The benefits of patents

The benefits of patents

Summary: Richard Stallman doesn't like the proposed EU directive which would legalize software patents in the European Union. That's not surprising, because the software libre movement he founded and the software license, the GPL, he wrote aim to remove all entanglements from the software development process, whether based on a secret (proprietary source code) or on patented algorithms.

SHARE:
TOPICS: Patents
79

Richard Stallman doesn't like the proposed EU directive which would legalize software patents in the European Union. That's not surprising, because the software libre movement he founded and the software license, the GPL, he wrote aim to remove all entanglements from the software development process, whether based on a secret (proprietary source code) or on patented algorithms.

I've written about software patents at least twice in the past (here and here), and in both cases came out strongly against them. Software patents can be a big stumbling block in the software development process, as there are many ways to accidentally stumble across them. For small companies, that can be a hindrance, and for large companies, an expensive proposition.

On the other hand, as I've also noted, there are real, substantive advantages to patents, including of the software sort. Though I've argued that the costs of software patents (slower idea churn, a barrier to small companies, etc.) outweigh the benefits which follow, that doesn't make them any less beneficial.

Benefit #1: Boost to small business: Software patents can be the bedrock upon which small companies are founded. Starting a company is hard. Small companies have difficulties getting noticed by customers, but that's often a function of money, and money is hard to come by unless you have something with which to convince investors that your market won't be immediately entered by hundreds of new entrants. They want to know that those millions they give you aren't going into a very deep well.

Patents are a great way to do that, as patents give you a time-limited monopoly on an idea. Herman Hollerith acquired an early "business process" patent relating to the encoding of data as a series of punched holes which served as the foundation for his new company, "Tabulating Machine Company" (1896) that was the predecessor to IBM. Similarly, RSA Security got its start on now-expired patents on the algorithms used in public key cryptography. (You couldn't use SSL without it.)

These companies acquired the traction they needed to build their business from patents. That matters, at least if you think corporations matter.

Benefit #2: R&D: Spending large amounts of money on a new technology can be risky if that technology is expensive to develop but easy to copy. That's the argument used in the medical drug industry. Why spend large amounts of money making a drug if the design can be determined in five minutes using spectrum analysis and copied by every mom-and-pop pill manufacturer in the world by the end of the week?

Patents create a safe zone within which to make such investments, thus boosting R&D laws in much the same way that corporate bankruptcy laws create a safe zone for entrepreneurship.

Benefit #3: Knowledge Dissemination. RSA Security had the incentive to popularize the use of public key encryption algorithms because they were the ones who generated all the revenue as a result of that use. Patents also have high disclosure requirements, meaning that every aspect of the innovation must be detailed so that others can use it.  Though I question how strong an advantage this is in practice, it is useful to consider alongside the other two benefits.

These are all benefits that make sense if you believe corporations are important to the software development process. I think it's safe to say, though, that Stallman is no fan of corporations. Stallman including the interests of corporations in any debate on open source would be like Grover from Sesame Street expounding on Nietszche.

Stallman has shaped this debate in religious terms and turned it into a battle of absolutes, which makes it very hard for him to pose an adequate response to the benefits previously enumerated. If companies aren't important, then the "costs" of denying access to software patents are minimal. 

That might work for the party faithful, but it doesn't for the EU Commission, and that's why they are about to pass a directive legalizing software patents.


John Carroll has delivered his opinion on ZDNet since the last millennium. Since May, he's been a Microsoft employee.

Topic: Patents

John Carroll

About John Carroll

John Carroll has delivered his opinion on ZDNet since the last millennium. Since May 2008, he is no longer a Microsoft employee. He is currently working at a unified messaging-related startup.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

79 comments
Log in or register to join the discussion
  • Of course Stallman is anti-business

    The guy's a freakin' Marxist. Just listen to him rant for five minutes.

    Patents are essential for the progress of invention. The issue is not patents, but patenting things that are obvious to anyone in the field or that could easily be deduced. This is running rampant in software because few patent officers know what is and what is not obvious in software.
    baggins_z
    • Lets review your comment

      "but patenting things that are obvious to anyone
      in the field or that could easily be deduced"

      Everything! is obvious once is showed but before
      that? isn't. Keep that in mind.

      Software patent generally speaking to me is
      absurd. Software automate manual and/or
      repetitive process effectible and efficiently.
      Source code could and must be protected, but
      pretending that you own invention rights over
      ie. Conducting a "Search" is ridiculous.
      mabricen
  • The EU issues software patents now.

    There are at least 30,000 issued. The change being voted on clarifies, it doesn't authorize.

    Why should software companies have pushed so hard for patents that they worked diligently to get around language intended to prevent them?

    Simple.
    Software companies are selling ideas. Copyright doesn't work well, because it protects only a particular expression of an idea, and not the idea itself.

    The first thing to recognize in any discussion of software patents is that they are essential to a profit-making business.

    Which makes Mr. Stallman's opposition to them even more comprehensible.
    Anton Philidor
    • Re: EU

      [i]There are at least 30,000 issued. The change being voted on clarifies, it doesn't authorize.[/i]

      Yes, though that's mostly due to differences in patent laws in member countries. Germany, if I remember correctly, is fairly loose from a patent standpoint, whereas the UK isn't. This directive would just set a common policy across all the EU, and what the FFII is trying to do is use it as a way to block software patents permanently (well, as permanently as anything in politics is).

      [i]Software companies are selling ideas. Copyright doesn't work well, because it protects only a particular expression of an idea, and not the idea itself.[/i]

      And that's a good point. Of course, patents can be given out too freely, and they can be one heck of a club (witness their use by Eolas, a company with nothing but a patent to its name and a very large legal team). Still, we already accept that knowledge based markets such as drug manufacturing need patents, why not software?

      It all comes down to cost/benefit analysis, and depending on what mood I'm in, my opinion shifts one way or the other. THis IS a complex issue, and it's not as black and white a case as some partisans in the debate would wish us to believe it is.
      John Carroll
      • The EU patents are from the EU patent office.

        I wasn't thinking about national patent laws, but you're right about that being another good reason for clarification.

        IP by itself is worthwhile. Think of the engineering companies that research with no expectation of producing the product. The licensing funds the research.

        The sale of IP to an IP company is still a way of returning the cost of the research. That Eolas exists is not the problem. That the internet may be hugely disrupted by what appears from here a not very robust patent is the problem.

        The system for evaluating patents should be cleaned up, though with the recognition that it's better to grant reasonable patents than to decline marginal applications.

        Patents are the reward for innovation for many in the circumstances of a large software industry.
        Anton Philidor
      • Deep water John

        Viagra....

        How many pills exists before it???? NONE, so Pfizer run as fast as it could and patented it. Viagra was an invention.

        In order to invent Viagra, Pfizer use a process
        call Scientific method.

        http://en.wikipedia.org/wiki/Scientific_method

        Problem would have been if Pfizer tried to patent the Scientific Method which produced Viagra.

        Precicely Scientific Method is an idea, a process of how to conduct science research.
        mabricen
      • Re: Re: EU

        [i]Still, we already accept that knowledge based markets such as drug manufacturing need patents, why not software?[/i]

        Because there's a huge difference between software and drugs.

        A drug manufacturer can spend several years and a billion dollars [i]per patented drug[/i].

        Contrast that to a company like Microsoft setting a goal of obtaining 3,000 patents per year. That's more than 10 per working day. And that's just one company.

        When it sets a goal of 10 patents a day for a year, we really have to wonder just how much "investment" each represents. And more to the point, whether it would do exactly the same thing if there were no software patents.

        Remember, patents are to encourage innovation. A drug company wouldn't make the investment if it could be easily copied afterward. The software industry, on the other hand, has demonstrated patents aren't needed to innovate. So why have them?


        .
        none none
    • Essential

      [i]The first thing to recognize in any discussion of software patents is that they are essential to a profit-making business.[/i]

      For each of: Microsoft, Novell, Symantec, Computer Associates, and Lotus Development please answer two questions:

      1) When did $COMPANY acquire its first software patent?
      2) How profitable was $COMPANY prior to that time?
      Yagotta B. Kidding
      • That argument doesn't matter

        While you are correct that not having patents does not stop you from having profit making business but this isn't about a making businesses profitable but more about making businesses more profitable.

        Is that a bad thing? I think that's up for debate. Personally I'm on the fence there.
        voska
        • Marginal values

          [i]this isn't about a making businesses profitable but more about making businesses more profitable.

          Is that a bad thing? I think that's up for debate.[/i]

          In classical economics the ideal profit is just enough to keep the company going. In the case of patents, the social contract is that the reward for invention is just enough to make sure the inventor doesn't chuck the whole business and take up topiary.
          Yagotta B. Kidding
          • True

            But in this day and age where many are looking to retire on investment money the idea of profit being just enough to keep the company going doesn't sound so good.

            Personally I think the whole stock market doesn't make sense. I mean how can you judge a corporation as sucessful only if grows year after year and base the success on the amount it grows. Isn't make 1.4 Million profit year after year better?
            voska
  • court of engineers

    Justice may be blind, but there is no saying it
    has to be stupid as well. Technological
    advancement needs to be judged by those who can
    understand it, meaning that after (0r before)
    that 8 years of legal training, patent judges,
    clerks or whoever is taking the applications and
    making decisions should be trained in what they
    practice. I don't want judge judy making a
    decision on my software patent, she's just not
    qualified.
    pesky_z
  • Acknowledging problems with patents.

    Yes, using a patented idea can cost money. And yes it introduces legal matters into technology.

    But at this point software is big business. No different from any other big business. Idealizing the garage programmer is like idealizing the family farmer, a sentimental attachment to the past. (I share both attachments, but I know that the people who work for software companies can be damaged if I try to put my sentimentality into action.)

    Compare science businesses. The low tech discoveries have mostly been made. New discoveries are going to be costly and time-consuming. Requiring full time effort for a long time.

    Same with software.

    For the major functions, the easy programs have been written. The elaborations are difficult.

    And in this business, sales and distribution require substantial resources. The argument that software has provided all the functional advantages it can provide is widely accepted.
    Software has to be created, distribution arranged, and then buyers sold opn the idea that the software has enough advantages to be worth owning.

    Some of the variants of open source are an anomaly here.
    They hit the cheap - low functionality niche that, for instance, Microsoft is using Longhorn to foreclose.
    They also can be distributed because certain users seek them out.
    But the same advantages that make them popular also mean they cannot easily be the basis for a business.
    Using Linux as an example, with SuSE draining away after the Novell purchase, Red Hat is becoming the predominant supplier. Their total market capitalization is (what?) $2.1 billion, which is approximately Microsoft's profit in (maybe) a month.

    Open source is an anomaly, a small anomaly.


    For a big company able to handle legal expenses, patents are not an insuperable problem.

    Yes, small companies benefit, but small companies are not much more significant in the software business than open source these days.

    You should think of patents as an ordinary concomitant of doing business in the way software companies now do business.


    Quoting:
    Software patents can be a big stumbling block in the software development process, as there are many ways to accidentally stumble across them. For small companies, that can be a hindrance, and for large companies, an expensive proposition.
    Anton Philidor
    • Don't let No_Ax hear you say that!

      "Yes, small companies benefit, but small companies are not much more significant in the software business than open source these days."

      He has a small software company that he thinks is very significant :)

      (No offense meant towards ya' No_Ax)
      Patrick Jones
    • I agree, at least in part.

      No doubt about it, patents are a two edged sword. My company could not prosper with out them, and they also place road bolcks up. As you said, it's all just part of doing business.

      Would I like to see patent reform? Of course I would, in fact even the big players want it and have suggested changes that would make teh process much better. The question is, will Congress do it???
      No_Ax_to_Grind
    • Yes, open source is an anomaly. But why?

      I think your arguments against the profit and wage draining nature of open source software are compelling. However, one thing I've never seen you address is why such and unexpected thing would happen. After all, in what other industry do highly skilled tradesman form groups in order to compete to offer their services for free?

      I would argue that only in the case of an artificial limit on a market will you see this kind of bizarre behavior happening. If the market were clearing, there wouldn't be this surplus of software developers vying to ply their trade, even for free.

      Due to it's very nature, software is prone to monopoly due to it's high fixed costs (R&D), and near zero marginal costs (cost to produce another copy), and the desire of customers to go with a "standard" once perceived. Depending on how they are managed, software patents could either help or exacerbate this situation. If I believed they helped the market clear, I'd be all for them. Who knows, maybe someone (perhaps you) will offer a compelling argument which will change my mind.

      Either way, I honestly think that Linux and other open source software is actually a byproduct of an anticompetitive software market, which patents likely helped create.
      enduser_z
      • A salient aspect of software programming:

        People enjoy writing it.

        They get to solve interesting problems, and have the feeling that what they've done makes life better for others. It's also a bravura display of skill, and makes the writer a respected part of a community of people who like to do the same thing.

        Why do people farm, given the low returns and intense labor. We're dealing with some fundamental emotions and drives.

        Of course people have long written free software. It's appreciated and admired, and in some cases have provided the building blocks for major industries that employ many, when it has been adapted to commercial use.

        But...

        Software as a business is in the big company stage of its development.

        Even those who guided (I'd say directed) free software as substantial projects recognized this.

        In order to obtain the credibility, distribution, and use, the attention the software deserved, they made a deal with large companies.

        When you wrote about "a byproduct of an anticompetive software market", I believe you're thinking about about the need to work away from the priorities and direction and authority of software factories. (Compare factory farms.)
        The irony here is that a worse tyrant than Microsoft, IBM, had to brought in to make all this programming available, implemented.

        And so, in a manipulative way, IBM and its co-conspirators have made a lot of open source part of their strategy. A cheap part to the customer and, more significantly from their perspective, to them.

        To me, all that open source has proven is that an industry at this stage of its development will have only a few powerful players.

        (This discussion concerns only part of open source, of course. The part that involves usage by many businesses and people. The part where profits are possible.)
        Anton Philidor
        • Not unique to Software.

          "They get to solve interesting problems, and have the feeling that what they've done makes life better for others. It's also a bravura display of skill, and makes the writer a respected part of a community of people who like to do the same thing."

          This is very true, but not unique to software. Mechanics (auto, motorcycle, etc) are the same way, as are many others. Many mechanics love what they do, and would do it even if not paid. The difference is, they don't have to. Drive down the street, and you are very unlikely to see competing signs like "Try our free tune up; the best free tune up in town!". If I ever see signs like this popping up around town, I'll know the auto repair market is not competitive. Just because people love what they do, doesn't mean they prefer to work for free verses being paid (ironically, your point too I think).

          My father used to run a garage and his best mechanic would volunteer for a team at the local race track. However, this was very different than what we see in Software. He wasn't volunteering to be a Formula One pit crewman (after all, in many areas Open Source is the closest competitor to MS). He already had a paying job in his chosen profession. It was more of a true hobby.

          Regarding your points on the desire to move away from the "direction and authority of software factories", this isn't what I had in mind. In fact, the strange thing is SW developers are volunteering (even competing) to join software factories. Large software projects are complex, and require strict organization. Open source may have a different approach to this organization, but it is clearly organized.
          enduser_z
  • I saw the title on the main page

    and knew it had to be a John Carroll commentary :)

    Benefit #1: Boost to small business. How does a small company protect itself against a large preditor? A small business would not be able to survive a lengthy court battle trying to enforce its patent.

    Benefit #2: R&D. Since we are talking about software patents, do you have any examples of software that required an extensive amount of R&D? There is a big difference in R&D for medicine and software.

    Benefit #3: Knowledge Dissemination. Yes, that is a good thing about patents. But the same information could be given through white papers, research papers, blogs, etc. It is true that companies would not be forced to give that information, but it would not take long for others to find it out and disperse the knowledge.

    There are two problems I have with software patents. First, time. They last too long for the software industry. Second, obviousness. Too many patents are given for obvious "inventions" and then it is left for the public to foot the bill of proving them invalid. If these two things could be resolved I think myself, and many others, would not have a big problem with software patents.
    Patrick Jones
    • Fond of the obvious as I am...

      ... as a way to fill pages and demonstrate insight and knowledge, I think that some people give the obvious too much credit.

      When looking at an idea, saying "That was easy" shouldn't be a reason to deny credit.

      Similarly, when considering prior art, some coincidental resemblance between some tentative coding and a fully formulated concept should not be disqualifying.

      So, I think that deciding an idea is obvious or the subject of prior art should be a careful decision, with the presumption in favor of acceptability.

      In short, a good system testing patents might acceptably produce more new patents than you expect.
      Anton Philidor