Musing on software patents

Since part of my purposefully broad mission includes education, I thought this would be a great time to discuss the topic of software patents.  On Friday, August 24th, the patent infringement case between Apple and Samsung wrapped up with a resounding victory for Apple.  So, I thought I’d take a couple paragraphs to discuss what software patents are, followed by what the real game and implications of this ruling will likely be.

Diagram from Unisys patent #4558302

But first, a couple comments: I hold a couple software patents.  I did most of my real innovation prior to the year 2000.  In today’s environment, I’d likely have had several more patents, since when I was developing software, the emphasis was more on collaboration with others in my industry rather than protecting IP for your employer.   Frankly, I really preferred those collaborative days, but its like pining over the US going back to the gold standard.  The genie is out of the lamp!

The other comment is that I’m personally OK with Apple winning the suit.  Look-n-feel and ease-of-use is what makes Apple products appealing to consumers.  There should be some protection.  However, I’m very concerned about collatoral damage to innovation if it stands on appeal.

So, what is a software patent?  It’s a term that identifies innovations (or “devices”) that have been conceived, designed and implemented via the programming of a computer or computing device.   From a legal perspective, the word software has no meaning per se, since a patent is simply a patent.  Wikipedia has a very good description of what they are and the issues around them in the article on software patents.  Software patents are one important part of the larger term Intellectual Property (or IP).  IP also includes trade and service marks and other intangible ownership rights.

A classic software patent that has provided it’s owner significant return on their investment was the 1983 Unisys patent  4558302 on the compression technology that underlies the Graphics Interchange Format or GIF picture format.  In my opinion, this particular patent is in the spirit of what patent protection is all about.  The authors devised a compression algorithm that enabled practical storage of large numbers of photographs.   BTW: This particular patent is highly controversial in the software community, due to the way Unisys handled the patent, not the merits of the patent itself.  Sadly, it’s become the poster child for the anti-patent movement.

The heart of the problem is the fact that it’s very difficult to delineate the attributes that make a legitimate  patentable innovation, since the patent process was designed around something that is easy to touch and examine.  Software is ephemeral, which makes it difficult to present to the patent examiner exactly what is unique about the innovation, so there is a tendency to focus on the effect of the innovation and not the design that made it possible.  It’s encouraging “innovators” to patent trivial designs, many of which are not that innovative.  An example is the shadow around a graphical element that gives the element a 3-D look.

As I mentioned, I hold software patents, yet I’m very conflicted by them.  I do feel that it’s crucial that intellectual property be protected.   IP protection does fuel innovation since it permits innovators to monetize their investment.   Though the perception is that all it takes is a few folks a few weeks to produce software, the fact is to produce high quality software for the mass market or enterprise costs 10s to 100s of millions.  Also, in the consumer space, look-n-feel or how the device works and feels to the owner is as important as its functionality.  Couple that with the fact that its relatively easy to reverse engineer software and basically steal the innovation for a fraction of the cost to develop it originally, and the value of IP protection is clear.

However, the implications of this suit have raised the stakes significantly, escalating the arms-race between the big boys in technology in a game of mine is bigger than yours.  For the past couple of decades, the real game hasn’t been individual patents, but the size a given company’s patent portfolio vs. it’s competition or partners.   Basically, I’m infringing on your patents, you’re infringing on mine, but because I own 2x the number of patents, you owe me licensing fees.   Note that the quality of the individual patents doesn’t effect the overall value of the portfolio.

Since the game is volume over protection of individual innovations, the cost to develop/acquire a large portfolio of patents is very expensive.  Also, the cost of defending against patent infringement is very expensive and can run into the million of dollars.   These costs are outside the ability of the small, entrepreneurial companies that drive the most significant technical innovation.

So, in my opinion, the environment around innovation has been warped in a manner that has made it much more difficult for small companies to safely monetize their investment.   Though I’m concerned that innovation will be stifled,  I’m more concerned that the companies betting the farm by developing the next new thing will be able to a build business around that innovation, without having it acquired or co-oped by the big boys.

Oct. 8th update  — See the following article in the New York Times for an excellent and comprehensive take on this topic.



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