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Worthwhile memo to read, remembering that it's dated four years before Windows 95.
The section quoted leaves out the development of his point:
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 they have a 17-year right to take as much of our profits as they want.
[The key observation. Patents are a business weapon, used to obtain money for licensing fees for essential, even "obvious" aspects of software.
This almost contradicts his "industry ... at a complete standstill" point in the first paragraph. There's no indication Microsoft would not continue to move forward, but would have to pay "some large company" while advancing.
He's talking about a parasite on profits, and not an obstacle to action.]
The solution to this is patent exchanges with large companies and patenting as much as we can. Amazingly we haven't done any patent exchanges that I am aware of. Amazingly we haven't found a way to use our licensing position to avoid having our own customers cause patent problems for us.
[The response is for Microsoft to have patents of its own, to be able to exchange rather than to pay.
Patents are a fact of life, and profits must be protected.]
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 straightforward 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.
http://www.bralyn.net/etext/literature/bill.gates/challenges-strategy.txt
["literature" indeed; reparagraphed and a few typos fixed]
I didn't find the final part of the quote given above,
(A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose. That price might be high: Established companies have an interest in excluding future competitors.)
and I think the copy I read is correct because a number of other references to the memo on various sites, including a number opposed to Microsoft, link to this copy of the memo.
The use of patents as a source of revenue to patent holders and an obligation to be avoided by potential payers, even the effect on start-ups is a separate topic from the protective aspect of patents. Offense is different from defense.
It would seem very unlikely for Bill Gates as I have read about him to say that taking ideas at whim is good for the software industry. - Posted by: Anton Philidor Posted on: 09/21/06 You are currently: a Guest | Members login | Terms of Use
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