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07.23.10

Patents Roundup: Identifying Real Patent Foes and Conflicts of Interests

Posted in FSF, GNU/Linux, Law, Microsoft, Patents, Red Hat at 7:33 am by Dr. Roy Schestowitz

Medieval warrior

Summary: Patents are a double-edged sword that’s abused both by opponents of GNU/Linux and defenders of it; the patent trolls are the only small entities to benefit from patents (law firms aside)

WHEN it comes to software patents, Microsoft is the #1 enemy of GNU/Linux. People like Florian Müller would like to divert attention away from Microsoft (Müller has written many comments there to defend himself) and in response to the likes of them, Pogson writes a detailed rebuttal (which saves others from needing to do so).

I recently received a FUD post about four companies: IBM, RedHat, Google and Oracle. The FUD being sown was that these folks while pretending to be FLOSS supporters were actually crassly fighting open interoperability. The truth is much different.

IBM, Red Hat, Google and Oracle all have a misguided policy when it comes to software patents for reasons we explained before; but it hardly makes them a threat to GNU/Linux. We expect that the inclusion of Red Hat here would raise a brow, but we covered this subject in posts such as:

Mark Webbink, who used to work for Red Hat, is still taking an OIN-like approach whereby he chooses to live alongside software patents and defend Free software. It’s arguably impractical. In Red Hat’s site he has just published this article about Peer To Patent, which we last criticised when Peer To Patent Australia got announced.

The willingness to collaborate brought us free and open source software. Now we continue to see that willingness to collaborate permeate our government agencies. A prime example is the Peer To Patent program developed at New York Law School by Prof. Beth Noveck. First presented as an idea on her July 2005 blog Peer to Patent: A Modest Proposal, Peer To Patent has become an early success story in actively engaging the public to improve the quality of government decision making.

[...]

In addition to the U.S. pilot projects, IP Australia has run a Peer To Patent – Australia pilot project in conjunction with Queensland University of Technology with technology assistance from New York Law School. The results of that pilot are now being compiled, but it appears the results will be quite similar to those in the U.S. Later in 2010 the Institute of Intellectual Property in Japan plans to run a Peer To Patent pilot in conjunction with the Japan Patent Office.

Webbink is one of the legal types to whom software patent problems are potential business. That’s just being honest and looking at the vested interests. The SFLC may have similar interests which the FFII sometimes criticises it for.

As people may imagine, with the arrival of the Bilski decision came many self-promoting plugs that are concise summaries/analyses of the longer original text. We received such ‘plugs’ by E-mail and it turns out we were not alone:

as the decision came down Monday, The Prior Art’s inbox was filling up with e-mails from lawyers and law firm publicists offering expert commentary on what it all meant. (By the end, the number of pitches had hit nearly 40). One e-mail, from Goodwin Procter’s Stephen Schreiner, contained a statement that typified the joyous tone of the patent bar’s broader reaction. Schreiner said the Court had “launched the United States Patent System into the Information Age with the Bilski v. Kappos decision today….Rejecting the chorus from some demanding the Patent System be limited to Industrial Age technology, the Court answered with a flat ‘no,’ finding patents are available for software, business methods, medical diagnostic techniques, and other products of the Information Age.”

[...]

And what about those who sought an even more far-reaching change—the abolition of all software patents (of which it is estimated there are now more than 200,000)? The Bilski decision makes that dream look like one that may never come true. Some of the anti-software-patent activist groups are likely to refocus on educating Congress and the wider public about their cause rather than hoping for near-term court action.

“I’m not optimistic about it,” says Peter Brown, director of the Free Software Foundation. “At the end of the day, if this decision allows more abstract ideas to be patented, there’s going to be a hell of a lot more litigation.” Such pressure could ultimately lead the business community to push for more limits on patents. “Maybe the financial services industry will say, ‘Clearly, we’re not getting anywhere with the courts,’” Brown adds.

Brown is from the FSF. Unlike several other groups, the FSF makes no money from legal problems. That’s why we trust the FSF more than anyone else (e.g. OIN, SFLC, the academics behind Peer To Patent) when it comes to a conflict of interests-free stance on software patents.

“Sony is also a huge promoter of DRM and sponsor of the MAFIAA (RIAA|MPAA).”In other patent news, Sony is said to have just patented two-player 3-D technology, which sounds like a software patent. Slashdot has links to the filings and it has changed its headline to improve accuracy.

Sony is a big promoter of software patents, for obvious reasons. Sony is a massive company (almost twice the number of employees Microsoft has), so it can afford to waste time filing for patents. Sony is also a huge promoter of DRM and sponsor of the MAFIAA (RIAA|MPAA).

According to a new academic study, patents in general are bad for startups.

It seems that every week we hear about another patent lawsuit between tech companies claiming the exclusive rights to various technologies and methods. With large corporations like Apple, Google and Microsoft frequently defending patents in court, smaller companies may get the idea that patents are the best way to protect intellectual property. A recent survey from the University of California, Berkeley found that, in fact, the opposite trend is appearing among these types of companies. The largest reason? Cost.

We wrote about this yesterday and received the following good feedback from Jose_X, who argued: “The example above showing the small businesses being put out of business from patent threats shows why patent broad government subsidy hand-cuffing monopolies should never be applied to the medium and small groups (or at least not too harshly). Let the giants fight, but if some technology is within the development capabilities of small firms, then a monopoly or even just the threat of it by litigious entities is too stifling to many.

“We should not be creating tools (and artificial scarcity) by helping wealthy groups tax small groups or even put them out of business with these tools.

“We should not be creating tools (and artificial scarcity) by helping wealthy groups tax small groups or even put them out of business with these tools.”
      –Jose_X
“One possibility for patent reform is to limit how any patent can be used on entities which have revenues/profits below a certain amount and are not mostly owned or controlled by another entity that itself might fail to qualify.

“An additional possibility is to outright prevent “information” or abstract patents. The SCOTUS has ruled this way over the years, but that hasn’t kept litigation down in the US. Congress should pass a clear law to remove “information” patents. The broad coverage possible from a patent (or from a broad copyright “derivative works” definition) is too far reaching and hence stifling unless it only affects a small number of groups that already have significant levers at their disposal.”

The only ‘startups’ that can benefit from patents are patent trolls, but they offer no value whatsoever to the industry. To expand on the new example which we gave yesterday, here is more press coverage:

There is even a press release about it.

Other patent trolls like Spangenberg [1, 2, 3] are fortunate enough to receive press coverage. From the opening:

Erich Spangenberg makes a fortune suing major corporations for infringing on patents he owns. Is he exploiting a legal loophole or is he a modern-day Robin Hood? A look at one very unusual and vilified profession.

Calling it a “profession” is like characterising Bernard Madoff as a “professional”.

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18 Comments

  1. Florian Mueller said,

    July 23, 2010 at 11:48 am

    Gravatar

    I strongly reject the theory that I “would like to divert attention away from Microsoft.”

    If that were my mission, why would I have linked to this website here several times on Twitter and my blog?

    I raise issues that many others don’t like to talk about because of all sorts of FOSS people having some sort of attachment to the likes of IBM and Red Hat. I have a clear-cut focus: anticompetitive exclusionary use of patents and hypocrisy are the two priority subjects I focus on. Microsoft doesn’t use patents on an exclusionary basis nor does Microsoft pretend to defend FOSS interests. They lobby for software patents and in that context I’ve mentioned them several times. They file for many (but IBM owns more than Microsoft, HP, Oracle, Apple, EMC, Accenture, and Google combined).

    I believe that the issues I raise and the angle from which I do so make a contribution to people’s information-gathering and opinion-forming. I encourage pluralism. All of what I wrote about OpenForum Europe is right on and it’s a shame that the FFII and FSFE (both of whom I respect very much apart from that fact) collaborate with OFE, a notorious pro-software-patent lobbying entity. I actually believe it would be in the FFII’s and the FSFE’s own best interest to dissociate themselves from such an organization for credibility reasons. The New York Times article on which I commented contained the absurd quote of the OFE’s chief executive saying that proprietary companies are “trying to preserve their market positions” when considering what IBM, Oracle and Google do to protect their market positions in their core businesses (where all of them are proprietary, too).

    Dr. Roy Schestowitz Reply:

    Microsoft doesn’t use patents on an exclusionary basis…

    We’ve already had this discussion. You need to get your facts right.

    Florian Mueller Reply:

    We had the discussion and you didn’t have anything there that was remotely a relevant fact. You had only non-facts and irrelevant facts to offer. Not one company has had to go out of business because of Microsoft patents. Some went out of business because of Microsoft, like DR, but not because of patents. Microsoft has only started patent litigation three times so far, and in each of those cases the other company was offered a license deal.

    Dr. Roy Schestowitz Reply:

    Microsoft has only started patent litigation three times so far..

    How many companies has Microsoft threatened to sue?

    and in each of those cases the other company was offered a license deal.

    That’s like saying, many shops opened the register when Capone and his buddies came over.

    Florian Mueller Reply:

    The question of companies threatened to sue isn’t relevant to the issue of exclusionary use. The fundamental difference is whether someone asserts rights and wants to be paid (going to court only if all else fails) or whether someone from the start just wants to cripple the functionality of a competitor’s product, up to the point where that competitor might be shut out of the market.

    I don’t like it that there are software patents — without them, no royalty problem. But if companies rightfully own them, I prefer them to content themselves with royalties as opposed to seeking destruction.

    Dr. Roy Schestowitz Reply:

    We’ve been through this discussion before. We don’t agree on this.

    twitter Reply:

    You don’t but you do?

    I strongly reject the theory that I “would like to divert attention away from Microsoft.” … Microsoft doesn’t use patents on an exclusionary basis nor does Microsoft pretend to defend FOSS interests.

    Your rejection is correct because you have gone from diversion to outright defense of the indefensible. This site was founded as a reaction to the exclusionary Novel/Microsoft deal and has extensively documented that and many other patent extortions. In case you need to be reminded in Microsoft’s own words, I have a small history of Microsoft patent extortion. My history is not complete but it is compact enough for a busy person to read and understand. Patents are exclusionary by nature but Microsoft has become the biggest abuser of them especially against free software which is fanatically hated by Microsoft management. GNU/Linux has been a special target of patent attacks by Microsoft from at least 2002 and they have been driven to launch lawsuits without hiding behind their usual stooges. It is hard to believe that someone concerned with patents and free software would not be aware of these recent lawsuits.

    Dr. Roy Schestowitz Reply:

    Primax, TomTom, and Salesforce.

    Florian Mueller Reply:

    I just googled the Primax story. I found a Microsoft press release that says: “Microsoft has filed an action today with the ITC after making repeated attempts during the past several years to engage in meaningful licensing discussions with Primax. Microsoft has an open intellectual property licensing policy, but in situations such as this, in which a reasonable licensing agreement cannot be reached despite our best efforts, we have no choice but to pursue legal action to protect our innovations.”

    Same thing with TomTom and Salesforce. None of those companies ever denied that Microsoft wanted to do a license deal.

    Also, it’s worth noting that the Primax case isn’t about software patents.

    Dr. Roy Schestowitz Reply:

    I know it’s not. I wrote a lot about it.

    Florian Mueller Reply:

    @twitter, I’ve gone over your slashdot page. It’s an interesting collection, but I couldn’t find any example of an exclusionary use of patents. Collecting royalties isn’t exclusionary. Demanding the removal of a feature (or a whole list of features) from a competitor’s product is exclusionary and can even force a company out of business. I don’t see any example of Microsoft having done that. In particular, I don’t see how the Novell deal is exclusionary. All GNU/Linux distributors have been able to go about their business. No one’s been shut out.

    Dr. Roy Schestowitz Reply:

    GNU/Linux vendors would beg to differ. They made formal announcements too and that depends on semantics.

    Florian Mueller Reply:

    > GNU/Linux vendors would beg to differ. <

    I understand Red Hat's comments as them having refused to do a similar license deal. So they weren't excluded. They opted out, and they're still around and actually doing well.

    Dr. Roy Schestowitz Reply:

    You are using a red herring now.

    twitter Reply:

    That arguments can be used to justify any extortion and I think you are intentionally missing the big picture. Microsoft is using patents to increase the costs and risk of companies that use free software just as they planned back in 2002. Increasing the cost of free software is the only way Microsoft is able to compete and their policy is obviously intended to exclude all free software from all markets. Yes, other internal documents show that Microsoft really thinks that way. The choice offered is costly litigation or costly licensing. Those who pay give Microsoft the ability to pick winners and losers because Microsoft can change their undisclosed fees at anytime. These patents that are never revealed in public we can assume that they would never stand up in court. That any of the extorted companies or those who refused to pay has not gone out of business is hardly justification for Microsoft’s clearly anti-competitive and exclusionary abuse of software patents. Thank you, Florian for reading but shame on you for rationalizing and apologizing the worst impacts of software patents on free software by one of the worst offenders.

  2. Florian Mueller said,

    July 24, 2010 at 10:07 pm

    Gravatar

    @twitter You say I’m “rationalizing” but it would actually be helpful if you could look at this as rationally as possible.

    There are two ways to use patents: collect royalties (which may include tactics where the contacted companies choose to pay rather than pick a fight) and seek injunctions. The law allows both, although in the case of a company dominating a given market there’s at least antitrust law to impose a duty to deal, along with a FRAND requirement, if all else fails.

    If you don’t want that kind of patent licensing to happen, you have to change or abolish the patent system. Since software patents are basically also hardware patents in most cases (they’re patents on “methods” and “machines”), this means you have to do away with very large parts of the patent system. But if there’s the political will, it can happen.

    The case you try to make here is that even the much less harmful way of the two to use patents is equally bad as the truly worst way.

    It’s easy to say that. The moment you’re in a responsible position in a company, or shareholder of a company, I’m sure you’ll view it differently. Maybe you own stock in, say, Red Hat. What would you prefer? Someone using patents that drive them out of business, or someone using patents in a way that affects relative competitive strength, gradually?

    I’m fine with convincing the rational people who look at the fundamental difference between the two ways to use patents. I can’t convince people who refuse to make a distinction that’s clear to anyone who either has business experience or can imagine what the situation of a business is like.

    I also think you’re way too convinced of a “legal theory” that patents that aren’t disclosed in a public announcement of a licensing deal are automatically weak. That’s completely off base. Show me even one license deal between practicing entities (with trolls it’s different because they usually have very few patents anyway) where the announcement comes with a list. And considering that Microsoft did file a lawsuit against TomTom, there’s no rational reason whatsoever to assume they were afraid of whether their patents stood up. As far as the FAT patents are concerned, those have in fact survived different attempts to invalidate them (I remember when Eben Moglen told me about wanting to take them down, and to my knowledge he didn’t succeed, nor did the EFF).

    twitter Reply:

    There is no way to justify the way Microsoft extorts people with patents and it is not a normal business practice. I know inventors who have licensed normal patents. They did not approach potential clients with secret lists and NDAs threatening endless lawsuits. Other companies have used patent to extort their competition in the past, but even in outrageous cases like the “fat line patent” these were named. Please stop your shameful and now insulting defense of Microsoft’s judicial extortion and software patents in general. The greater public good in served by the abolition of software patents in the few places that recognize them and the continued lack of recognition for them everywhere else.

    Dr. Roy Schestowitz Reply:

    Watch him continuing the Microsoft whitewash just hours ago.

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