04.22.08

Software Patents Roundup: Ambush, Reform, and Lobby

Posted in America, Europe, Microsoft, Open XML, Patents at 10:31 pm by Dr. Roy Schestowitz

Patent Poison Inside Our Standards

One good (or very bad) example of software patents in a candidate for standardisation is Microsoft’s OOXML, which might receive the go-ahead in June despite extensively documented corruption. In order to understand the impact of patents in something everyone must use, look no further than Rambus, which has just returned to the headlines.

Rambus, the fast memory designer, has won its appeal to overturn a 2004 Federal Trade Commission anti-trust ruling.

The DC Court of Appeals today decided that the FTC had not established that Rambus had harmed the competition and “therefore that the Commission failed to demonstrate that Rambus’ conduct was exclusionary and thus to establish its claim that Rambus unlawfully monopolized the relevant markets”.

There is a similarly interesting story which is briefly covered by Digital Majority (most links from this point onwards were extracted from there). It speaks of litigation as a barrier to implementation of IEEE standards and it is summarised thusly:

Regrettably, the Court of Appeals has decided not to stay the injunction in the CSIRO v. Buffalo et al litigation during the appeal period. Although Buffalo is confident that the final decision in the appeal will be favorable and that the injunction will be lifted, Buffalo is presently unable to supply wireless LAN equipment compliant with IEEE 802.11a and 802.11g standards in the United States until that decision is issued.

Need for Change Negotiated

At IT World Canada, an article that refers to issues such as RAND's incompatibility with FOSS are debated further. An interesting concept analogous to “fair use” for patents is proposed and then raised as a possible way to resolve this.

Patent quality is very low in some subject matter, such as software, which creates a practical problem. Patent quality must be assured in each subject matter area., possibly with a rule saying that 50% must be good quality in order for patents to be granted and/or enforceable in that subject matter? It is competition and first mover advantage, not exclusive rights, that drive innovation in software

We need a “Fair Use” doctrine for patent law, possibly carving out interface patents, royalty-free FLOSS implementations, and the activities of private citizens in their home or as amateurs and tinkerers. Patents for producing hardware or other tangibles are often opened up to competitors using RAND (Reasonable And Non-Discriminatory) licensing terms where there is a low per-copy royalty which is offered to anyone. While RAND is appropriate for tangibles, it is inappropriate for software which has a natural marginal cost of zero. RAND excludes from implementation any businesses using peer production methodologies.

As mentioned earlier, however, a patent reform seems to have been given the elbow. The bill is on the ice, but as the article below points out, it’s mainly about stopping patent trolls, not monopoly abusers that defend their territory from friendly ‘intrusion’ and fair co-existence with FOSS.

Patent overhaul spurred by the technology industry is in jeopardy of dying, after facing stiff competition from the pharmaceutical industry.

[...]

The technology industry, which relies a large number of patents, says it wants to change the law to deter “patent trolls,” or firms that hoard patents with the sole intent of enforcing them against infringers – regardless of whether or not the firm has any R&D resources or even a product utilizing the patent.

Formally known as S.1145, the Patent Reform Act opened a rift in the business world: biotech companies, labor unions, inventors, and capital firms squared off against the high tech and financial services industry, with companies like Cisco, Microsoft, Intel, and Bank of America fighting for the bill’s passage.

The ‘Troll Apologists’

Litigious leeches of science and technology still receive the sympathy of a few and the word “troll”, as mentioned above, still angers some people, who see nothing wrong with the practice.

In recent times, there have been concerns that the patent system been abused by opportunistic companies known by the phrase “patent trolls”. It has been alleged that such entities have stunted innovation and spurred unnecessary patent litigation.

[...]

Not everyone fears “patent trolls”. James McDonough of Emory University School of Law prefers to use the euphemism, “patent dealers in the ideas economy”. He has argued that, contrary to popular belief, “patent trolls” actually benefit society: “Patent trolls provide liquidity, market clearing, and increased efficiency to the patent markets – the same benefits securities dealers supply capital markets.” He maintains that “patent trolls” are a useful intermediary in the marketplace.

Others question the very existence of “patent trolls”, suggesting that they are little more than mythological creatures designed to frighten the executives of technology companies at night.

European Lobbying

Over in Europe, we previously saw how Microsoft lobbyists try to phase in software patents by lowering barriers (and potentially quality too). This latest push for the Small Business Act might not actually help small businesses. In fact, it will add further restriction and increase legal activity.

Speaking at the Informal Meeting of ministers for Competitiveness in Brdo (Slovenia) today, Arnaldo Abruzzini, Secretary General of EUROCHAMBRES, reiterated the need for a political commitment at all levels in favour of Small and Medium-sized Enterprises (SMEs), in particular in relation to the forthcoming Small Business Act.

Further complication of the system would hardly help small businesses, let alone established vendors of low-cost (or free) products. Another danger is unification of the systems, which can have software patents pentrate countries where they are currently not legal. █

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