it approved etc... Could takes days or weeks of work away from working on a project that can bring revenue now.

Big companies that can produce software to a large scale (write once copy a million times) have the ability to deal with Patents, as once the product is released it is making money and will bring in a stream of revenue for a while, giving time to make formal patents and do R&D.

Re:Too Expensive

[Anonymous Coward]

Yes, patents are too expensive. Lower the price, and get the lawyers out of it.

Interesting Points

[Pop69]

The language in the US Constitution says

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

If software patents do not promote the progress of science and useful arts are they not unconstitutional ?

Re:Interesting Points

[Maximum Prophet]

If software patents do not promote the progress of science and useful arts are they not unconstitutional ?

Lawrence Lessig tried to argue that about retroactive copyright extension before the Supreme Court. He lost.

Re:Interesting Points

[jellomizer]

That is not not false. Well it is a question that will need to be brought up in court. Because even though only large companies are seeming to use software patents, it really doesn't prove or disprove that it is hindering Science and Arts.

I can use double negatives too.

Re:Interesting Points

[Pope]

That's because his argument, as told to the Court, sucked. He wrote about how he botched it afterwards.

Re:Interesting Points

[Morphine007]

I don't think so.

The argument being made is that securing those rights (at least, using the current methods) doesn't actually promote that progress. So I suppose it could possibly be interpreted that the current system doesn't fulfill the intent of that portion of the constitution. Which might make the current process for obtaining a patent unconstitutional.

However, to claim that it makes patents themselves unconstitutional doesn't seem valid.... but, again, one could draw the conclusion (with a lot more evidence, I'd think) that progress in science and useful arts can't be promoted via granting parties exclusive rights to writings and discoveries at all... which would mean that the portion of the constitution that you quoted would have to be deemed as being sel-conflicting and therefore stricken from the constitution or amended... and while that claim might actually be true, I don't think getting it amended would be easier than revamping the patent system/process

Re:Interesting Points

[NoNonAlphaCharsHere]

Argue once, fail forever. Not on the basis of the argument itself, but on HOW the argument was made. Gotta love the legal system :(

Re:Interesting Points

[Anonymous Coward]

Even if that were a valid legal theory (ie that empirical evidence of software patents inhibiting innovation could make them illegal), you could never make the showing. The companies acqiring software patents are also spending billions in R&D, so you would have to proove that eliminating software patents wouldn't simply redistribute the innovation, or cause a net decline.

Re:Interesting Points

[Morphine007]

In the case where companies with a large patent portfolio are actually spending billions in R&D, I'd say you have a massive point, and that any claims made by anti-patent folks that patents are stifling innovation would be extremely difficult to substantiate... and that those claims may not even have any basis in fact.

However, in the case of companies with a large patent portfolio that do little to no R&D (with companies whose sole business case is patent trolling being the most obvious case), I would think that the claims made by anti-patent folks would need no substantiation at all...

Re:Interesting Points

[Fjandr]

No, since descriptive clauses like "To promote the progress of Science and useful Arts" have no force in and of themselves. They give the reasoning behind why a power is granted government, but don't prevent that power from being used for other things so long as it does not exceed the scope of power granted.

Re:Interesting Points

[chemicaldave]

SCOTUS, understandably, simply does not have the time to hear cases twice. It's not the legal system's fault Lessig botched his argument.

Re:Interesting Points

[Grond]

This is not true. From Morton Salt Co. v. GS Suppiger Co., 314 US 488, 492 (1942):

The grant to the inventor of the special privilege of a patent monopoly carries out a public policy adopted by the Constitution and laws of the United States, "to promote the Progress of Science and useful Arts, by securing for limited Times to . . . Inventors the exclusive Right . . ." to their "new and useful" inventions. United States Constitution, Art. I, 8, cl. 8; 35 U.S.C. 31. But the public policy which includes inventions within the granted monopoly excludes from it all that is not embraced in the invention. It equally forbids the use of the patent to secure an exclusive right or limited monopoly not granted by the Patent Office and which it is contrary to public policy to grant.

The Court identified promoting the progress of science and useful arts as a public policy that limits patent rights. Admittedly, this is a high bar, and patent misuse (the issue in the Morton Salt case) is rarely a successful defense to infringement, but the principle is there.

Re:Interesting Points

[robot256]

So? Are you defending a system that relies on a single person's single argument to save the entire society from an unconstitutional law that should never have been passed in the first place? Sounds like there's a bit of a weak link in the chain.

Re:Interesting Points

[Fjandr]

Interesting, I was not aware of a single ruling holding that a descriptive clause carried any force to limit a power granted to Congress.

Re:Interesting Points

[brainzach]

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

Copyrights and trademarks are the tools to protect the rights of inventors and promote progress of the software industry.

Most of the value in the software industry comes from the implementation of ideas and not the idea itself. If you spent millions of dollars developing a type of software, chances are a competitor will have to do they same so there are already barriers of entry.

Copyrights are able to protect someone from directly copying your work, but they don't stop anyone from independently implementing a better version. You can still build a better mousetrap.

They should just treat all forms like of software like video games. You can copy all the ideas you want, but your specific implementation of the idea and artwork will be protected. Imagine if someone patented first person shooters or if someone patented the idea of using a device to trap mice.

Re:Interesting Points

[chemicaldave]

A single person's argument? You're assuming that Lessig's side would have won the case. As if the outcome hinged on his argument and his alone. No. Supreme Court cases rely on many peoples' input. Given how many cases the SCOTUS must hear each year, they should not be required to rehear a case simply because someone did not come prepared.

Re:Interesting Points

[drb226]

not not false...I can use double negatives too.

I believe, sir, that was a triple negative. Also, English questions phrased "is it not _?" usually are an assertion of _, so in this case the double negative doesn't actually double negate. It turns into an assertion of "unconstitutionality".

Re:Interesting Points

[Anonymous Coward]

I don't know what Lessig gave as his explanation; but I vividly recall him spending way too much time in the media spotlight while the case was before SCOTUS. That is not the way to do it. Winners of landmark cases probably treat it like a combination of a PhD thesis, final exams, and SAT prep all rolled into one. You don't campaign. You study. You prepare. Then, you have the most intense oral exam of your entire career. You don't go in front of any cameras. You don't treat it like a reality TV show. That's why Lessig lost.

Re:Interesting Points

[booch]

Unfortunately, the Supreme Court said that Congress should get to decide what it means to promote progress.

Re:Interesting Points

[dachshund]

That's because his argument, as told to the Court, sucked. He wrote about how he botched it afterwards.

Whatever. I've read Lessig's apologia, and while I appreciate that he's humble about it, there was absolutely no way that the court was going to overrule Congress and the largest media companies in America.

He made a legitimate constitutional argument, the court sidestepped it, and that was that. It would be nice to live in the world where the Supreme Court cared about copyright terms, but we don't live in that world. Lessig should know.

Re:Interesting Points

[Fjandr]

After reading the ruling, it seems we're talking about two different things. I was talking about the scope of powers granted to the government. The government's power is not constrained to limit legislation governing the issuance of patents by the "promotion" clause of the Constitution. The ruling limited the scope of contract terms that a patent-holder could impose in return for licensing a patent.

Anecdotal evidence that they don't

[Beryllium Sphere(tm)]

I got called in for a deposition when $BIGCOMPANY was sued for infringing a patent on $OBVIOUSTECHNIQUE in $FIELD. The level of inefficiency in the proceedings was staggering, particularly since the project I was on hadn't even used $OBVIOUSTECHNIQUE. One of $BIGCOMPANY'S attorneys told me that progress in $FIELD has halted due to fear of patent litigation, which anyone much smaller than $BIGCOMPANY couldn't possibly afford.

Re:Anecdotal evidence that they don't

[presidenteloco]

You are in deep sh$t!

Please reference US Patent 94362451: A method and process of generalizing textually rendered statements by the inclusion of variables.

direct link to the paper

[ravenII]

A Generation of Software Patents http://www.bu.edu/law/faculty/scholarship/workingpapers/2011.html

Really useful

[ciaran_o_riordan]

To slashdotters, this may be "duh" science, but it's really important to have this on paper when we talk to judges and legislators. Otherwise, we're left explaining the problems and hoping that the legislator will agree that our logic is "obviously" correct.

Bessen also co-authored Patent Failure with Michael Meurer and a previous study An Empirical Look at Software Patents, along with Robert Hunt.

http://en.swpat.org/wiki/Studies_on_economics_and_innovation
http://en.swpat.org/wiki/James_Bessen
http://en.swpat.org/wiki/An_Empirical_Look_at_Software_Patents

Incompatible

[Nethemas the Great]

The patent process takes longer to complete than the lifespan of most software products. Writing software patent applications would pull valuable engineering resources away from where they're needed most, engineering. If everything that "could" be patented "was" patented then no one would be able to write software without infringing upon someone else's patent. This is largely the case already. Most dev houses get away with infringement because they are either not big enough to bother frying and/or the infringement is non-obvious and they fly under the radar. The expense of patenting from authorship, to lawyers, to application, through to approval is prohibitive. Enforcement of patent rights is reserved for those with war chests large enough to field the researchers, lawyers and court costs, etc..

Sent A Copy To My Congressman

[Anonymous Coward]

It is now time to revise what has not worked so well before.

And it will only get worse

[Anonymous Coward]

With the new patent legislation going through the house and senate now, only the large mega corporations will be able to innovate... and given the pace at which they truly innovate, we're going to begin really stagnating... Already it's nearly impossible for a small IT shop or a lone programmer to really do well, with the constant threat of patent lawsuits. Now, this new system will make it harder for the small guy to succeed, and easier for the big iron...

I contacted my senators and my representative the other day, and got a generic canned response that basically amounts to "sucks to be you"... Thank you Jean Schmitt and Sherrod Brown...

Has anyone done a statistical study of obviousness

[presidenteloco]

In US software patents?

i.e. Get together a panel of computer science professors and experienced software engineers / architects / guru coders (i.e. practitioners in the field) and have them assess a random sample of software patents with an assessment: definitely obvious to a competent practitioner in the field, probably obvious, , probably not obvious, definitely not obvious.

I'd be really curious about the result. (Maybe it needs to be done on a claim by claim basis, but it would be interesting even to see it done on the preamble/overview descriptions of the patents.)

enforceability

[flipk]

My biggest problem in getting my patent applications approved has always been "enforceability." One example was a method for maximizing PCI bus utilization in a many-board CompactPCI cage (it was a sort of token-distribution method for preventing wait-cycles and bus-to-bus bridge fifo overruns, kind of silly in retrospect). The patent review board looked at the stuff I've written and says "yeah, that's a really good idea, but how would you ever detect that a competitor's product is violating it?" Which is a good point, about the only way you'd know is by connecting PCI analyzers to the backplanes of every PCI product known to man and spending hours on each one analyzing traffic trying to figure out if they're distributing tokens or somesuch. So based purely on the grounds of the idea, they would have been willing to pursue it, but given that we never would have been able to tell if someone else's PCI-based product was doing it, they didn't think it would be worth spending the tens of thousands of dollars it would have taken to push the application through. It wasn't long after that that I realized the flipside of the coin is also true. If I am coding something like this, how would I know that someone already has a patent on it? There's a million different ways to describe it (anything from "token flow control method on a shared memory bus" to "method to increase multiple queue throughput") and many may apply without even using the words "PCI" or "flow control" or "token" -- so how would you ever possibly do an exhaustive search of the literally millions of SW patents out there? The answer is, you don't. You just have a large well-paid legal staff that can fight off any tom dick or jane who thinks their poorly-worded patent somehow can be twisted into applying to your product. I'm pretty sure the average developer writes at least one thing every month of their careers which violates some interpretation of some patent somewhere. The patent system exists for the purpose of encouraging creative people to come up with creative ideas, and then protect and profit from those ideas. Given the limitations of the software patent, and the vague genericness of ridiculous software patents, it is obvious that software patents are completely incapable of meeting those goals. Smart people don't file for patents for creative things they done. SW patents have completely degenerated into handguns & bullets for large companies : when a company wants to (indiscriminately) impact the pocketbook of another company, they just load up some random SW patent and pull the trigger. They're not used for protecting creativity. They're used to force a court to force a competitor that they don't like to cough up huge wads of money.

INDIAN STOCK MARKET NSE AND BSE MCX TIPS

[Anonymous Coward]

Dear Visitor,
Would like to appreciate the effort of the webmaster for creating such a wonderful blog which is very helpful for the visitors.
Would like to add few notes here like if we are trading in Share market say specially in NSE and BSE which are one of the most popular stock exchanges of the world then we need to take care of the few things like
1. Never overtrade
2. Avoid emotional trading decision
3. Don’t work on layman’s advise
4. Always seek professional support before investing your hard earned money
5. Its good to trade with strict stoploss always.
6. Rely on research rather than speculation.
To name few.
This is for sure if we follow above 6 points then we can always stay in profit. Its just like how investors and traders approach them.
Regards
SHARETIPSINFO TEAM