The Software Patent Process can be your Friend–an essay for software developers and teams of entrepreneurs
>Available in PDF format here.
The Software Patent Process can be your Friend
By Jim Moore
General Partner, RSS
CEO, Newsilike Media
August 2, 2006
The following essay takes the long way around. The central point is that if you are an
individual software developer or a team member and entrepreneur in a small
company, you should get to know the patent system. There are two reasons for the length of this
article. The first is that I am not
smart enough to make my points more simply.
My bad. The second is that there
is so much lore and misinformation about software and software patents being
circulated in our industry, I feel obligated to start somewhat near first
principles. So here goes.
Developing software is like contributing to the metaverse. Consider the metaverse in literature—in Neil Stephenson’s classic Snow
Crash—or experience the metaverse of Second
Life, a real virtual site and place in the Web 2.0 ecosystem. If I want to build a house in the metaverse,
I just go to the edge of current developments—an edge that is infinitely
extendable—and I set up my house. I
don’t have to bargain with anyone else in the metaverse. I don’t have to deal with realtors, with
building codes, or zoning. As long as I
am willing to move to the edge, to the frontier, I can freely apply my
creativity and enjoy—and share–the results.
Software is basically the same. There is always an edge, a frontier. There are, for example, four billion people
on the planet who live on less than a dollar a day. What about products and services for
them? Some of the most creative people on
earth–including Bill Gates—are focused on this market. People forget that when the personal computer
was in its infancy, those who established the industry were considered hippies
and freaks. There are plenty of places
to pioneer today, and if you have a hankering to pioneer, the world is open to
you. There are always new problems to
solve, for those who seek them out.
Of course the established main street locations are already
taken. No one is promised a world without an establishment. Today, if I want to
create a personal computer operating system, I am going to have to contend with
Microsoft and relate to Intel. Personal
computing is simply not at the edge anymore.
The same will be true in the metaverse if I want to set up shop next to
a popular hangout on main street. But if I am willing to head out to the edge
of town, the sky is literally the limit.
There is an infinite amount of software to be invented and built.
Software follows Godel’s
law—as soon as a system is defined, a new alternative and meta system can be
conceived. Software goes on and on.
Software invention will never end, just as ideas will never end. Any attempt to take possession of the world
of software, to dominate software, will sooner or later fail, as long as people
are free to think. Software is not like
real estate. It cannot be “enclosed”
like a park made private. Unlike land, which “they aint making any more of,”
people just keep on making new software.
Software builds on software—indeed, inventions build on
inventions. Ideas morph, new memes emerge, evolve, differentiate, split,
replicate, adapt, and create new ideas.
Software is made, not born.
Software developers apply Edison’s two classes of creativity—inspiration
(1%, said Edison) and perspiration (99%). Software is invented, refined, tested,
distributed, feedback collected, and refined and reinvented. People do this. Inventors do this. Software engineers and designers tend not to
think of themselves as inventors because, unlike, say, mechanical engineers who
make high technology weaving machines to spin metal fabrics (I met a very nice one
of these folk the other night in a dive bar in Cambridge, down near MIT), software
engineers spin their ideas in the comparatively intangible world of code.
Though software is intangible, it is quite real. It is, as they say in accounting,
an asset. When software is developed
by the inspiration and perspiration of a person, a team, a company, it is
rightfully the property of its creators and or their employers and
financers. Just a few years ago
intellectual property was considered an arcane part of the economy, and was
relegated to technologists and legal specialists. Now intellectual property is recognized as
the central contributor to the modern economy.
Intellectual property is what an iPod is made of, a supercomputer is
built from, and new forms of manufacturing are established on. The central contributions in any of these
situations are ideas, not the plastic, the gallium arsenide, or the steel of
People who own intellectual property are free to do with it
pretty much as they wish. Like tangible
property, owners of intellectual property can give it away, rent it to others,
or just sit on it. One of the wonders of
intellectual property is that it can often be shared with as many others as one
likes, without diminishing its value to any one user. It is said to be “non-rivalrous” by
economists, because two users need not be rivals in relation to it.
Intellectual property is simply yours by dint of your having
developed it. On the other hand,
intellectual property is regrettably easy to steal. Just as it is often not diminished by being
shared, it is often just as valuable to a thief as to its owner. Stories abound about independent software
inventors who meet with members of large software companies, are wined and
dined with the promise of a job, share their ideas—and then realize months or
years later that their ideas were stolen in the process.
Patent protection and the threat of litigation is the
strongest way to deter and/or remedy theft of software-based intellectual
property. This is a controversial
statement in some circles, but I believe it strongly. A review in
last year’s Economist provides support for the proposition. Without a patent, an independent inventor or
small company is at the mercy of the market strength, financial resources, and
intimidation power of large companies.
Many, many innovative products and services have been crushed by the
sheer competitive assault of the largest technology companies. A world without patent protection would not
favor small players, it would take away one of the only means a small player
has available to become established in the marketplace.
Unfortunately, most independent software inventors and
small companies do not have the expertise or resources to file effective
protective patents. Even when they are
issued valid patents, the small companies have difficulty enforcing them. Thus the patent system is inaccessible to
those who need it most. By contrast,
large companies employ armies of attorneys and intellectual property
specialists, and leading firms file patents continuously throughout the year as
a matter of routine business practice.
In the current round of fox-in-the-henhouse “patent reform”
IBM and Microsoft now argue for a world where fewer new patents are issued. Both
are sponsors, for example, of the “Peer to Patent” project that
is intended to help patent examiners challenge patent applicants more
aggressively than today. If fewer
patents are issued, but existing patents are not revoked, IBM and Microsoft win
because they already possess vast existing portfolios of patents that arguably
are rendered more valuable in a world where fewer new patents are issued.
Consider the facts. IBM has a
portfolio of more than 31,995 patents, and Microsoft announced
on March 6, 2006 that it had been issued its 5,000th patent. Microsoft has a well-publicized
goal of filing more than 3000 patents per year starting in 2005. This number is, not coincidently, how many
IBM has filed each of the past three years.
A look at the 2005
annual scorecard technology company patents, many of which are for software
innovations, is daunting:
more patent applications than any other company with the U.S. Patent and
Trademark Office (USPTO) in 2005 to once again lead the annual ranking put out
by the U.S. Department of Commerce office.
The company filed for 2,941
patents in 2005, which is down from 3,248 applications in 2004 but still well ahead
of second-ranked Canon, which filed 1,828 applications, the USPTO said
Thursday. The figures are preliminary and subject to correction in the USPTO’s
annual “Patenting by Organizations” report that is due out in several
IBM has been the top corporate
filer of patents since at least 1994, according to data on the USPTO’s Web
The number-three filer for 2005 was
Hewlett-Packard Development Co., 1,797 applications; followed by Matsushita
Electric Industrial (Panasonic), 1,688 applications; and Samsung Electronics,
1,641 applications. The remainder of the top ten was: Micron Technology, 1,561;
Intel, 1,549; Hitachi,
1,271; Toshiba, 1,258; and Fujitsu, 1,154.
What is the answer, in a world of giants, of multinational
patent mills? How can individual
innovation be supported? Must we all
live in fear of idea theft by large corporations? Must we all finally succumb and become
employees of these same firms?
The problem is particular acute in the
new Web 2.0 software and web services ecosystem. Very small companies can now develop very
powerful new inventions (read TechCrunch
daily if you hope to try to keep up). Indeed,
much of the most vital innovation is being accomplished by independent
developers and tiny, creatively-focused groups.
How can these individuals and teams be helped to thrive?
The best approach may be to join
together independent inventors and small company entrepreneurs into something
of an intellectual property union or cooperative association. By aggregating patents together into
portfolios, the distributed contributions of many smaller players can be
brought together to achieve economies of scale and scope.
I am involved in one such initiative,
called Share Patents. Share Patents is a
project of Newsilike Media Group. Share
Patents aims to accomplish four things:
First, Share Patents will aggregate
the inventions of small players, and pursue patents on behalf of them. By contrast, most work on patent pooling
currently happens among large companies, and has the effect of excluding small
players or insisting that they relinquish their ability to pursue damages
against the largest companies.
Second, Share Patents will make
licenses available on an open and free or low-cost basis for educational and
public interest purposes. In this way it
will be analogous to Creative Commons,
which is a platform for open licensing of copyrights. Share Patents is an example of the open
licensing endorsed by the Patent Commons project.
Third, Share Patents will establish a
sustainable business model for commercial licensing, so that funds are
collected that can be reinvested in research and development and the
establishment of rights for inventors.
One of the major barriers to small companies pursuing public interest
licensing is that the venture capital community has in general insisted that
startup companies hold all assets close, including intellectual property
assets. We believe this is
short-sighted, and would like to take at least a small step toward changing
In this initiative we have a unique
partnership with intellectual property progressives in the venture capital
community. The partners in Newsilike are
also co-founders and general partners of the RSS
Investors Fund, which is a socially-oriented venture fund established to
support Web 2.0 companies. Schooner Capital is invested in
Newsilike, and Newsilike shares ownership of TopTenSources
with Highland Capital, Schooner, and RSS
We wish to demonstrate a business
model that balances public and private values while being attractive to
institutional investors. If we can
succeed at this, we anticipate that great amounts of financial capital may then
become available to socially responsible software firms. Complementarily, we expect that progressive
entrepreneurs of current day venture funded companies will be better able to advocate
open, public interest licensing of their intellectual assets.
Fourth, Share Patents will use the
patent process to stimulate idea sharing and transparency of innovation across
the software industry. Perhaps
surprisingly, our experience in the software industry reveals that systematic
patenting is a powerful enzyme for breaking down intellectual walls and offering
each other insights into our respective creative minds. In exchange for being considered for a
patent, one must document publicly one’s invention. The exact process varies from nation to
nation, but in every case the fundamental quid pro quo is sharing one’s
ideas. In the US an application document is published by the patent office
after within 18 months of its earliest official filing, which is often years
before a patent is granted, if at all.
Consider the following discussion
from the “Patent” article in
The term “patent”
originates from the Latin
word patere which means “to lay open” (i.e. make available for
public inspection)…in accordance with the original definition of the term
“patent,” it is argued that patents facilitate and encourage disclosure
into the public domain for the common good.
did not have the legal protection of patents, they may prefer or tend to keep
their inventions secret. Awarding patents generally makes the details of new
technology publicly available, for exploitation by anyone after patent
protection ends, or for further improvement by other inventors. Furthermore,
when a patent’s term has expired, the public record ensures
that the patentee’s idea is not lost to humanity.
Do you want to understand the mind of
Google? Read this compilation of the public
record of Google patenting, available on convenient CD. Do you want to know what Steve Jobs of Apple
Computer is thinking about, especially in relation to RSS and blogging? Read
these pending patent applications.
Patents are a most open form of intellectual property
protection, because patenting requires publishing one’s invention, and
documenting it so that a person “schooled in the ordinary arts” of the
profession can duplicate it. Patent
documents covering software are inherently open source, in contrast to the
closed world of software trade secrets—where code is buried in
compilation. Even software copyrights
have become a way to veil key innovations, due to the requirement that only
part of the code need be disclosed in order to gain copyright over the whole.
We are committed to these same values
are at the heart of parent company Newsilike.
Newsilike is a commercial company with a social mission to expand
participation in the Internet. Among
other things, we aim to provide technology that can help keep the Internet free
of censorship and content blocking. Newsilike
is developing global scale Internet communication platforms based on standards
RSS and OPML. Both, incidentally,
invented by an individual, Dave Winer,
sometimes working alone and sometimes with small teams and companies. OPML, in particular, we see as powerful,
scalable platform for web content management.
For example our OPMLWorkstation.com
project is a free, public, library-like collection of user-contributed
directories that are intended to be accessed from even the least powerful
computer, anywhere in the world. Indeed,
the first patent application that Newsilike is contributing to Share Patents
concerns technology to support the scaling out of open, XML-based networks.
I close by speaking to individuals and entrepreneurs in
small software and web service companies.
Don’t despair patents. The problem is not the software patent process.
The software patent process can be your friend.
The problem is that this process—like many in our society—is difficult
to access unless you have money and are part of the establishment. So join together with others to get what you
need. Over the next few months Share
Patents will be releasing white papers that are intended to provide guidance to
the process. Keep in touch. We look forward to meeting you and working
with you. Viva Web 2.0!