Quotulatiousness

April 30, 2013

Barnes & Noble files a great argument for reforming the patent system

Filed under: Business, Law, USA — Tags: , , , — Nicholas @ 15:22

At Techdirt, Mike Masnick has to restrain himself from just quoting the whole B&N submission to the Federal Trade Commission and the Department of Justice:

As Groklaw notes, the B&N filing is clear, concise and highly readable. It outlines the problem directly:

    The patent system is broken. Barnes & Noble alone has been sued by “non practicing entities” — a/k/a patent trolls — well over twenty-five times and received an additional twenty-plus patent claims in the last five years. The claimants do not have products and are not competitors. They assert claims for the sole purpose of extorting money. Companies like Barnes & Noble have to choose between paying extortionate ransoms and settling the claim, or fighting in a judicial system ill equipped to handle baseless patent claims at costs that frequently reach millions of dollars.

As they point out clearly, even when they have a very strong case — either when they don’t infringe and/or when the patent is bogus, a lawsuit is incredibly costly in terms of time, money and effort.

    In the current system, patent trolls overwhelm operating companies with baseless litigation that is extremely costly to defend. Patent cases generally cost at least $2M to take through trial, and frequently much more. Litigating, even to victory, also entails massive business disruption. Companies are forced to disclose their most sensitive and top-secret technical and financial information and must divert key personnel from critical business tasks to provide information and testimony. The process is exceptionally burdensome, especially on technical staff. Document discovery and depositions seem endless.

    Patent trolls know this and as a result, they sue companies in droves and make settlement demands designed to maximize their financial take while making it cheaper and less painful to settle than to devote the resources necessary to defeat their claims. The current system lets them do so even with claims that are unlikely to prevail on the merits. That is because, whether win lose or draw, the rules effectively insulate trolls from negative consequences except perhaps a lower return than expected from any given company in any given case. They can sue on tenuous claims and still come out ahead. And so the broken system with its attendant leverage allows trolls to extract billions in blackmail from U.S. companies and, in the final analysis, consumers.

One of the great things about the filing is that it reminds the FTC and the DOJ of the constitutional underpinnings of patent law — not that patents are required or guaranteed, but that their purpose is to promote the progress of the useful arts. If that is not happening, then the use of patents in such a manner should be seen as unconstitutional.

February 21, 2013

Reason.tv: How Patent Trolls Kill Innovation

Filed under: Business, Law, USA — Tags: , , , — Nicholas @ 00:01

“My statement to someone that is the victim of a patent troll lawsuit is that you are completely screwed,” says Austin Meyer, who is himself the target of a so-called “patent troll” lawsuit.

Meyer is a software developer and aviation enthusiast. His two passions intersected in the ’90s when he created a flight simulator called X-Plane, which quickly grew in popularity, outlasting even the once-popular Microsoft Flight Simulator. As many software developers do, Meyer made his application available on mobile devices like the iPhone and Android. And this is where he first ran into trouble.

A company called Uniloc has sued Meyer for patent infringement over a patent called, “System and Method for Preventing Unauthorized Access to Electronic Data.” When a computer runs a paid application, one way that developers can assure that a customer has actually purchased the application is by coding the application to match a license code with an encrypted database. This is a method that most paid applications on the Android market use. It’s a method that Meyer argues has been in use since at least the late ’80s. This is the idea that Uniloc claims to own.

December 9, 2012

Verizon attempts to patent creepy targeted ad delivery technology

Filed under: Business, Media, Technology — Tags: , , — Nicholas @ 11:02

Verizon wants your TV to carefully observe you so it can deliver ads tailored for whatever activity you might be doing:

The U.S. Patent Office has delivered a “non-final” rejection of a Verizon patent application for a controversial technology that would have served targeted ads to TV viewers based on what they might be doing or saying in front of their sets.

[. . .]

The patent in question has been the subject of intense media scrutiny since FierceCable uncovered it last week. Verizon’s somewhat laboriously titled the patent application “Methods and Systems for Presenting an Advertisement Associated with an Ambient Action of a Use.”

The application says the technology would be capable of triggering different advertisements depending on whether a viewer or viewers might be eating, playing, cuddling, laughing, singing, fighting or gesturing in front of their sets. Specifically, the patent covers technology that can serve ads “…targeted to the user based on what the user is doing, who the user is, the user’s surroundings, and/or any other suitable information associated with the user.”

Privacy? You don’t need that, because we need to sell you shit.

November 26, 2012

End software patents

Filed under: Business, Law, Technology — Tags: , , , — Nicholas @ 11:15

Marginal Revolution writer and George Mason economics professor Alex Tabarrok argues for an end to software patents.

November 17, 2012

A new low in patents?

Filed under: Bureaucracy, Law, Technology, USA — Tags: , , , — Nicholas @ 10:35

Apple has patented the “page turn”:

If you want to know just how broken the patent system is, just look at patent D670,713, filed by Apple and approved this week by the United States Patent Office.

This design patent, titled, “Display screen or portion thereof with animated graphical user interface,” gives Apple the exclusive rights to the page turn in an e-reader application.

Yes, that’s right. Apple now owns the page turn. You know, as when you turn a page with your hand. An “interface” that has been around for hundreds of years in physical form. I swear I’ve seen similar animation in Disney or Warner Brothers cartoons.

(This is where readers are probably checking the URL of this article to make sure it’s The New York Times and not The Onion.)

November 4, 2012

Rethinking software patents

Filed under: Business, Law, Technology — Tags: , , , , , — Nicholas @ 00:01

Software patents are becoming a clear and present danger to innovation:

The basic problem being that there are so many patents, covering so many things, that the system is in danger of eating itself like Ourobouros.

    When Dan Ravicher of the Public Patent Foundation studied one large program (Linux, which is the kernel of the GNU/Linux operating system) in 2004, he found 283 U.S. patents that appeared to cover computing ideas implemented in the source code of that program. That same year, it was estimated that Linux was .25 percent of the whole GNU/Linux system. Multiplying 300 by 400 we get the order-of-magnitude estimate that the system as a whole was threatened by around 100,000 patents.

    If half of those patents were eliminated as “bad quality” — i.e., mistakes of the patent system — it would not really change things. Whether 100,000 patents or 50,000, it’s the same disaster. This is why it’s a mistake to limit our criticism of software patents to just “patent trolls” or ”bad quality” patents. In this sense Apple, which isn’t a “troll” by the usual definition, is the most dangerous patent aggressor today. I don’t know whether Apple’s patents are “good quality,” but the better the patent’s “quality,” the more dangerous its threat.

It’s near impossible to develop new software when there are so many such patents out there. Further, even if you tried to get clearance (or signed up to licenses and so on) to use them it would be near impossible.And we do need to recall what the purpose of a patent system is. No, it isn’t to provide and income to those who create inventions. That’s only the proximate aim: the ultimate aim is to maximise the amount of invention and innovation.

The economics of patents accepts that there is a tradeoff here. Yes, we’d like people who come up with useful new things to make money. Because that incentivises people to work on coming up with interesting new things to all our benefit. However, we also want people to be able to create derivative innovations and inventions. If our protection of the original inventors is too strong then we limit this. What we want is a system that hits the sweet spot, of encouraging the maximum amount of both, original and derivative. The problem of course being that to encourage one we weaken the incentives to do the other, either way around.

October 8, 2012

Legal weapons of mass destruction

Filed under: Business, Law, Technology — Tags: , , , , — Nicholas @ 11:19

Software patents: two words that probably should not go together at all.

Mr. Phillips and Vlingo are among the thousands of executives and companies caught in a software patent system that federal judges, economists, policy makers and technology executives say is so flawed that it often stymies innovation.

Alongside the impressive technological advances of the last two decades, they argue, a pall has descended: the marketplace for new ideas has been corrupted by software patents used as destructive weapons.

[. . .]

Patents are vitally important to protecting intellectual property. Plenty of creativity occurs within the technology industry, and without patents, executives say they could never justify spending fortunes on new products. And academics say that some aspects of the patent system, like protections for pharmaceuticals, often function smoothly.

However, many people argue that the nation’s patent rules, intended for a mechanical world, are inadequate in today’s digital marketplace. Unlike patents for new drug formulas, patents on software often effectively grant ownership of concepts, rather than tangible creations. Today, the patent office routinely approves patents that describe vague algorithms or business methods, like a software system for calculating online prices, without patent examiners demanding specifics about how those calculations occur or how the software operates.

As a result, some patents are so broad that they allow patent holders to claim sweeping ownership of seemingly unrelated products built by others. Often, companies are sued for violating patents they never knew existed or never dreamed might apply to their creations, at a cost shouldered by consumers in the form of higher prices and fewer choices.

October 2, 2012

Making a case to abolish the patent system

Filed under: Law, Technology — Tags: , , — Nicholas @ 08:54

At Techdirt, Mike Masnick summarizes a recent study of the benefits and drawbacks of the current patent system:

Over at The Atlantic, Jordan Weissmann has a great article covering the latest paper from economists Michele Boldrin and David Levine […], which argues why it might make sense to abolish the patent system entirely, even while admitting that patents may have some benefits in some cases. You can read the full paper here (pdf) where it makes “the case against patents.” While this may sound similar to Boldrin and Levine’s earlier works, this one goes further, and is definitely worth the read. In effect, they argue that not only do patents rarely help innovation, but, even worse, the existence of patents (even where they help) will only lead to the system being expanded to where they do more harm than good:

    The initial eruption of small and large innovations leading to the creation of a new industry — from chemicals to cars, from radio and TV to personal computers and investment banking — is seldom, if ever, born out of patent protection and is, instead, the fruits of highly competitive-cooperative environments. It is only after the initial stages of explosive innovation and rampant growth end that mature industries turn toward the legal protection of patents, usually because their internal grow potential diminishes and the industry structure become concentrated.

    A closer look at the historical and international evidence suggests that while weak patent systems may mildly increase innovation with limited side-effects, strong patent systems retard innovation with many negative side-effects. Both theoretically and empirically, the political economy of government operated patent systems indicates that weak legislation will generally evolve into a strong protection and that the political demand for stronger patent protection comes from old and stagnant industries and firms, not from new and innovative ones. Hence the best solution is to abolish patents entirely through strong constitutional measures and to find other legislative instruments, less open to lobbying and rent-seeking, to foster innovation whenever there is clear evidence that laissez-faire under-supplies it.

September 11, 2012

Manufacturers may follow the music industry pattern

Filed under: Business, Law, Liberty, Technology — Tags: , , , , , — Nicholas @ 00:03

An interesting article in The Economist:

As an expert on intellectual property, Mr Weinberg has produced a white paper that documents the likely course of 3D-printing’s development — and how the technology could be affected by patent and copyright law. He is far from sanguine about its prospects. His main fear is that the fledgling technology could have its wings clipped by traditional manufacturers, who will doubtless view it as a threat to their livelihoods, and do all in their powers to nobble it. Because of a 3D printer’s ability to make perfect replicas, they will probably try to brand it a piracy machine.

[. . .]

As with any disruptive technology — from the printing press to the photocopier and the personal computer — 3D printing is going to upset existing manufacturers, who are bound to see it as a threat to their traditional way of doing business. And as 3D printing proliferates, the incumbents will almost certainly demand protection from upstarts with low cost of entry to their markets.

Manufacturers are likely to behave much like the record industry did when its own business model — based on selling pricey CD albums that few music fans wanted instead of cheap single tracks they craved — came under attack from file-swapping technology and MP3 software. The manufacturers’ most likely recourse will be to embrace copyright, rather than patent, law, because many of their patents will have expired. Patents apply for only 20 years while copyright continues for 70 years after the creator’s death.

[. . .]

In that, the record industry was remarkably successful. Today, websites and ISPs have to block or remove infringing material whenever they receive a DMCA takedown notice from a copyright holder — something that happens more often than actually justified. Google reckons that more than a third of the DMCA notices it has received over the years have turned out to be bogus copyright claims. Over a half were from companies trying to restrict competing businesses rather than law-breakers.

Rallying under the banner of piracy and theft, established manufacturers could likewise seek to get the doctrine of “contributory infringement” included in some expanded object-copyright law as a way of crippling the personal-manufacturing movement before it eats their lunch. Being free to sue websites that host 3D design files as “havens of piracy” would save them the time and money of having to prosecute thousands of individuals with a 3D printer churning out copies at home.

September 7, 2012

Jesse Kline: Consumers the biggest losers in Apple-Samsung battle

Filed under: Business, Law, Technology — Tags: , , , , — Nicholas @ 00:07

In the National Post, Jesse Kline points out that the grubby legal dispute between Apple and Samsung may end up hurting the consumer much more than either of the combatants:

Software is unique because it is covered under both copyright and patent law. Computer software is written in a human-readable language, called source code, that is then translated by the computer into something the machine can understand. Much like writing a book, or newspaper article, source code is automatically covered under copyright law.

But no one is alleging that Samsung copied Apple’s code. What Samsung was sued for was achieving the same outcome as Apple, even though it was done in a different way. In this literary world, this would be akin to someone being sued for violating the copyright on Harry Potter, just because they wrote their own story about a boy wizard.

Intellectual property laws are supposed to encourage innovation by allowing companies and individuals to profit off works that may have cost a significant amount of money to develop. Apple says it was undercut in price because its competitor simply copied its design. In actual fact, Android was cheaper to produce because it is based on the open source Linux operating system, which saved money compared to Apple proprietary system.

For its part, Samsung accuses Apple of resorting “to litigation over market competition in an effort to limit consumer choice.” It’s one thing for the legal system to protect new inventions and original works, but this is quite clearly a case of a company engaging in anti-competitive behaviour.

August 27, 2012

Finland and the dangers of being a company town

Filed under: Business, Economics, Europe — Tags: , , , , , — Nicholas @ 09:09

I had no idea that Finland’s economy was so tightly tied to the fortunes of Nokia:

Nokia contributed a quarter of Finnish growth from 1998 to 2007, according to figures from the Research Institute of the Finnish Economy (ETLA). Over the same period, the mobile-phone manufacturer’s spending on research and development made up 30% of the country’s total, and it generated nearly a fifth of Finland’s exports. In the decade to 2007, Nokia was sometimes paying as much as 23% of all Finnish corporation tax. No wonder that a decline in its fortunes — Nokia’s share price has fallen by 90% since 2007, thanks partly to Apple’s ascent — has clouded Finland’s outlook.

[. . .]

Strip these sorts of firms from the list and only one resembles Nokia: Taiwan’s Hon Hai, an electronics manufacturer. Yet Nokia made 27% of Finnish patent applications last year; the corresponding figure for Hon Hai was 8%. Although numbers are falling, Finland is home to the greatest number of Nokia employees; Hon Hai’s staff is mostly in China. It is a similar story with other firms. Sales of Nestlé, a consumer-goods company, weigh in at 15% of Swiss GDP but its share of Swiss jobs is punier than Nokia’s in Finland. Samsung, whose revenues are twice Nokia’s, has half its clout as a share of GDP: South Korea’s economy is more diversified. The importance of Nokia to Finland looks like a one-off.

August 19, 2012

ESR on the limits of “lawfare” for Apple

Filed under: Business, Law, Technology — Tags: , , , , , , — Nicholas @ 15:56

To put it mildly, ESR isn’t a fan of Apple’s lawfare approach to competition:

It’s beginning to look like Apple’s legal offensive against Android might backfire on it big-time. Comes the news that Judge Koh has declined to suppress evidence that Apple may have copied crucial elements of the iPad design from prototypes developed by Knight-Ridder and the University of Missouri in the mid-1990s.

Those of us aware enough of computing history to be aware of early work by XEROX PARC and others have always been aware that Apple’s claims of originality were highly dubious. Apple’s history is one of adroit marketing and a facility for stealing adapting ideas from others, wrapping them in admittedly excellent industrial design, and then pretending that all of it originated de novo from the Cupertino campus.

The pretense has always galled a little, especially when Apple’s marketing created a myth that, footling technical details aside, the whole package somehow sprang like Athena from Steve Jobs’s forehead. But it didn’t become intolerable until Apple began using lawfare to suppress its competition.

The trouble with this is that there’s actually a lot of prior art out there. I myself saw and handled a Sharp tablet anticipating important iPhone/iPad design tropes two years before the uPhone launch, back in 2005; the Danger hiptop (aka T-Mobile Sidekick) anticipated the iPhone’s leveraging of what we’d now call “cloud services” in 2002-2003; and of course there’s the the Sony design study from 2006, described by one of Apple’s own designers as an important influence.

If only Apple were honest about what it owed others…but that cannot be, because the company’s strategy has come to depend on using junk patents in attempts to lock competitors out of its markets.

July 7, 2012

Tim Worstall: the software patent system is FUBAR’ed

Filed under: Business, Law, Technology — Tags: , , , , , , — Nicholas @ 11:05

In Forbes, Tim Worstall explains the odd situation of Amazon trying to obtain patents to use defensively when (not if) they get sued for entering the smartphone market:

… Amazon isn’t searching out patents which would allow it to build phones to, say, the GSM or CDMA standards. For those patents, by virtue of being included in those standards, must be made available to all comers on reasonable and non-discriminatory terms (RAND, or Europeans add “Fair” to the beginning to give FRAND). So any patent that is actually necessary to make a phone that interacts with the network is already available to them on exactly the same terms that Samsung, Apple, Nokia or anyone else pays for them.

No, what Amazon is looking for is just some bundle of patents, somewhere, that have something to do with mobile telephony. So that when (and sadly, it really is when, not if) they get sued by someone or other for breaching a patent then they’ve got some great big bundle of documents that they can wave back at them. Such patents can range from the possibly valid (slide to unlock perhaps) through to two that really irk me: Apple claiming a patent on a wedge shaped notebook and, unbelievably to me, on the layout of icons on the Galaxy Tablet in Europe.

I take this to be evidence that the technology patent system has simply got out of hand: that the system is entirely Fubar in fact. We need to recall what a patent is supposed to do: it is not that intellectual property is some God given right. Rather, we realise that given that ideas and technologies are public goods it is very difficult to make money out of having invented them. Thus we artificially create intellectual property in the form of patents and trademarks. But we are always walking a narrow line between encouraging invention by awarding such rights and discouraging derivative inventions by awarding rights that are too strong.

May 24, 2012

Losing big to (potentially) win small

Filed under: Law, Technology — Tags: , , , , — Nicholas @ 07:50

ESR on what might be the “beginning of the end” for patent warfare:

It’s all over the net today. As I repeatedly predicted, the patent claims in the Oracle-vs.-Java lawsuit over Android have completely fizzled. Oracle’s only shred of hope at this point is that Judge Alsup will rule that APIs can be copyrighted, and given the extent of cluefulness Alsup has displayed (he mentioned in court having done some programming himself) this seems rather unlikely.

Copyright damages, if any, will almost certainly be limited to statutory levels. There is no longer a plausible scenario in which Oracle gets a slice of Android’s profits or an injunction against Android devices shipping.

This makes Oracle’s lawsuit a spectacular failure. The $300,000 they might get for statutory damages is nothing compared to the huge amounts of money they’ve sunk into this trial, and they’re not even likely to get that. In effect, Oracle has burned up millions of dollars in lawyers’ fees to look like a laughingstock.

Of course, even if this is the beginning of the end, there will be lots of lawyers encouraging their clients to go down this route, as even if it’s not successful, it can be a very lucrative journey for the lawyers.

March 23, 2012

Software patents: a legal minefield with no accurate maps

Filed under: Economics, Law, Technology — Tags: , , — Nicholas @ 10:33

In the Atlantic, Timothy B. Lee explains why most software companies are effectively ignoring the patent system:

A major reason for the recent explosion of patent litigation is that it’s hard for software firms to figure out which patents they’re in danger of infringing. There are hundreds of thousands of software patents in existence, with more than 40,000 new ones issued each year. Indeed, in a recent paper, Christina Mulligan and I estimated that it’s effectively impossible for all software-producing firms to do the legal research, known as a “freedom-to-operate” (FTO) search, required to avoid infringing software patents — there simply aren’t enough patent attorneys to do the work. That’s a major reason why most software firms simply ignore the patent system.

One of the striking things about the patent debate is vast gulf between the views of computer programmers on the one hand and patent attorneys on the other. Steve Lundberg is a patent attorney and blogger who mentioned our paper in a blog post exploring the challenges of performing FTO searches in the software industry. I don’t want to pick on Lundberg, because I think you’d get similar arguments from many patent lawyers. But his post shows a fundamental lack of understanding of how the software industry works.

I work in the software industry (although not as a programmer), and I’ve lost count of the number of times I’ve seen software patents granted for things that clearly do not meet the stated criteria for granting patents. It could be a geeky party drinking game: guess whether a particular common programming technique or decades-old user interface element is patented or not, take a drink when you guess wrong. It’d be educational, although guessing “patented” every time might leave you stone cold sober at the end of the party.

As a matter of patent theory, Lundberg is absolutely correct. Patent law’s novelty and obviousness requirements are supposed to narrow the scope of patent protection. But in practice he’s dead wrong. The patent office issues a seemingly endless stream of patents on broad, obvious concepts like emoticon menus, one-click shopping, and wireless email.

And the existence of these broad, obvious patents means that software companies are constantly infringing each other’s patents by accident. The companies with the largest patent portfolios, such as Microsoft and IBM, have tens of thousands of patents, allowing them to credibly threaten almost anyone in the software industry. Even Yahoo, with its relatively modest cache of 1000 patents, was able to find ten patents to assert against Facebook.

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