02.20.12

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Patent Parasites and the Bubble of Software Patents

Posted in Intellectual Monopoly, Patents at 11:21 am by Dr. Roy Schestowitz

Soap bubble

Summary: News and commentary about patents, collected over the past few days

THE emergence of software patents in the news [1, 2] is one trend that we cannot ignore as we research this area which impedes Linux adoption. A British blog ponders, “Will 2012 see the end of the Cold War over Intellectual Property Rights?”

The USPTO is enhancing its relationships and tools, making it simpler to access the catalogue of monopolies. But why are so many monopolies granted in the first place?

The “UK moves to encourage patent innovation” says this new post, but the term “patent innovation” in the headline is bizarre. It’s part of the propaganda which tries to associate the two terms, implying or at least insinuating a causality that simply does not exist. To quote:

On Friday, the UK Government will close its consultation on the Patent Box draft legislation due to come into force on April 1 2013. The legislation aims to reduce corporation tax from 26 per cent to ten per cent for profits made on patented technologies. By offering this tax break, the aim is to increase high-tech manufacturing innovation in the UK and to encourage more telecom companies to set up on UK shores and increase investment.

April first. How fitting. Those patents have no benefit at all. They are a distraction. There are many good groups that have proven this scientifically/empirically and economically. The EFF is still fighting against software patents as well. Based on this piece, innovators too speak out on the matter:

V.A. Shiva Ayyadurai invented the EMAIL system at the age of 14 at 1978. He spoke with the Post’s Emi Kolawole about why software creators should choose the copyright over the patent. (Feb. 17)

Not only software patents are bad; Patents on genetics continue to cause controversy. To quote:

Gene-sequencing breakthroughs, spawning a fast-growing, multibillion-dollar market for drugs and medical tests, are also creating thorny questions over how to regulate commercial use of the human genetic code.

Health regulators are fashioning rules for bolstering oversight of laboratory-developed tests, including genetic analysis, that may show whether an individual is predisposed to certain diseases. Congress is determining whether patents on genetic material should be treated differently from other intellectual property.

Code should not be patented. It’s an exact science. That’s what copyright is for. And the nature of copyrights is different.

One new article calls software patents a “bubble in the making” because those patents may lose their validity in the near future:

A new bubble is brewing as companies find another way to inflate their balance sheets in ways that have no basis in reality. And there is a real risk to markets as a result of “patent farming.” Using examples of the underlying causes of previous bubbles, Nigel Morris-Cotterill, who warned of a global crash in 2006 and of a crisis in commercial property lending arising out of falling consumer spending in 2011, now explains where another crash is looming.

For the time being, patents on codes, for instance, continue to do damage. From the news:

Reston-based ObjectVideo Inc., a video analysis software-maker, said Sony Corp. has signed an agreement to license its patented technology, and it has withdrawn its patent infringement complaint at the U.S. International Trade Commission.

Here is a company that became somewhat dependent on software patents (despite using Linux):

The company that introduced the digital video recorder 15 years ago and then faded from view once the dot-com bubble burst is back in the spotlight: In the past year, it has emerged victorious in two important software-patent litigation cases, and it is winning new subscribers on the strengths of a redesigned “smart” DVR that integrates Internet and television content and is a cinch to navigate.

Users can stream movies and music and tap into an extensive on-demand library, as well as record programs and zip past commercials, with ease.

Alcatel-Lucent is another company that turned to patents in recent years, despite being a notable Linux user. As one new article puts it: “By Telecom Lead Team: Alcatel-Lucent is set to leverage its portfolio including approximately 29,000 issued patents through a licensing syndicate to be formed by RPX Corporation. Recently, Ericsson also announced its plans to strengthen patent revenue.

“Patents of Alcatel-Lucent are relevant for technologies such as fixed line and wireless communications, semiconductors, consumer electronics, multimedia, optical, software, cloud computing, applications and network security.”

Another deal has been signed: “Alcatel-Lucent moved to cash in on the booming intellectual property market today amid mixed fourth-quarter results, offering licenses to its 29,000 strong patent portfolio.”

Microsoft was among previous targets. Over at Red Hat’s unofficial blog, the patent of Eolas is being discussed:

Everyone take a deep breath: it seems we’ve had a moment of sanity in the patent wars. Last week, a jury invalidated the dangerous Eolas patents, which their owner claimed covered, well, essentially the whole Internet. The patents were originally granted for an invention that helped doctors to view images of embryos over the early web. A few years later, smelling quick cash, their owner insisted that it had a veto right on any mechanism used to embed an object in a web document. Really? The patents are obvious—both now in 2012 and back in 1994, when the first one was filed. Thankfully, a jury realized that and did what should have happened years ago: it invalidated these dangerous patents.

We wrote about this in a dedicated post and articles about this continued to appear [1, 2]. As a Forbes blogger put it, “[t]he plaintiffs, Eolas and the University of California, maintained that they thought of the idea first and therefore had the right to prohibit anybody else from using it.”

The University of California should quickly retreat from this. It’s a PR disaster.

Another patent agitator is being acquired in part now:

Openwave established many of the foundational patents that allow mobile devices to connect to the Internet. Over the years, the company has built a patent portfolio of approximately 200 patents spanning smart devices, cloud technologies and unified messaging. Openwave provides all-Internet Protocol (all-IP) mediation and messaging. Openwave indicates it will focus on its intellectual property initiative. In January, Wedbush analyst Scott Sutherland told Reuters that Openwave’s patents could be valued at $300 million.

They use euphemisms to describe a strategy of lawsuits. Openwave is an example of what’s wrong with the USPTO, which focuses on creating monopoly bubbles rather than tangible innovation. We have already done a lot to criticise Openwave.

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