I've long taken a dim view of software patents. I wrote this piece as far back as 2003, arguing that Europe should avoid copying the American approach to software patents, both because they are unnecessary to spur innovation and because it would be useful for Europe to demonstrate why.
There are nuances to my view. I've noted - repeatedly - that one advantage of patents is that it provides useful cover for small companies and / or individuals so that they can compete with larger companies without fear their ideas will be copied wholesale. IBM might not exist today if not for a little patent on tabulation machines that Mr. Hollerith filed in 1889 during the early days of his company.
Unfortunately, the costs of software patents outweigh the benefits, by my reckoning, and it all comes down to the problem of the "stackable" nature of ideas. If I were to patent, say, a unique design for an electric sewing machine, that sewing machine idea wouldn't find its way into farm equipment, or military hardware, or be among one of the many patents used by manufacturers of a new process for making plastic dolls. Traditional patents tied to a particular implementation had a pretty narrow domain of infraction. If you had a sewing machine patent, industry segments outside that of sewing machines would be largely unaffected.
Not so software patents. The proposed $1.5 billion fine a jury has awarded Alcatel to recompense them for supposed violations by Microsoft of a patent related to MP3 audio compression (even though Microsoft paid $16 million to the Fraunhofer institute, the organization they THOUGHT had the right to license them) is so high because they concluded that Windows as a whole infringed, and hence, every copy of Windows sold since 2003 is considered in violation. Windows, as a general purpose software platform, isn't like a sewing machine. It's a sewing machine, a sherman tank, a doll making process plus much else combined.
The risk clearly isn't confined to Microsoft. Every iPod ever sold has support of MP3. Texas Instruments has chips where the compression technology is constructed in hardware. Heck, any vendor who has written MP3 codecs are potential infringers.
It's safe to say that the ramifications of the MP3 compression patent are worse than the fallout from UNISYS' late decision to enforce its patent on LZW compression, the technology used in GIF files (compression seems to be a recurring patent problem). GIF, though popular, was hardly the de facto standard for images on web pages. The solution, quite simply, was to stop using GIF...at least in places UNISYS could see. MP3, however, is the de facto audio software standard (though others do exist, but MP3 is far more established than GIF ever was). On a continuum of "badness," what would be worse than the MP3 patent would be if Alcatel stepped forward with a patent on a critical portion of the TCP/IP networking standard.
This, in a nutshell, is the problem with software patents. Software ideas are frequently built on or around other software ideas, and they frequently get mixed up with other types of software ideas in ways a sewing machine hardware idea would not get mixed up with a toaster idea. Playing back music is one of those fundamental functions humans will do whether they are driving a Sherman tank, using their sewing machine or writing a spreadsheet. That means music-related software ideas have a potential to wreak havoc in many segments of the marketplace.
Start to imagine how many software ideas are used in a single program, and imagine that each and every one of them could have been potentially a patented idea. Software development could easily be brought to a screeching halt were even small numbers to be owned by aggressive patent owners.
If such ideas would not be developed in the absence of patents there would be some justification for the damage. As I explained in that article from 2003, however, it is in the nature of software to require new ideas, and they are generated and reused at such a rapid pace that they MUST happen whether or not patents exist if you do any kind of software at all. All patents do is insert extreme risk into the software development process, as there are so many potential patents that any kind of software is at risk.
Personally, I think this verdict will get overturned, as it seems insane to penalize companies who are following the rules. Microsoft thought they were properly licensing the patents for MP3, and it seems weird to claim they really didn't just because there is a late-developing difference of opinion between Fraunhofer and Alcatel over who, exactly, gets to charge companies for the right to use the package of patents associated with MP3. Whatever the case, I wonder if this is causing Microsoft executives to think long and hard whether to use their now considerable lobbying power in Washington, D.C. to get patent laws changed (I say "now considerable," as before the antitrust case filed against them in 1998, Microsoft spent almost no money on government lobbying).
Consider the case of EOLAS. Losing the case with EOLAS has forced Microsoft to do goofy things in IE to activate embedded controls because EOLAS, apparently, owns the "idea" of software plugins in user interfaces (or is it just web browsers, I'm not sure; I could look it up, but that would waste two minutes of my life looking up something completely stupid). That cost Microsoft $520 million, or about a third of the amount Alcatel was just awarded for this "infringement."
I never thought this would be the case, but there may be Microsoft executives sitting in offices in Redmond right now hoping that the current case being argued in the Supreme Court that pits Microsoft and its ally, the Free Software Foundation (yes, hell has frozen over) against AT&T will overturn the foundation for software patents in America.
Wouldn't that be interesting. Alcatel wins a $1.5 billion judgement, only to have the verdict overturned because software patents are declared invalid by the Supreme Court.
Not likely, unfortunately, but one can dream.
[Side Note: Does it seem weird to anyone else that a jury would decide a case like this? I see some sense to juries in criminal case (though modern forensic science makes even that difficult), but in cases poring over the finer points of patent law?]