Why Software Patents are worse than useless

A few years ago, I had never even thought about software patents. I had started a company which produced commercial software in 1998, and working on it was still occupying most of my thoughts and creative energy. To me, the proposition was straight forward: sell the service of crafting business solutions from free and open source software (FOSS) components. We add as little or as much code as required to ensure that our software solutions fit our customers' requirements. We're extremely conscious of the licenses - enforced via copyright - governing the use of the software that forms our building blocks. We thought that by ensuring that we worked hard, gave credit (and source code) to others where it was due, and made sure our customers were satisfied with our solutions, nothing could go wrong. Goodness were we naive.

Copyright Yes, Patents Not so much

We, as FOSS software developers, spent a lot of time learning about a cornerstone of our craft - the GPL and other free software licenses which are a clever legal hack on copyright. We understood a lot of the nuances they identified... But we certainly didn't think we needed to know much about software patents - they were generally lampooned as ludicrous things: Amazon's "one click" patent, and Unisys' GIF patent, and the Fraunhoffer Institute's widely circumvented MP3 encoder patent.

Quick background on Patents

For those of you who might not be familiar with the history of patents or the real motivation behind them, here's a quick introduction. Patents were introduced in various jurisdictions around the world (initially in Venice and England) in the late 1400s to address a perceived problem: inventors were hiding the fruits of their innovation for fear that their ideas would be stolen and their investment of time, money, and energy would be lost. Leaders of these societies saw that the greater good (that of society in general) was not being served, so they agreed to a system of government granted time-limited monopolies on specific inventions. The sole purpose of providing these monopolies was to create an incentive for inventors to commercialise their inventions to benefit society (and probably to bring glory to the state). Of course, these monopolies are market distortions, and as such, are inherently undesirable, but the governments of the day (who, of course, didn't have to contend with software) felt the positives outweighed the negatives, so they cautiously agreed to give them a try.

Obviously, it is incumbent on these same governments to reassess, from time to time, whether these market distortions are still warranted. Naturally, however, some of those who were historically granted patents gained substantial wealth over time, and obviously had a huge incentive to ensure that their monopolies extended for as long as possible.

In the present day, it seems that these individuals and, more recently, corporations have a lot more influence over the world's patent systems than do the population - for whose "greater good" patents were deemed justifiable in the first place. The greater good element has been forgotten by most patent holders. The idea of "protecting one's idea" now seems to be viewed as an inalienable right of innovators by both patent holders and their lawyers. This, of course, is an utterly unjustified position to take.

Patent Parasites

It must have been sometime after 2005 that I first heard about patent trolls. Sure, it sounded pretty nasty - corporations that existed purely to buy up the (primarily) software patents awarded to other companies, hire a team of lawyers, and look for some other hapless company dumb enough to write something similar enough to provide them with grounds to sue for patent infringement. My observations of patent trolls at the time:

• they don't produce anything
• they only enrich themselves and lawyers - they are obscenely lucrative (and unethical),
• they do so at the cost of innovative companies and the taxpayer (who funds some of the court action, and pays higher prices due to the liability of this new threat)
• they realise - and fully exploit - the fact that it's cheaper to settle: they don't even have to win a suit - in fact, very few even get to court because typically the patent troll has better lawyers and much deeper pockets. Plus, they've got nothing better to do than write depositions. Goodness knows they're not writing software.

But patent trolls were, from my point of view in NZ, an American problem. Hell, the US patent system was so famously screwed up, surely someone could see how wrong these patent parasites were, how unethical and damaging, and either dismantle or fundamentally reform it - well, maybe when Bush was finally gone. That's what we hoped.

Regardless, software patents and patent trolls weren't something I thought much about. None of us even thought for a second: "Wouldn't it be great to patent our software." No, we were too busy writing it, and loving the challenges. Patents provided us with absolutely no incentive to create software. In fact, actually trying to get a patent for software we developed never even crossed our minds.

Patents Hit Close To Home

Many of my friends and colleagues around NZ are members of the NZ Open Source Society - some of the more far-sighted members of the group started to talk about the dangers of software patents (some having heard Richard M Stallman, the author of the GPL license talk about his concerns). It certainly raised my awareness of the theoretical threat...

Many of us thought that, being so far away from the madness in the US, we were insulated by distance and obscurity... and then in 2006 one of us, Peter Harrison, happened to notice in an obscure publication from NZ own "Intellectual Property" Office's (IPONZ) that Microsoft was trying to get one over patent assessors:

Microsoft submitted a software patent application for (generally speaking) the idea of using eXtensible Markup Language (XML) to store word processor and other "office" document data. Pretty much every open source word processing package had been using XML to store word processor and spreadsheet data for years. The NZOSS scraped together enough money to challenge the application on the basis of prior art. We succeeded, sort of. Microsoft got a patent, but with the teeth knocked out of it.

But here's the clincher: MS had tried to submit the same patent in New Zealand after the applications were denied by the US, Europe, South African, and Japanese patent offices for being obvious and subject to prior art. They thought they could count on the incompetence of the NZ patent assessors - and they would've been right had it not been for our challenge! It was a disgusting and highly unethical move by Microsoft. But if we had only caught one, how many other trivial software patents (or those subject to prior art) had already been passed? How many were waiting for some unethical kiwi patent troll (or worse yet, one of the multinational corporations who hold approximately 90% of NZ patents) to decide to start sabre rattling?

The Microsoft Patent FUD Threat Bomb

And then in May 2007, it began: Microsoft accused Linux and open source software of infringing on 235 of its patents.

Not only did Microsoft not bring a lawsuit against anyone, Microsoft's General Counsel Brad Smith and licensing chief Horacio Gutierrez simply stated didn't even mention which patents Linux and other FOSS software infringed.

Microsoft, with the best lawyers money can buy, felt that they could derail the entire FOSS software movement simply by threatening the possibility of suing for patent infringement. Clearly their goal with the statement was to strike fear into businesses with deep pockets (who, surprise surprise, are most often the targets of patent infringement suits) who were toying with the idea of investing in and/or adopting FOSS. Of course, similar threats could be just as effective against proprietary software users.

To me, not only was that unethical - and exceeding immature (I would've been embarrassed to death if I was either of those two Microsofties making that claim on the record): "yes, we think you're infringing on our patents... but we won't tell you which ones! Nee nar nee nar." It also illustrated for me the fundamental wrongness of software patents. Let me try to explain.

If I, or my colleagues, are cutting code to solve a problem, it was almost certain that the use case we were codifying had been seen by someone else, somewhere in the world. And perhaps some component of it was patented. The odds were almost 100% that software we were incorporating into our customer's solutions from the cornucopia of FOSS could arguably been seen to infringe on someone's software patent somewhere. How could we ever hope to know?

The answer is: we wouldn't. Not until we (or, more likely, our customers) received an infringement notice.

The Patent Punchline

So, not only do software patents not encourage software developers to innovate, even the threat of software patent infringement might well discourage some developers, who recognise the liability they incur with each line of code, from entering the market. Don't just take my word for it. Patent trolls and companies like Microsoft actively use patents to discourage competition. Software patents in practice are now not only of generally poor quality, they are totally opposed to their original reason for existence.

The Ongoing Anti-Software Patent Struggle

When we heard about the NZ government's review of the patent system, we jumped at the chance to do something about this patent issue that was making us all increasingly nervous. We wrote up and presented our submissions (you can download our submission) to Commerce Commission Select Committee which made our case for excluding software from patentability in New Zealand. Following the formal Select Committee process, the government announced its support for the findings of the committee which included the unanimous recommendation that software be excluded from patentability (although with an apparently minor caveat that "embedded software" still be patentable). Wow, we were overjoyed. And that's when things got really ugly.

A number of multinational software companies, including Microsoft and IBM, along with their lobbying organisation, the very misleadingly named but extraordinarily well funded "NZICT Group" (who had failed to "get around" to making a submission to the Select Committee), tried to use back-room influence on the Ministry of Economic Development to overturn the decision. When that was detected (that's another story of intrigue, and suffice it to say, another example of unethical behaviour from Microsoft NZ and others), the minister involved, Simon Powers (to his credit), rejected their approach, and re-affirmed his commitment to the Select Committee's recommendation on software patents.

This change has now, finally, become law. That too, is fraught: how can IPONZ, who have trouble determining prior art from real novelty, and obvious from clever, determine what's "embedded software" vs. what's not. Of course, the NZICT Group, with their good friends, patent lawyers AJ Park are keen to help companies push the boundaries (Update 2011-02-15 - TechDay have removed this article presumably because the "webinar" happened this morning. Of course it's still in Google's Cache. If it disappears from the cache, I can provide a copy, but can't publish it due to copyright). I believe, unless all kiwi software developers oppose them, they will succeed in making the definition of "embedded software" so loose that it will effectively allow all software to be patentable.

The struggle continues.