In Saturday's New York Times, Cato Institute adjunct scholar Timothy B. Lee went on at length
in an argument that software patents are stifling technical innovation. There were only two problems: he had a poor grasp on business history and his logic was faulty.
I hadn't noticed the piece until I saw mention of it in PATNEWS, a patent news and opinion email service. But I went back and read through last Saturday's piece. Let's start with the characterization of Microsoft as a "growing company challenging entrenched incumbents like I.B.M. and Novell." Technically that was true - and it also owned the desktop computer as it does now. Yes, Windows was in an early state, and I suspect that the company's only having six patents might be true, but that's because so much of what it had done wasn't at all revolutionary. DOS was an operating system much the same as any other - just small enough to run on a PC's then limited resources. Early versions of Windows hadn't done anything not previously covered by Apple and by Xerox before. But as Microsoft went on a heavy patenting binge, so did its innovation. That's because patents are an incentive
Yes, you can find yourself locked out of doing something in a particular way, which is why you invent a new and possibly better mousetrap. Then you patent it and enjoy a limited benefit from that patent. Since companies have gone on a patent spree since gaining protection for fundamental algorithms and designs became possible in the 80s, software has leaped ahead faster than anyone ever would have expected: online services, graphical interfaces, new ways to model and plan businesses, home entertainment systems. So where is the lack of innovation?
Mr. Lee's main argument seems to be in the Verizon v. Vonage case:
Vonage developed one of the first Internet telephone services and has attracted more than two million customers. But last year, Verizon — one of Vonage’s biggest competitors — sued for patent infringement and won a verdict in its favor in March.
Does that mean the idea of software patents is bad, or that the decision is bad and, perhaps, the patent should never have been granted as there were Internet telephony service years before Vonage
. Some go back to the mid-1990s - a good four or five years before the creation of Min-X.com, Vonage's predecessor. And Verizon's patents, whether you think they are valid or not, certainly came before that company's genesis as well.
So what exactly was the innovation that Vonage brought to the table? As it is, the company has already said that it thinks it's found other ways of providing its services to avoid conflict with the Verizon patents. If anything, the Verizon patent case has pushed it to do something at least slightly different and new. So much for Vonage serving as the poster child for the need to eliminate software patents.
Mr. Lee then argues the following:
In fact, companies, especially those that are focused on innovation, don’t: software is already protected by copyright law, and there’s no reason any industry needs both types of protection.
This is more nonsense. Copyright is protection of the specific expression of an idea or concept. Patents are protection for an underlying concept or idea itself. Under copyright law, I can write about the same subject, even with the same twist, as someone else, and if I'm using different wording, it's unlikely that the two articles will be seen as conflicting. But that's about exact expression. So say that I write a new algorithm - or unique and clearly defined approach to solving a specific problem - in one programming language like C++. I'm no lawyer, but I suspect nothing in copyright is going to keep someone else from expressing the exact same algorithm in a different programming language, like Java. So much for equating the two protections, because now I have no lock on the unique method I've developed to solve a problem. And anyone who has dealt with an issue of copyright infringement would laugh at Mr. Lee's statement, "The rules of copyright are simpler and protection is available to everyone at very low cost." Obviously he's never filed a suit in federal court. Then he bemoans the high costs of patents - and, yes, it's very expensive to file and maintain a patent.
But isn't that an issue of the market? Is this the Cato Institute looking into business protectionism? Of course
companies must file patents to stay competitive. They also have to be innovative, do market research, develop new products, establish themselves, all of which are so much more expensive than obtaining patents that the comparison is almost laughable.
Patents are part of business strategy - and that's why Microsoft went into them so heavily. It's not that Bill Gates used to be enlightened and now is trying to protect his turf. It's more that his understanding of business has grown. Perhaps Mr. Lee should chat with Microsoft's chairman and see if there's something he could learn as well.
Labels: Cato, intellectual property, IP, Lee, patents, Verizon, Vonage