The Problems with Software Patents

By James Kwak

Charles Duhigg and Steve Lohr have a long article in the Times about the problems with the software patent “system.” There isn’t much that’s new, which isn’t really a fault of the article. Everyone in the industry knows about the problems—companies getting ridiculously broad patents and then using them to extort settlements or put small companies out of business—so all you have to do is talk to any random group of software engineers. And it’s not as much fun as the This American Life story on software patents, “When Patents Attack!” But it’s still good that they highlight the issues for a larger audience.

The article does have a nice example of examiner shopping: Apple filed essentially the same patent ten times until it was approved on the tenth try. So now Apple has a patent on a universal search box that searches across multiple sources. That’s something that Google and other companies have been doing for years, although perhaps not before 2004, when Apple first applied. There’s another kind of examiner shopping, where you file multiple, similar patents on the same day and hope that they go to different examiners, one of whom is likely to grant the patent.

According to law professor Jay Kesan, things are fine as they are: “If someone gets a bad patent, so what? You can request a re-examination. You can go to court to invalidate the patent.” But Kesan must know the costs of patent litigation—potentially tens of millions of dollars for a trial that goes on for years, which can easily swamp a startup’s budget. And in the meantime, corporate customers will be uneasy about buying a product that could be enjoined because of twelve random people in Delaware. Duhigg and Lohr profile Vlingo, a voice-recognition company that won against a patent infringement suit brought by Nuance, its larger competitor—but sold out to Nuance rather than have to pay for four more similar suits.

Vlingo’s founder since decided to quit the voice recognition field—his area of scientific expertise—because of the legal landscape. I would have serious second thoughts about starting another software company today, given what I know about software patents. How is that good?

The bad news, if you need any more, is that we only have one patent system. And much as software people hate it, pharmaceutical people like it—or, rather, they want to make it even easier to get and use patents. Since pharma outweighs software in Washington, change is unlikely to happen anytime soon.

23 responses to “The Problems with Software Patents

  1. Yo-ho! Hoist the jolly roger!

    Croak!

  2. I’ve linked you over at FDL. In the post, I commented, “It is no longer possible to start a software company with a good idea; you will will be sued out of existence.”

    Over, I suppose, to Richard Stallman, who has been writing and talking about this for decades.

    Maybe China has the right idea.

  3. The obvious solution is to have multiple patent systems. If the “software people” wanted their own system for software patents, the “pharmaceutical people” should not care. Much.

  4. Nemo, what makes you think pharmaceutical industry patents are any less anti-competitive than software patents?

  5. The NYT article does not describe “examiner shopping” by Apple. There was only a single patent application which was rejected multiple times. After each rejection the applicant has the right to file a formal response or amendment to address the concerns of the examiner. However, after two rejections, the USPTO requires an applicant to make a “request for continued examination” (RCE). Such a request requires the applicant pay a fee, which is currently about $1000, to compensate the USPTO for additional examination time. However, unless the examiner leaves the patent office, the case is stays with the same examiner after filing a RCE. Under normal circumstances, the patent claims are narrowed each with each formal response to a rejection. A patent that was only allowed after 10 amendments is likely to be quite narrow. As a patent attorney, my opinion is clearly slanted, but this does not seem at all abusive of the USPTO process. While most cost conscious clients wouldn’t keep beating a dead horse, some large companies like Apple seem more concerned about the number of patents they receive regardless of how narrow they are.

  6. It is interesting that the Republican Party in general, and Rep. Ryan in particular, who scream so loudly about “lawsuit abuse,” are preventing the reform of “patent abuse.” http://eideard.com/2011/09/16/congress-fix-our-broken-patent-system-republicans-said-no/

  7. It doesn’t matter how narrow the text of the patent is if a case can be won based on the patent. That’s why firms like Apple, without a significant research capability, work so hard to accumulate patents.

    And if you are not a large firm with an arsenal of patents, or not litigious? Why, then like Armstrong (frequency modulation), Eckert and Mauchly (the stored program computer), and Mr. Ricci, you are shut out. Even if you get a patent, the legal resources of large firms will often be sufficient to break it. Without the resources of a large firm, there is so much risk in entering a market it becomes hard for small firms to even fund work. The always-skittish venture capitalists will shy away.

    Also over to PJ at http://www.groklaw.net/

    Where does this stop? Do we eventually get to the state of affairs where one is not even permitted to publish research in areas where there are patents?

  8. The NYT article does not describe “examiner shopping” by Apple. There was only a single patent application which was rejected multiple times. After each rejection the applicant has the right to file a formal response or amendment to address the concerns of the examiner. However, after two rejections, the USPTO requires an applicant to make a “request for continued examination” (RCE). Such a request requires the applicant pay a fee, which is currently about $1000, to compensate the USPTO for additional examination time. However, unless the examiner…………

    ….Say what? Oh, so that explains it.

    Man, I was shopping the other day, I usually leave the shopping cart at the end of isle and walk the isles for the items I need. I had to go around corner this one time to find my item and when I came back someone had dumped my stuff on the floor. And there were 2 big guys standin near by, and I said, hey man you threw my stuff on the floor man, whats with that? They said “Oh we don’t anything about that, but that’s my cart”.
    …And then they got in my face about it,.. I want to tell you something man, I was SCAred.

    Stand up, act two!

  9. The Problem with Blogs
    The New York Times spends a lot of money to have reporters go out and do reporting, fact checkers, editors, etc
    The blogger takes all this work for free, and expects a tip in his tip jar.
    That sound fair to you ?

  10. The times starts with a sob story about Mr Phillips an Vlingo.
    AFAIK, the Times doesn’t ask a basic question: when Mr Phillips started, did he do due diligence ?
    This is a basic, beginner first step: if you think you have a better widget – say for voice recognition software – you go thru the exisiting patents, and see what is already out their.
    And what you find, is that it is very, very very rare that your new widget is really different from everything else out there; you almost alwasy find that there is already a boatload of exisitng patents.
    At which point you have to make a basic business decision: is your product really different, and *can you license* the already existing patents that are out their.
    As for the fights between the big boys – Samsung, Apple et al, what will almost certainly happen in ayear or two, as happened many years ago in metallurgy and carmaking, is that all the big guys will cross license to each other; each will have a stable of patents, and no one can proceed without a license to all the different stables

  11. Has anyone noticed that there is a lack of innovation and new products ?
    right, I thought so – there is no lack of new products; quite the opposite; we are inundated with new products almost on a second by second basis

    (as a PhD molecular biology, I will assert that the problem in drugs has nothing whatsoever to do with patents, it has to do with our lack of knowledge about the human body; we know a lot, but we know only a small fraction of what we need to make drugs safely.
    For instance, when you can take a small molecule drug candidate (say <1,500 daltons) and do ADME in silico, or dock the molecule to the set of human extracellular receptors, then you can make drugs easily)

  12. A few years ago a patent issued for a “novel” data structure. It is a linked list. It wasn’t new when I learned about it from a Sophomore-level computer science text in 1982.

    And don’t get me started on the patent on playing with a cat with a laser pointer!

    Broken beyond repair.

  13. This place is going to commandeered in the process of turning swords back into ploughshares:

    http://www.wired.com/threatlevel/2012/03/ff_nsadatacenter/all/

    WE THE PEOPLE built it, and we’re going to use it for health care, housing, education, and insuring a permanent place in society for citizens – AKA a “job”. People have the RIGHT to make their lives less miserable through HONEST WORK. HONEST WORK provides for a rich and varied life of culture and security. People who climb up the achievement ladder will be those who consistently solve the problems of sustainable living through real progress.

    SCIENCE in service to humanity is a GOOD thing :-)

    The Jim Jones Jonestown portion of the “program” is over.

  14. Colbert, Armstrong did his due diligence. So did Eckert and Mauchly. If you are small and have an idea that some really wealthy firm wants your idea, it will be stolen from you.

    And, yes, as an energy researcher I have noticed a crying lack of innovation in critical areas. Patents are problematic in other ways: they are more usually used to block innovation than encourage it. I know of specific instances where large firms preferred to bury a disruptive innovation than produce it. It is largely because Bell Labs and Xerox PARC did not effectively defend their intellectual property that modern computing exists at all: everything that Apple now produces relies on innovations developed at those places. Had those firms defended their IP, it seems likely that modern computing would have waited for another generation, if it developed at all.

    It is a wonder that anything at all new gets done in this legal environment!

  15. You should may be stick to your area of expertise and not make broad general statements about an area you clearly don’t know enough about. Sure, the patent system is not perfect, what man-made system is? But the iPhone for example, would not have been made without it. Nor the screen you are reading this on. It generally works quite well when compared with other systems. Maybe we should count our blessings that we do live in a country of laws, even if they aren’t perfect. There must be other areas that are more worth your time.

    Lets worry about the big issues. and maybe the ones you know more about.

  16. For a possible solution to this problem see at InfoWorld “The software patent solution has been right here all along” at http://www.infoworld.com/d/open-source-software/the-software-patent-solution-has-been-right-here-all-along-202299 . The article summarizes Mark Lemley’s July paper “Software Patents and the Return of Functional Claiming” at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2117302 .

  17. “The article does have a nice example of examiner shopping: Apple filed essentially the same patent ten times until it was approved on the tenth try. So now Apple has a patent on a universal search box that searches across multiple sources. That’s something that Google and other companies have been doing for years, although perhaps not before 2004, when Apple first applied. There’s another kind of examiner shopping, where you file multiple, similar patents on the same day and hope that they go to different examiners, one of whom is likely to grant the patent.”

    Dogpile was doing that a dozen years ago. It’s the software equivalent of patenting the wheelbarrow.

  18. raven
    lets stipulate to the idea that a large firm can trample you wiht money and lawyers.
    If there are no patents, won’t it be worse ???

    “bury disruptive innovation…”
    was that patents or markets (pace the innovators dilemma)

    I think i agree with your last point about PARC, but am not sure – I thought modern computing was because visicalc was free, but I’m really not an even an informed observer, let alone someone who knows anything..

  19. “That’s something that Google and other companies have been doing for years, although perhaps not before 2004″

    And Apple filed as inventor in 2004 so when the patent issues issues Apple’s rights in the innovation are immediately recognized. Nothing Google did post 2004 can change this, Google is practicing somthing that Apple invented.

    The Times makes much to do about the fact that Apple’s patent application had been rejected, rewroked and reargued several times. So what? That happened with nearly every patent that has issued.

  20. Interested readers may wish to check out ‘The Case Against Patents’, a working paper from the research division of the Federal Reserve Bank of St. Louis.: http://research.stlouisfed.org/wp/2012/2012-035.pdf

  21. Interesting article to follow up with over at Ars Technica, talking about Lodsys, a non-practising entity (NPE) or “patent troll”, which is approaching independent developers for “licensing fees” for patented ideas. [http://arstechnica.com/apple/2012/10/lodsys-claims-momentum-in-patent-fight-as-some-indie-devs-leave-us/]

    A couple of quotes from the founder of the anti-NPE group, Appsterdam:

    “Every non-American organization trying to unseat Silicon Valley as the world leader in technology production should be popping champagne” over Lodsys’ continued claims, Lee said. “More patent madness means more talent flowing into Europe, which is great, because it means we can start using our embassies to kick some of that over to countries like Greece and Italy who could definitely use the work.”

    “[T]he fact that any new technology coming out of the US is immediately infected by parasites like Lodsys means you’d have to be insane to launch anything significant there.”

  22. Big Mamma (“The mother of all search engines”) built a search box that searched across multiple sources in 1996. Apple’s patent is a theft of other people’s work.

  23. #1– As pointed out above, this is not Examiner forum shopping. The same examiner handled the app the whole time.

    #2– Delay in getting a grant is very often due to the Examiner. Examiner’s get paid by the number of times an application is rejected. As a consequence, many examiners draw out examination as long as possible. They read the application once, do a search, find a number of references. The first rejection will cite the weakest of the references. If the Applicant overcomes that first reference, a second rejection is issued citing the second-strongest reference. This process continues and the examiner ends up getting paid multiple times for a single search.

    #3– #2 does indeed skew the patent system in favor of the big boys. They have the cash to suffer the indignities. Small inventors have neither the cash nor the sophistication to survive this process.

    #4– A patent is most economically useful to the small guys– and most likely to lead to investment and risk taking when held by the small guys. Put yourself in the shoes of a small inventor. You have an idea and are trying to decide whether to invest money in it/seek investment capital/etc.
    If you get a patent, that exclusive right gives you some breathing room to raise funds and start up your business. It reduces your risk and leads to investment that benefits society.

    #5– On the other hand, when Apple files a patent application, the product has already been developed and is likely coming off the assembly line pretty soon. They’ve already made the investment. There is little additional risk taking on their part. The patent merely supplements their first mover advantage as a barrier to entry.

    If the patent system is broken or not encouraging innovation, it is because of this cycle.