Isaac Newton said: If I have seen farther it is by standing on the shoulders of Giants.
A jury has decided that Microsoft must respect Bell Labs patents on which Microsoft has built its multimedia business. The principle here is that when you stand on the shoulders of giants such as Bell Labs scientists, you may have to feed them too.
Microsoft v Alcatel-Lucent [Bell Labs]
The Patent Board | Our Services | Data & Research Services | The Wall Street Journal - Readers Guide
Story One: Microsoft executives as bullies
Remember Danny the bully on the playground? And remember Eddie the clever little comic that could get under Danny’s skin? Edie would ridicule Danny the bully in front of Shirley and the other cute girls. Shirley and Patricia and Janette would snicker. Danny couldn’t do anything about it. Even if he pounded on Eddie, which he sometimes did, he could never look cool in the eyes of the girls.
Alcatel-Lucent, owners of Bell Labs (post the split-up of AT&T, for history buffs), have found a way to get under Microsoft’s skin. Oh yea. Make it clear for all to see that Microsoft’s touted research group had to license an MP3 encoder. And make it clear for all to see that Microsoft avoided licensing the encoder from its rightful inventor. Instead, Microsoft cut a sweetheart deal with a small offshore company to get an equivalent–but according to the jury invalid–license. And in this case Danny the bully may have to pay some damages to Edie. Big damages.
Microsoft execs can be bullies when it comes to stepping on others’ intellectual property. (Of course, they can also be very nice.) It’s former CTO has testified that when he worked at the company, there was a macho culture that encouraged ignoring other companies’ prowess and patents. Microsoft execs tended not to worry about licensing intellectual property, or even giving credit to previous inventors. The culture at Microsoft was to make anything necessary to win at competition. Execs dealt with issues like idea theft and intellectual property rights only as needed.
For years this worked for Microsoft, according to its CTO. Microsoft could pretty much bully its way around the playground.
Finally with the Netscape case, Microsoft was brought down. It bullied Netscape and was caught and disciplined. But not much, and taming the bully required years of effort on behalf of the government and many companies.
Now consider this: What if Netscape had patented its innovations? Netscape had licensed from the University of Illinois the core browser patents. Netscape had paid for the innovation it popularized. And Mark Andresson left the University of Illinois and joined Netscape and created a team that made many many new inventions. Do you remember when Netscape put out a new release ever few days?? Many of those would have been patentable inventions.
Should Netscape have patented those inventions? Yes, they should have!
Would Netscape patents have leveled the playing field when Microsoft started threatending and bullying Microsoft? In the famous meeting where Microsoft said to Jim Barksdale, the Netscape CEO, that Netscape would have to let Microsoft have the market or be crushed, would a strong portfolio of pending patents have led to a different conversation? I think so.
Now Microsoft is facing an acusation that it infringed ideas created at Bell Labs. Bell Labs can not be accused of being other than a real lab. Bell Labs may seem passe now, but Bell Labs brought us many of the most important information technology inventions of the past century. Bell Labs genuinely invested in innovation. If you put Bell Labs scientsts up against Microsoft research scientists, by any measure Bell Labs scientists did more innovation, more “deep innovation–for example in materials and semiconductors–they invented the transistor and fiber optic communications, for example.
Microsoft build an empire on top of innovation at Bell Labs and other companies. Now Microsoft may have to pay for that priviledge, or develop its own technlogy.
Oh, yea, remember, the first Microsoft operating system, DOS, was developed by little “Seattle Computing” and purchased by Microsoft who then licensed it to IBM…
———————————————-
Story Two: Bullies can crush an individual inventor even when she or he has patents.
Consider this story, based on true accounts and put into a fictionalized form:
An independent inventor named Joe lived in Cedar Rapids, Iowa. Joe educated himself in engineering at the nearby University of Iowa, lived modestly, and focused on inventing as new type of graphic display.
After ten years of work, Joe made a series of important inventions for touch screens and swirling images. These make possible a new form of user experience.
He was excited. Joe’s old high school buddy who runs a successful landscaping and garden center had partially financed him. He wondered if they and their families might get a little of their money back. They and Joe paid a total of $123,000 to file patents over the years, playing by the rules of innovation that started back in Thomas Jefferson’s day.
The inventor open sourced his ideas, relying for fairness of attribution and commercial return on patent protection.
Joe the inventor contributed his ideas to the public dialogue, openly. [By the way, Bell Labs did this as well, at a large scale. In addition, Bell Labs worked with universities to share and teach advanced ideas. Unix, the ancestor of Linux, was a Bell Labs operating system licensed free to education.]
Joe’s patent applications were published 18 months after each filing–years before they were successfully awared to him. Scientists at Microsoft and other companies read Joe’s patent applications and learned from them, and tried in many cases to engineer around them.
Joe did not hide behind trade secrets. He depending on the protection of patents in a world of open dialogue. He spoke to others in the industry. He was a good citizen of the innovation community.
Joe believed he did not need to be secretive, because he had patent protection. His inventions were his property, registered and certified by the government.
Under the law, Joe’s patents were exactly like the real estate title to his thee-bedroom, one-bath house and the 100 by 50 plot of land under it. His next door neighbor–a nice person, by the way– would not be able bully him out of his house and land, because he had title registered with the State of Iowa and the County of Linn.
Joe’s patents were a property right. Albeit a limited one. Land title lasts forever, and house title outlasts the house. In the case of patents, the title is of a limited term, so that if others cannot work around it, they can freely use it after a period of years. A patent is a limited-term property title to an invention. A patent provides a property right to something an inventor makes.
Joe decided the time was right to visit a big company, because he saw a big market that he and his friends in Cedar Rapids could not reach. [Cedar Rapids is not perhaps as isolated as you might think. Collins Radio was founded there. The founder of Go Daddy, the ever-clever Bob Parsons, started his prediscesor business Parsons Technology in Cedar Rapids.].
The people Joe met at the big company seemed very nice. They payed for his flights to Seattle, they put him up in a nice little boutique hotel on Lake Washington. He had never stayed in a boutique hotel before, and he especially liked the big fluffy pillows and the down comforter. He told his spouse and kids about this when he got back to Cedar Rapids.
The big company executives were happy to meet with Joe. They knew his work from his published patents and from his high profile in the community. The executives were so interested that they assembled nine people including six computer scientsts for the first meeting.
A leading big company scientist in the Graphics group said on behalf of the group that they were “very excited.” The inventor became excited. He thought to himself: “Finally myideas would reach fruition on a large scale. This big company had resources!”
After the first meeting he took an early flight from Seattle to Chicago. Then he flew a smaller regional jet into into Cedar Rapids. The whole way he was high! When the plane landed in Cedar Rapids, he practically danced down the steps from the plane and across the taxiway into the terminal. He barely noticed the light rain that drenched his blue cotton shirt.
Over the next few months discussions continue by phone. The company scientists talked with him. Some days he barely left his basement study, because he was trapped in endless conference calls. He put a small coffee maker in his study, so he could make coffee while his speaker phone was on mute.
His contacts at the big company apologized that “things move slowly here..”
Then one day a strange thing happened. He call Seattle and his main contact wasn’t available. He was “in a meeting”.
The inventor kept calling, but was not able to get through. Things seemed strange to him. The nice admin at the other end of the phone now seemed nervous and strangely distant. She had seemed so open before.
Then one day he checked his email, looked on the net, and saw a special announcement from the company. They had made “a revolutionary invention” in their labs.
He put an urgent call to the company. There must be a mistake.
The scientist does not call back. A person in the legal department responded later in the day. He said that there will be no deal. He said what the big company scientists learned in meeting with Joe was that their own technology was better. “We were working on it already.” Sorry.
———————————————————-
Joe did not have the resources to fight the bully. When he talked to lawyers, they didn’t want to take his case, because they had a “conflict” about suing a large potential client.
————————————————————
Times are changing. Now law firms will take small inventor’s claims. Private investors will fund these efforts. No longer can large firms step on small inventors with inpunity.
It is ironic that big companies call these small inventors “trolls.” Kind of insulting. The term “troll” was invented by the Intel chief lawyer. Intel?? Ask AMD about Intel and patent litigation. I think the record will show that Intel is perhaps the most aggressive about its patents and about stomping out small companies that it sees as infringers.
Let us go back to the playground. Is the class comic who gets under the skin of the bully a troll? Or a hero??
Is the class bully a “pillar of the technology establishment” and worthy of special “patent reform” to protect if from the class comic? From “trolls?”
Or is the bully a bully.
“Troll” is a term that bullies at Intel (this is literally true) popularized to deride and undercut support for the little guys who piss them off but who they can’t crush.
