Patents – Why They Exist, And Why They Possibly Shouldn’t Exist

As an aside, my thanks to PJ for her article ‘Who Should See the Film ‘Patent Absurdity’? – Pick Your Brain‘ which inspired this. Also my thanks to the makers of the film ‘Patent Absurdity‘ which can be watched online or downloaded freely here. Note that you will need Firefox or another browser that can handle OGG files to watch it online. If you download it the best option for watching it is VLC (neither Windows Media Player nor Apple Quicktime are capable of working with open standards for some reason – you should ask Microsoft and Apple why).

Patents are another interest of mine. I’ve been following the arguments for and against software patents in the United States and European Union closely. In the United States at the current time software is patentable due to a change in case law. In the European Union a recent court case in Germany has made software patentable (see this article by Florian Mueller). In Canada software cannot be patented, and the courts have been very definite on this as has the Canadian Intellectual Property Office.

I’m a cynical old bastard – and that’s the polite way of putting it. The first question I always ask is who is stealing from whom? Let’s take a look.

First we need to define what a Patent is. From Wikipedia we get:

The word patent originates from the Latin patere, which means “to lay open” (i.e., to make available for public inspection), and more directly as a shortened version of the term letters patent, which originally denoted an open for public reading royal decree granting exclusive rights to a person.

In simple terms a patent is a trade by society – society gives the patent holder an exclusive right to manufacture the patented device for a period of time, while the patent holder discloses how the device is made and works. Exact details vary from jurisdiction to jurisdiction. The World Intellectual Property Organization is attempting to standardize the rules worldwide. ACTA is an attempt by certain countries to bypass the WIPO, so that they can enact rules that are more favorable to them.

Modern Patent Law can be traced back to the Statute of Monopolies of 1623. Again I’m going to quote Wikipedia:

The Parliament of England‘s Statute of Monopolies of 1623 (21 Jac. 1, c.3) provided strict rules on the circumstances in which the first inventor of a given item could be given exclusive rights to that invention, provided that it was not “contrary to the law nor mischievous to the state by raising prices of commodities at home, or hurt of trade, or generally inconvenient”.

The Statute of Monopolies is now seen as the origin of patent law respectively.[1] It was introduced in the reign of James I in response to abuse of the previous system whereby the king could grant of arbitrary monopolies for the production of particular goods or the provision of particular services by letters patent to the detriment of commerce. The act attempted ineffectively to mitigate the many previous grants of monopolies of trade.

The first such monopoly was granted in England to an innovator was by Henry VI in 1449 to the inventor of a new technique for the the manufacture of stained glass.

As it says above, one of the major reasons that patent law was standardized was so that ‘arbitrary monopolies’ couldn’t be granted. Say that somehow I gain a patent on table salt, even though it’s been in use for thousands of years. That patent would be an unearned license to print money, since I didn’t invent table salt, and that’s one of the things that patent law is designed to prevent.

The legal profession (specifically the ‘Patent Bar‘) has a vested interest in how the patent system works, just like any other specialists will have a vested interest in the laws that effect their field of endeavor. Some patent lawyers are trying to expand the range of patentable items. The usual reason stated is that without patent protection no one will expend resources in Research and Development, and that innovators deserve to make a profit. Through court cases such as State Street Bank v. Signature Financial Group they have attempted (and sometimes succeeded) in expanding the range of patentable items. One case that is very important to the U.S. Patent Bar is in re Bilski wherein the Supreme Court of the United States has agreed to hear a patent case. Depending upon the ruling, it could either expand or contract patentable subject matter in the United States.

At the same time, many large companies have a vested interest in patent law. Consider Steve Ballmer’s recent claim that Android isn’t free. The company that Steve Ballmer heads, Microsoft, has been filing a lot of patents recently. His argument in respect to Android, is that they’ve patented key technologies that Android has to be using. If Steve Ballmer is right, Android is infringing on Microsoft’s patents. But are Microsoft’s patents valid? Microsoft’s patents are mostly related to software. If the Supreme Court decides that software patents are not valid, then Microsoft has just wasted a lot of money on patents that aren’t valid.

And there’s also various technology consortiums like MPEG LA. MPEG LA holds a variety of patents which cover video display among other things, and licenses them to technology companies. But what do those patents really cover? If the patent is for a hardware system to display video, and someone builds a software implementation to display video, does the software implementation infringe the patent? Since the two implementations are totally different, legally it is hard to see how a software implementation could infringe a hardware patent, as differing hardware implementations are often ruled not infringing (for example if a hardware patent used platinum as a component, and a differing implementation used palladium, the palladium implementation would not infringe – and yes, I know of a case where this was the ruling). MPEG LA is claiming that it would infringe. Since MPEG LA appears ready to test this in court, and defending patent suits in the United States usually costs several millions of US dollars, it is possible that MPEG LA could win by running their target out of money. While this sort of action may be legal, it may not be ethical. However ethics are one of the things that the law of the United States seems to have not considered. Of course MPEG LA may be distracted at present, since they are facing Antitrust Allegations in the United States.

In the United States the following text from Section Eight the Constitution forms the basis of patent law and copyright

The Congress shall have power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

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;

The stated reason is to ‘promote progress’. The question is whether or not the current patent law regime in the United States promotes or impedes progress? My sometime sparring partner and member of the patent bar, Gene Quinn, is of the opinion that an exceptionally strong patent law does indeed promote progress. Ronald Riley, founder of the Professional Inventors Alliance, also favors extremely strong patent law protection. Both are of the opinion that software should be patentable.

Most software engineers don’t agree. Richard Stallman, one of the truly elite software developers has spoken out many times about the dangers of software patents. Curiously those most in favor of software patents appear to be lawyers from the Patent Bar.

This is the end of Part One, Part Two is to follow.


Wayne Borean

Thursday May 27, 2010

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