The American patent system is completely broken, at least when it comes to software patents. Billion-dollar software companies are suing each other over minor pieces of code, patent trolls run rampant, and consumers are losing out as the original purpose of software patents have been lost. In this three-part article, I'll first convince you that the software patent system is broken in the US, then that the system shows no signs of changing, and finally I'll discuss what we can do about it.
Note that this article is about software patents in particular. The US patent system may work better for other industries; I don't know. My research has been confined mostly to software patents.
The Point of Software Patents
Let's first talk about the point of software patents. Patents are a form of intellectual property, like copyright. Unlike copyright, patents cover inventions instead of creative works and last for a shorter time (20 years compared to copyright's roughly 100 years). The purpose of a patent is laid down in the constitutional clause that gives Congress the power "[t]o promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries" (Article I, Section 8, Clause 8).The idea behind patents is great. If you spend years inventing something, perhaps building a better mousetrap, then someone shouldn't be able to see your mousetrap in a store, steal your idea and sell the same mousetrap while bypassing all the hard work you did refining the improved mousetrap. Or worse, they could see your mousetrap in your secret lab while you are still refining it, steal your idea and beat you to market. With patents, you must reveal your invention publicly, but then you have the exclusive rights to that invention for 20 years.
However, there are limits. You can't patent just anything, someone would patent the wheel and sue all the car manufacturers. Patents must be a patentable thing (a process, machine, "[article] of manufacture," and composition of matter), and they must be new, useful and nonobvious. "New" means you can't patent the wheel; it's already been invented. "Useful" means the invention has to actually do something. "Nonobvious" means you can't just slightly tweak someone else's invention; if there's already a patent on a standard pencil, the patent office won't grant you a patent on a slightly smaller pencil. That's just an obvious extension of an existing invention.
Applying these principles to software is pretty new. Software patents only became legal in the US in the 70's and 80's. The courts are still trying to figure it out. In eBay Inc. v. MercExchange, L.L.C. (2006), Justice Kennedy and other justices questioned the wisdom of permitting injunctions in support of "the burgeoning number of patents over business methods," because of their "potential vagueness and suspect validity" in some cases.
Lots of Existing Patents Are Invalid
Non-New PatentsNow that we've discussed how software patents are supposed to work, what's the problem? Well, one problem is that people are patenting things they shouldn't be able to patent. Remember that all patents must be new, useful and nonobvious. Well, people are patenting existing software inventions.
Two excellent sources of information about our broken software patent system are the This American Life episodes " When Patents Attack!" and " When Patents Attack ...Part Two". I cannot recommend these episodes of This American Life highly enough. You can listen to the first one below. But to get to my point, during Part One the journalists from This American Life (TAL) talked to David Martin, the founder of M-CAM. M-CAM is hired by governments, banks, and other businesses to assess patent quality. M-CAM uses special software to search through all existing software patents to find patents that are essentially the same. Ideally, each patent should be unique. However, sometimes the US Patent and Trademark Office (USPTO) grants patents for things that have already been invented and patented. During the TAL episode, Martin looked up how many matching patents there were for one specific software patent. There were 5,303 matching patents.
"We thought that would be an anomaly. And then we were told, oh no, it's not an anomaly. That happens. [....]And as I've testified in Congress, that happens about 30% of the time in US patents."The specific software patent that Martin was looking up with TAL was Patent 5771354 "Internet online backup system provides remote storage for customers using IDs and passwords which were interactively established when signing up for backup services". According to the owners, Intellectual Ventures, it covers upgrading software on your home computer over the Internet. For example, "when you turn on your computer and a little box pops up and says, 'Click here to upgrade to the newest version of iTunes'". When TAL looked at the text of the patent it seemed like it did a lot more than that. Having looked at it myself, I'd agree. It appears to cover doing any sort of data backup over the Internet, using an ID and password.
- David Martin, (emphasis added)
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| Drawing from Patent 5771354 showing how all computer networks work |
Patent 6080436 "Bread refreshing method" was issued in 2000. It patents toast. Don't believe me? Go read it for yourself. Granted, it isn't a software patent, but it shows the flaws of our patent system.
It should be clear now that the USPTO allows inventors to patent inventions that have already been invented, breaking the requirement that all patents be new. There are duplicate patents abound. Furthermore, I'd argue that even if an inventor receives the patent on something, it doesn't mean he or she invented it. That person may have just been the first to file a patent. Filing a patent is an expensive, time-consuming process. According to the USPTO, it takes about 2 years for a patent to be processed. The cost of filing a software patent is around $10,000 (UpCounsel, Richards Patent Law, IPWatchdog) when including legal fees, which might be a drop in the bucket for a major corporation but is expensive for a small startup. Because of these barriers to getting a software patent, the actual inventor may not be the first to file a patent on a particular invention.
Obvious Patents
So software patents may be patented and re-patented. But even "original", previously unseen inventions may have problems. For example, they might be obvious extensions of existing patents. As I said above, you shouldn't be able to patent a slightly smaller pencil. The pencil has already been invented, so taking an obvious idea such as making slight tweaks to the size or color is not patentable. Sure, that idea might be "new", but inventions must also be nonobvious. But obvious software inventions are being patented every day.
As a software engineer and a person who is skilled in the field, I would describe Amazon's 1-Click patent as fairly obvious. In short, it describes the ability to save your credit card information in a website so that you can purchase items with only one mouseclick. I am not the only who believes this patent to be obvious. As one blog pointed out, it's a "fairly broad concept" that the European Patent Office denied a patent to because it was "obvious to a skilled person". To give another example, this patent caused the Free Software Foundation to boycott Amazon for a short time on what it called "an important and obvious idea for E-commerce".
There are other examples of patents on obvious "inventions." Richard Stallman, a software engineer who is famous for his work on GNU, Emacs, and other free software, decries the obviousness of Patent 5963916, applied for in October 1996 in his text, "The Anatomy of a Trivial Patent". Patent 5963916 ("Network apparatus and method for preview of music products and compilation of market data") covers listening to a preview clip of music on the Internet. After posting a snippet of the patent, Stallman writes, "That sure looks like a complex system, right? Surely it took a real clever guy to think of this? No, but it took cleverness to make it seem so complex. Let's analyze where the complexity comes from[...]" Stallman then proceeds to analyze each line in the first portion of the patent to point out how each aspect of the idea was already existing or, at least, very obvious at the time:
Now look at a subsequent claim:
3. The method of claim 1 wherein the central memory device comprises a plurality of compact disc-read only memory (CD-ROMs).
What they are saying here is, "Even if you don't think that claim 1 is really an invention, using CD-ROMs to store the data makes it an invention for sure. An average system designer would never have thought of storing data on a CD."In case it's not clear, Stallman is being extremely sarcastic. Even back in 1996, CDs were commonly used for storing data. This is one of the patents that Stallman calls "laughably obvious". The problem is that the overly complex language of patents obscures the obviousness of the ideas.
This is a huge problem. Lots of software patents in the US are actually invalid because they are obvious or already patented. If David Martin's numbers are to be believed, there are hundreds of thousands of invalid software patents in the system. But invalidating a patent means spending lots of time (years) and money (millions of dollars) in court. Because of this, the original purpose of software patents--promoting progress--has been lost.
Software Patents Aren't Serving Their Purpose
The first problem with software patents is the barrier to entry. That is, the money and time spent in getting a patent may create a burden for startups and solo software engineers. As mentioned above, it can take around 2 years and $10,000 to get a software patent. This fact alone may dissuade programmers from trying to create innovative new software that the public would benefit from. However, this is a small problem compared with other software patent issues.One of the most insidious problems with software patents is the menace of patent trolls.
Patent Trolls
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| Alaska Robotics - "Patent Trolls" |
Let's take the example used in the introduction of the "When Patents Attack!" This American Life podcast. Since 1999, Jeff Kelling has been working for FotoTime, a small company that hosts a photo sharing website. This was before major photo sharing sites like Flickr, although FotoTime wasn't the first photo-sharing website. In May 2008, they received a letter from FotoMedia (not to be confused with FotoTime) that said FotoTime was in violation of 3 patents. FotoTime was told to contact FotoMedia to arrange payment, or FotoMedia would take them to court. Jeff's team looked up the lawsuit and noticed that FotoMedia had sent the letter to 130 other companies including Yahoo (Flickr), Shutterfly, Photobucket, and other companies, big and small.
There were a lot of reasons this was weird. One was that FotoTime hadn't realized that they were violating any patents. Whatever patents were being violated, FotoTime had evidently come up with the same idea themselves, without reading FotoMedia's patent or copying some FotoMedia product. Another weird thing was that FotoMedia wasn't a competitor to FotoTime. FotoMedia didn't have a photo sharing website. Then when Kelling called FotoMedia to ask them which patents FotoTime was violating, FotoMedia wouldn't tell them. Kelling said, "They said they wouldn't answer that until we got into court."
Kelling learned that fighting the patent would cost an estimated $2 to $5 million, which was "more than [FotoTime] could handle". FotoTime settled with FotoMedia. As part of the settlement, FotoTime is forbidden from saying how much they had to pay FotoMedia.
This is what patent trolls do. They purchase a patent that is somewhat vague or perhaps even invalid, and instead of making some technology that uses the patent, they threaten to sue companies they think are using the patent. They might try to sue hundreds of companies, as in the case of FotoMedia. Some companies will pay them a fee rather than spend millions of dollars fighting the patent in court. The patent trolls will then use that money to purchase more patents and sue more people, ad infinitum.
This isn't a business. This is, as venture capitalist Chris Sacca described such practices on This American Life, "a mafia-style shakedown."
And patent trolls are growing bolder. According to a Presidential study, the number of lawsuits brought by patent trolls more than doubled from 2010 to 2012, and these lawsuits accounted for 62% of all patent lawsuits in America in 2012. Victims of patent trolls paid $29 billion in 2011. Now in 2014, these numbers are probably higher.
The Damage from Patent Trolls
This patent trolling kills innovation in a few ways. One problem is that software companies must spend money on legal fees instead of growing their technology. It's impossible to know whether your company will be violating a patent or whether a patent troll will target your company, so it's now important to have a good legal team to either negotiate a settlement or fight the patent lawsuit if and when a troll sues your company.
Some startups may not be able to pay the legal fees from a patent lawsuit and may go under. Jeff Kelling of FotoTime said that "The settlement they [FotoMedia] wanted to get was just enough to put us in danger, but not to close us [...]" It seems that lawsuit came close to shutting down FotoTime.
Patent trolling can even create a chilling effect, causing programmers good ideas to never pursue their startup for fear of being sued by a patent troll.
Software patents no longer promote progress, if they ever did. Now, software patents stifle innovation. It's impossible to know whether a company is actually violating a patent because the patent office is a confusing mess, containing vague and duplicate patents. And so any software company with a good idea can be sued at any time, by a patent troll claiming that software company is violating its patents. Sure, the current software patent system is great for patent trolls, who create nothing and provide no benefit to society. And this is the exact opposite of the purpose of the software patent system.
The system needs fixing.
Continued in The Software Patent System Will Always Be Broken
This American Life: When Patents Attack!
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