Toward a Better Patent System

Another topic that I have written a lot about here on Continuations are patents and in particular software patents. While there is a lot of reform that I would love to see I have also come to appreciate that sometimes the only way to get there is in small steps. One relatively meaningful step was just introduced by Senator Schumer. The basic idea is to allow for a much fast tracked review of many of the suspect business process patents used by patent trolls to sue startups and larger tech companies. Because of changes in the interpretation of patent law many of these fast track reviews have a good shot at invalidating the patents. For a more detailed comment on this proposal, please read Nick Grossman’s post over at USV.

Ask Patents: Peer Progressive Agenda At Work

Earlier this week I blogged about Steven Johnson’s wonderful new book Future Perfect, which lays out the Peer Progressive agenda.  I am therefore particularly excited about yesterday’s launch of AskPatents, a collaboration between the USPTO and our portfolio company StackExchange.  Joel Spolsky has a great blog post up on the StackExchange blog explaining the origins of and motivation behind AskPatents.  

The basic idea is to access the broadest network possible to find prior art.  Instead of relying solely on underfunded and overworked examiners, anyone can now contribute prior art.  This was made possible by a provision in the America Invents Act, which lets independent third parties contribute prior art.

It is exciting to see this system at work — someone already provided an interesting link to a highly relevant publication by Opera several days before Apple filed for their double-tap to zoom patent. I hope that AskPatents not only will help prevent more  inane software patents from being granted but also to invalidate some of the existing ones out there.

Yay for Independent Judges Going After Software Patents

Growing up in Germany I learned a lot about a legal system in which judges are only applying the law not also making it through their decisions.  Precedent plays a very limited roll in the German system.  It took me some time to come to grips with the US system.  But now I have come to think that an independent judiciary that has the ability to influence the law through precedent is a wonderful balance to the executive and legislative branches.  In this 4th of July week this is another independence that’s worth celebrating!

It’s been great to see independent judges at work with regard to patents in the Oracle versus Google case and now the Apple versus Motorola (now also Google) case.  Even better is to read that Judge Posner is fundamentally questioning the need for patents in many industries.  This is very encouraging. We have to keep in mind why patent legislation was created in the first place: as a way to encourage innovation at a time and in circumstances when the cost of innovation was high.  This is essentially a way to solve a market failure.  But we don’t have an issue of “under innovation” in software.  With open source and the web we have found other ways to provide incentives for software innovation.  And now we need to weigh the consumer cost much more heavily.  That’s exactly what Posner is calling for.

Yahoo Facebook Patent Battle: Mobilizing Engineers

If Yahoo had any shred of credibility left with developers then it has succeeded in destroying that with its misguided patent lawsuit against Facebook.  But the suit isn’t all bad.  It has the potential to become a catalytic event for broader social awareness of the perils of software patents, similar to how the SOPA/PIPA battle moved copyright and its enforcement into more of a mainstream issue.  That was sort of the gist of Mark Cuban’s post.

The first group of people who should really start to get engaged are engineers. After all, they are the one’s whose work becomes — as Andy Baio put it — “weaponized” in the hands of corporations.  A first step here might be to change how patent assignment works.  Engineers at a startup could require that assignment is made only for defensive purposes instead of unconditionally. This would prevent the kind of fate that befalls so many of the patents when companies are either acquired, get into trouble or fail (and their patents are acquired by a non-practicing entity, better known as a troll).

As another approach (albeit one that might take more time to construct), companies could assign their patents to a pool that would be used for defensive purposes only.  RPX does something along those lines but seems to be geared at big corporations and in RPX’s case the patents are still available for offensive purposes as well (at least as far as I know).

Between mobilizing developers and approaches to peer producing research to invalidate patents, I believe it is possible to build enough outside pressure on the system to achieve some real change.

Patents and the Growing Anti-Commons

The patent wars have really been heating up.  For some time now Apple has been going around trying to get various Android devices off the market based on patent claims.  Now the shoe is on the other foot as a court in Germany has found in favor of Motorola Mobility against Apple based on a patent.  Of course Motorola Mobility is in the process of being acquired by Google so that its trove of patents can be used in the fight against Apple and others.  Apple is reaping what it has sowed.  And in the last few days it has become clear that Apple has been punching both above and below the belt.  Not only has Apple has sold or licensed several of its patents to a newly established troll but Apple has also been using patents to undermine open standards.

In the end all this patent litigation will accomplish absolutely nothing for the companies in question.  Yes, maybe it will delay a competitor here or there for a short period of time.  But in the end there are too many patents around already so it all becomes the equivalent of a slow moving trench war with all sides digging in.  In the process countless lawyers will become incredibly rich and innovation will suffer as collateral damage.  We are experiencing the tragedy of the anti-commons: instead of ideas combining freely to move us forward as a species we are fighting in court over their ownership.  Here too Apple has played a rather sad role by patenting a variety of things that had clearly been out there already thus effectively removing ideas from the commons where they can be combined freely with other ideas!

Given all that it is especially galling to see the Supreme court on its way to extending the reach of patents into yet another realm: medical diagnosis.  Apparently it could soon be a patent violation for a doctor to adjust the dosage of a drug based on measuring the level of a chemical in the patient’s blood.  Leaving aside that this seems like a fairly obvious idea, it is frightening to consider the consequences of patents extending beyond pharmaceuticals to simply applying medical knowledge. 

Google Buys Motorola: Patent (and UX) Defense

Google buying Motorola is a strong defensive move against both Microsoft and Apple on two fronts: patents and user experience.  Apple is vertically integrated and Microsoft controls Nokia (without having had to buy it).  Between that and having filed or acquired a lot of patents, these two pose formidable threats to Android.  Buying Motorola lets Google fight both of these threats in one go.  As Larry Page’s blog post makes clear, Motorola has a huge trove of mobile IP, having invented the first portable handset and also the then smallest feature phone.  Having hardware design capabilities inhouse will let Google more easily develop some reference phones that provide as well rounded a user experience as the iPhone and Windows Mobile 7 (although this will require as much if not more software UX discipline). 

Nonetheless, there are many negatives to being in the hardware business, such as margin compression (caused ironically by Android) and real COGS (other than servers and bandwidth this is an unfamiliar concept to Google).  Most of all, for Android to succeed it must be widely adopted by many handset makers and the last thing Google should want is for this acquisition to scare off the likes of Samsung and HTC.  I therefore predict that Google will only retain parts of Motorola - the patents and the hardware design capabilities, but close down or sell off much if not all actual manufacturing and handset distribution (to the extent that Motorola still has any of these in-house to begin with).  That is of course assuming that Google is not tempted to go overboard once they have this done and get into the carrier business as well as Jean-Louis Gassée suggested for Apple.  Being vertically integrated would be a terrible idea.

Supreme Court in High Gear

The Supreme Court handed down a bunch of rulings yesterday.  The two that I find most interesting relate to patents and guns.  Both rulings are disappointing, as I am against software patents and for stricter gun control.  But they are also not as terrible as I feared they might be.  As far as I can tell, on both counts the Supreme Court handed down fairly narrow rulings.   The initial analysis over at Groklaw of the Bilski decision (patents) suggests there are plenty of openings in this ruling for potentially stricter limits on software patents.  Similarly, the Chicago gun decision appears to still keep it possible for cities to attempt to regulate gun ownership (just not ban it outright).  Unfortunately, this means that companies will continue to get sued over frivolous software patents and cities will continue to be sued over gun control ordinances.  But the silver lining here is that this lower courts still have room to move and for new cases to make their way back to the Supreme Court.  Let’s hope that at some point we will have a different Supreme Court too!

Software Patents Need To Go

My partner Brad put up a great post on the USV blog yesterday, arguing for an independent invention defense against software patents.  A while back, I had proposed an alternative, a change in how litigation works.  In that post, I wrote that:

Some folks have suggested doing away with software patents altogether as a way of addressing this problem.  That strikes me as too dramatic a solution as I don’t believe that all software patents are evil.  For instance, if someone were to spend years and lots of money to develop a new and improved way of recognizing images then it is not clear to me why that is less worthy of patent protection than say a new machine or a new drug.

I have since then changed my view of that.  After a lot of digging into what has been patented over the years in software, I am now convinced that neither a change to litigation nor an independent invention defense are sufficient.

Instead we need to hit the restart button by invalidating software patents wholesale and either not allowing them going forward or only in some incredibly restrictive form.  That now puts me firmly in the camp of Brad Feld, who has a post today supporting Brad’s effort and trying to rally more investor support for fundamental reform.

Running around a lot at the moment, so expect a longer post in the future detailing the process of my conversion!

Patently Absurd: Proposing a Change to Litigation

A number of companies in the USV portfolio are being sued over patents (e.g., Twitter).  For a startup, such a suit is a huge distraction and potentially a major drain on financial resources.  Even for large companies such as Microsoft, patent law suits are a real pain to deal with (see Brad Feld’s post on the latest involving XML).

Some folks have suggested doing away with software patents altogether as a way of addressing this problem.  That strikes me as too dramatic a solution as I don’t believe that all software patents are evil.  For instance, if someone were to spend years and lots of money to develop a new and improved way of recognizing images then it is not clear to me why that is less worthy of patent protection than say a new machine or a new drug.

As it turns out, whether or not this is currently protectable is actually a matter of great debate due to series of US Supreme Court rulings which are confusing at best (see this recent article from Ars Technica for background).  With the existing system such a mess, it seems to me that changing how someone can litigate over patent infringment would provide a better solution.

Here are two changes to patent litigation that I believe would make things a lot better:

1. Restrict the choice of venue to the headquarter district of the defendant.  That gives the defendant a leg up, but that is partially the purpose of this change.  The key reason is to make it impossible to sue in such odd places as Marshall, Texas, which have established themselves as havens for patent suits.
   
2. Require each suit to start with an initial determination of responsibility for legal fees.  The court would do a review of the law suit and of an initial response from the defendant and would use that to determine who has to bear the defendant’s legal costs should the defendant prevail.  The court could take into account the relative sizes and financial strengths of the parties in addition to the apparent merits of the suit.  This would make suing much more expensive for patent trolls over long shot patents, but would still give individual inventors with a strong claim a fair shake.

There are probably a number of reasons why this can’t be accomplished and if any lawyer is reading this I would love to know.  But it seems to me to be a more promising direction for fixing the patent mess than yet another cut at interpretation.