While I was out (running my business)

I’ve had to back-burner my righteous indignation to focus on running my business. There was a fair bit of software patent news while I’ve been out:

End Software Patents has launched their web site. Ben Klemens, Executive Director, is the author of Math You Can’t Use: Patents, Copyright, and Software. To quote, “Every company is in the software business, which means that every company has software liability. We estimate costs of $30.4 billion a year due to software patent suits (see our 2008 State of Softpatents report), and not just by Microsoft and IBM—The Green Bay Packers, Kraft Foods, and Ford Motor are facing software patent infringement lawsuits for their use of the standard software necessary for running a modern business.” Summary articles are available on linux.com and ars technica. Go, Ben!

The Court of Appeals for the Federal Circuit, which has exclusive jurisdiction over appeals in patent infringement cases in the U.S., has granted a relatively rare “en banc” review to consider Just How Patentable is Software, Anyway? (Maybe I’ll win over that lawyer of ours, since he’s the one that wrote this article.) TechDirt also has an article.

The Software Information Industry Association has asked the Supreme Court to examine whether states are immune from patent infringement lawsuits. See this Information Week or TechDirt article.

The U.K. High Court allows computer program patent claims.

A study shows that patents fail small businesses, “the nation’s current patent system is a drain on entrepreneurship and small-business growth”.

The Bush administration clashes with tech titans on the Patent Reform Act of 2007.

In Internet Software Patents, Philip Greenspun, a pioneer of web technologies at MIT, talks about one-click ordering:
I was asked “Why didn’t you patent this yourself, if you developed it first?” My reply was “It only took me an hour to build; if I went down to the patent office after every hour of programming, I wouldn’t get very much done.”

Brad Feld talked about the software company patent machinery “not innovating but instead cranking out a bunch of stupid patent filings that clog the system”. Todd Vernon discloses “My Dumb Software Patents.”

In Patents, Injunctions, and Uncertainty, Timothy B. Lee discusses the devastating impact of injunctions when there’s just licensing revenues, as opposed to physical property, at risk.

As described here and here, the anti-patent page of MySQL has gone dark now that they’ve been acquired by Sun. Thanks to archive.org, it’s not lost forever.

Say it ain’t so. The BusinessWeek article, More Bad News at Tax Time, reports that Internal Revenue Service has proposed new rules that would pull within its orbit any software patent that affects taxes, likely choking innovation.

In older news, the former Red Hat General Counsel, Mark Webbink discusses software patents and the philosophy, business pressures and judicial activism that created them on a YouTube video.

What Is a Patent?

From uspto.gov, with my comments interspersed.


What Is a Patent?

A patent for an invention is the grant of a property right to the inventor, issued by the United States Patent and Trademark Office. Generally, the term of a new patent is 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed, subject to the payment of maintenance fees. U.S. patent grants are effective only within the United States, U.S. territories, and U.S. possessions. Under certain circumstances, patent term extensions or adjustments may be available.

The right conferred by the patent grant is, in the language of the statute and of the grant itself, “the right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States. What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention. Once a patent is issued, the patentee must enforce the patent without aid of the USPTO.

The right to exclude makes sense when an invention is 99% perspiration. If I’ve spent massive amounts of time and/or money discovering the cure from the common cold, I should have the right to profit from my discovery by blocking you from mimicking my formula. However in our current system this exclusionary privilege has been twisted by patent trolls to extract license fees via the threat of lawsuits for patents they obtained by acquisition, not invention.

20 years also makes sense when an invention has the potential for a long life. But what software isn’t obsolete way before 20 years is up?

There are three types of patents:

1) Utility patents may be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof;

2) Design patents may be granted to anyone who invents a new, original, and ornamental design for an article of manufacture; and

3) Plant patents may be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant.

Clearly software isn’t a plant patent, and most software can’t possibly be considered a design patent. That leaves utility patents.  Chapter 10 of Title 35, United States Code says the term “process” means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material. Miriam Webster dates the origin of software to 1958, which is long after these laws were written. Which leaves us with lots of weasel words.

Patent Laws

The Constitution of the United States gives Congress the power to enact laws relating to patents, in Article I, section 8, which reads “Congress shall have power . . . to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Under this power Congress has from time to time enacted various laws relating to patents. The first patent law was enacted in 1790. The patent laws underwent a general revision which was enacted July 19, 1952, and which came into effect January 1, 1953. It is codified in Title 35, United States Code. Additionally, on November 29, 1999, Congress enacted the American Inventors Protection Act of 1999 (AIPA), which further revised the patent laws. See Public Law 106-113, 113 Stat. 1501 (1999).

The patent law specifies the subject matter for which a patent may be obtained and the conditions for patentability. The law establishes the United States Patent and Trademark Office to administer the law relating to the granting of patents and contains various other provisions relating to patents.

Novelty And Non-Obviousness, Conditions For Obtaining A Patent

In order for an invention to be patentable it must be new as defined in the patent law, which provides that an invention cannot be patented if: “(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent,” or “(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country more than one year prior to the application for patent in the United States . . .”

It has to be new, no prior art. 

If the invention has been described in a printed publication anywhere in the world, or if it was known or used by others in this country before the date that the applicant made his/her invention, a patent cannot be obtained. If the invention has been described in a printed publication anywhere, or has been in public use or on sale in this country more than one year before the date on which an application for patent is filed in this country, a patent cannot be obtained. In this connection it is immaterial when the invention was made, or whether the printed publication or public use was by the inventor himself/herself or by someone else. If the inventor describes the invention in a printed publication or uses the invention publicly, or places it on sale, he/she must apply for a patent before one year has gone by, otherwise any right to a patent will be lost. The inventor must file on the date of public use or disclosure, however, in order to preserve patent rights in many foreign countries.

 It can’t be publicly disclosed or made for sale prior to the application date plus on year.

Even if the subject matter sought to be patented is not exactly shown by the prior art, and involves one or more differences over the most nearly similar thing already known, a patent may still be refused if the differences would be obvious. The subject matter sought to be patented must be sufficiently different from what has been used or described before that it may be said to be nonobvious to a person having ordinary skill in the area of technology related to the invention. For example, the substitution of one color for another, or changes in size, are ordinarily not patentable.

Non-obviousness is where the fun begins 😉


Business of Software

What an ISV (Independent Software Vendor) sells isn’t the software itself, but the right to use. The rights, and restrictions, of both the vendor and the user are spelled out in the software license agreement. By definition that agreement will strike some balance between granting users sufficient privileges to use the software, while preserving the vendor’s rights of ownership.

Given how it’s up to the software license agreement to protect an ISV’s crown jewels, you’d think every book written about the business of software would at least mention the subject. You’d be wrong. As business people we’ve failed to educate ourselves and abandoned this in the purview of lawyers, thereby granting the lawyers incredible control over our businesses.

I don’t mean to pick on my colleagues, but here’s a quick review of the literature.

No, or virtually no mention of software license agreements:

  • Eric Sink on the Business of Software by Eric Sink
  • Software That Sells : A Practical Guide to Developing and Marketing Your Software Project by Edward Hasted
  • Guide to Software Export: A Handbook for International Software Sales by Roger A. Philips
  • How To Succeed In The Enterprise Software Market by Craig Le Clair
  • Micro-ISV: From Vision to Reality by Bob Walsh
  • The Business of Software: What Every Manager, Programmer, and Entrepreneur Must Know to Thrive and Survive in Good Times and Bad by Michael A. Cusumano
  • Joel on Software by Joel Spolsky

A brief discussion:

  • Copyright Your Software by Stephen Fishman

The only detailed discussion I’ve found (currently on backorder from Amazon):

  • Web & Software Development: A Legal Guide by Stephen Fishman

The Original Patent Troll

Bless YouTube. Check out The Original Patent Troll, an excerpt from a 1994 educational video. Much funnier than what patent trolls have turned into. See the Yahoo Patent Troll.

Empirical Evidence that Software Patents Stiffle Innovation

In a direct lift from Brad Feld’s Brad Feld’s(fixed link) recent post, a pointer to Slashdot’s post that that a Critic of Software Patents Wins [the] Nobel Prize in Economics. “One recent subject of Professor Maskin’s wide-ranging research has been on the value of software patents. He determined that software was a market where innovations tended to be sequential, in that they were built closely on the work of predecessors, and innovators could take many different paths to the same goal. In such markets, he said, patents might serve as a wall that inhibited innovation rather than stimulating progress.”

Brad’s found a bunch of other resources I’ll add to the links page.

How Software Patents Work

This video is hysterical, even without the across-the-pond pronunciation of PAY-tent.

I’m consolidating links on the links page, so you won’t have to search the blog entries.

Software patents are evil

Our attorney claims that software patents will not go away in either of our lifetimes. I want to prove him wrong.