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03.12.13

Eliminating Software Patents, Not the Symptoms

Posted in Patents at 3:51 pm by Dr. Roy Schestowitz

Cutting off the source of the disease…

Surgical instruments

Summary: A call for effective strategy in the fight for peaceful programming; identifying a common distraction which is patent trolls and FRAND tolls

It was several moths ago that we wrote about Rackspace in relation to patent trolls. Here is something we found in the press;

Open cloud company Rackspace has appointed an open source industry guru to its VP of intellectual property position.

Open source and ‘intellectual property’ in the same sentence? Is it patents or is it copyrights that they allude to? The truth is, many are not targeting the problem at its core. Here is a VC promoting tje SHIELD act as though it’s the solution. As he puts it in his blog:

And now a return to a favorite topic here at AVC – patents, patent trolls, and the urgent need for patent reform here in the US.
One of my favorite ideas for sensible patent reform is “loser pays” for the legal costs of the other side.
The reality is that patent trolling is a low cost form of shakedown and that there isn’t much economic cost on the troll to deter this behavior. If challenged in court, patent trolls win less than 25% of the time. And yet so few of these shakedowns ever go to court because the cases get settled for economic reasons (settlement cost are less than expected defense costs). And these settlements fund the trolls to keep shaking companies down. If the target company can recover their legal costs by defending themselves and winning, then the math over the settlement changes and more cases will be litigated, thus increasing the costs for the trolls.

The core problem is not trolls but their weapon of choice. Disarming them is the answer. The problem is not just trolls but also cartels, which are sometimes trolls or consortia backed by practicing companies. MPEG-LA is just one example and as this new piece puts it:

STANDARD-ESSENTIAL PATENTS IN CONTEXT: JUST A SMALL PIECE OF THE SMARTPHONE WAR PUZZLE

The crux of the debate centers on how much flexibility SEP holders have to negotiate licensing terms for their patents that are promised to be licensed under “(fair) reasonable and non-discriminatory” terms (FRAND or RAND). Specifically, the debate focuses on this question: when is it appropriate to enjoin infringing products from the market if licensing negotiations break down? Historically, FRAND commitments have been relatively ambiguous, giving those holding SEPs broad (but not unlimited) flexibility to negotiate “reasonable” bilateral deals. Currently, there is a movement afoot to give SEP holders less negotiating flexibility. This will have both positive and negative consequences.

FRAND, like trolls, has been another mechanism for utilizing software patents to harm innovation in small companies by rendering them incapable of entering the market. What we really ought to strive for is not suppression of symptoms but of root causes. Jeff Jaffe from Novell, who is now the W3C's CEO, celebrates the MPEG-VP8 marriage, but it’s a victory for FRAND and software patents, it’s not a win at a political level over policy reform.

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