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For one thing:The insanity of software methord patents

Challenges and Strategy - Email Memo
Bill Gates
May 16, 1991
http://www.theworld.com/obi/Bill.Gates/Challenges.and.Strategy
QUOTE
Category 3
----------

This is a category of challenges we face that I don't feel are widely
recognized.

PATENTS: If people had understood how patents would be granted when most
of today's ideas were invented, and had taken out patents, the industry
would be at a complete standstill today. I feel certain that some large
company will patent some obvious thing related to interface, object orientation,
algorithm, application extension or other crucial technique. If we assume this
company has no need of any of our patents then the have a 17-year right to take
as much of our profits as they want. The solution to this is patent exchanges
with large companies and patenting as much as we can. Amazingly we havn't
done any patent exchanges tha I am aware of. Amazingly we havn't found a
way to use our licensing position to avoid having our own customers cause
patent problems for us. I know these aren't simply problems but they deserve
more effort by both Legal and other groups. For example we need to do a
patent exchange with HP as part of our new relationship. In many application
categories straighforward thinking ahead allows you to come up with
patentable ideas. A recent paper from the League for Programming Freedom
(available from the Legal department) explains some problems with the
way patents are applied to software.
UNQUOTE

The 1991 paper from The League for Programming Freedom can be found here
http://lpf.ai.mit.edu/

It should be noted that complex cross licensing arangements are increasingly becoming a legal quagmire. Microsoft is facing a number of lawsuits from companies which Microsoft did enter into a formal relationship, for example Timeline Inc
http://www.theregister.co.uk/content/53/29419.html
SCO is also suing IBM based upon the exact same class of legal cross licensing relationship that Bill Gates suggested as a solution to patents back in 1991.

While software patents remain a threat to the entire software industry, including Linux...
http://www.pcworld.com/news/article/0,aid,114458,00.asp
..., many companies, including IBM, HP, SUN, Oracle, SAP and Novell are turning to a simpler form of cross licensing arrangement - the GNU General Public License, or GPL and LGPL.

Those IBMers you spoke to, come from a company with the largest patent portfolio and legal intellectual property department in the entire industry. Yet increasinly it is becoming difficult to source new software without tripping up on other vendors software patent portfolios.

In 1981 US courts ruled that software and business methord could, without legislation ot the contrary, could be patented.

From 1981 to 1989, with a few exceptions the entire software industry just ignored the issue of software patents. As Bill Gates rightly stated " If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today". The Silicon valley revolution would not have taken place. From 1991 to 1997, the major software vendors slowly began entering into cross licensing arrangements, just as Bill described, and most of the smaller vendors still ignored the issue entirely.

From 1997 on, driven by the greed of the Venture capitalists of the DotCom era, vendors and other groups began gobbling up businesses based not upon the current business viability, but the so-called intellectual property the business held. Most in the software industry still ignored these third party parasites.

Most of the methords and software used within and on Linux predates this 1997 era. There is plenty of prior art to point to. Due to the GPL licensing granting downstream users the right to use and redistribute, most companies are better off using Linux...
http://www.newsforge.com/os/03/05/31/1244201.shtml

Still software patents are a bad thing for the entire industry. Applying game theory to long term markets based on software patents...

1) Small sofware developers are unlikely to benefit from payments from licensing of their software patent portfolio, since competing software vendors are just as likely to hold other software patents that the developer uses in his own products.

2) Large sofeware vendors are unlikely to benefit from payments from licensing of their software patent portfolio, as per above small sofware developers plus the software vendor is likely to hold the lion's share of the sofware target market, profit from oftware patent licensing will be much smaller proportion than overall sales of it's own products.

3) Third party intellectual property "holding companies", that do not actively participate in selling actual software, are the only class of organization that can benefit from licensing of their software patent portfolios. But these parasitic entities to not actively help in the development of the science or art of sofware.

Software and business methord patents do not promote the art and ongoing development of the entire software industry.

Posted by: David Mohring   Posted on: 01/29/04 You are currently: a Guest | Members login | Terms of Use

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