Innovation vs. patents

23May07

Patent Wars
Fortune reported on Sunday how Microsoft is considering enforcing up to 255 of its patents that are part of Linux. They believe that the reason that Linux is of such high quality is because Microsoft have invested so much time and money innovating and creating software that users can benefit from.

Gary Barnett from Ovum has stated previously that this could be the beginning of patent wars. He explains:

Such a war, in which every patent holder sought to exercise its rights, could bring the software industry to a standstill…
…If a full-blown war did break out then the only winners would be lawyers, although even they would probably be obliged to go back to writing their legal arguments on pen and paper. If patent war breaks out, you may as well throw your computers away, since they’ll be more or less useless. If every patent were ‘exercised’ it is hard to see how anyone would be able to write or sell any software at all.

What does this mean? Could it be the end of free downloadable software?

This reminds me of the ongoing disputes in the pharmaceutical arena.

Hypothia explains that “discovery drugs is hard and therefore expensive”. There are also countless other examples mooting whether pharmaceutical companies should forego their R&D investments into new drugs to allow poorer countries to obtain them.

This blog is not about the right and wrongs of each of the two scenarios but about whether it is fair for companies to expect a return on their innovation. To put it bluntly, Microsoft needs to move the position of the arguement from ‘them vs us’ to ‘innovation vs stagnation’.

Gary Barnett continues to explain:

The moment when a pharmaceuticals company decides that it is better to invest R&D effort in finding ‘additional’ uses for a drug in order to extend an existing patent, rather than in developing new drugs, is the moment when patent law begins to defeat its original purpose.

What is clear is that the patent battle is turning into a religious arguement where passions are raised. We need to look to leadership from independent sources (like analysts) to take the discussion to a fact-based one where compromise is possible and innovation can still be encouraged and rewarded.

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3 Responses to “Innovation vs. patents”

  1. Blimey Jonny, where did you dig Gary’s comment piece up from? I think it’s from when I was at Ovum – so it’s got to go back a while😉

    Not that it’s not relevant of course. The beauty of the web is that our comments stay with us for ever!

  2. 2 Jonny

    I remember sitting in a few meetings with Gary from a couple of years ago where he was talking about what would happen if vendors such as Microsoft started enforcing their patents. These comments were spot on then and as you correctly said – relevant right now.

  3. 3 Gary

    Jonny, Neil, thanks for remembering – This is something I’ve been ranting about for a while now.

    Microsoft’s sabre-rattling has me very confused, not least because I can’t see any upside for Microsoft in what appears to be a clear case of brinkmanship.

    If you apply a cold-war analogy Microsoft seems to be threatening a pre-emptive strike – To what purpose? Perhaps they’re bluffing – attempting to create a little FUD. In which case they’re onto a loser – I can’t imagine that anyone smart at Microsoft wouldn’t be well aware that vendors like IBM have taken a long look at Microsoft’s patents and developed counter-measures (in the form of a clear defense at law or a work-around) for a big chunk of the patents that seem to be in play right now.

    Maybe the do believe that they have a slam-dunk portfolio of patents, in which case they’re running the risk of an all out patent-war in which the most likely outcome is a massive loss of confidence in software patents as a whole.

    If Microsoft goes to town on this, they’ll have to be prepared to fight a big, long, and vicious battle. I really do hope that Microsoft has conducted a pretty wholesale review of its technology, and its potential liability – If you look at the people that Microsoft has hired from other companies there’s a real risk of inadvertent breach of patents – Ex-Dec engineers, for example, are often said to have made a big contribution to COM+ and .NET – Before calling the odds, Microsoft needs to be absolutely certain that there are no accidental breaches of Dec (Now HP) owned patents in its technology.

    Think “Glass houses” and “stones”….

    Maybe a patent conflagration would be a good thing? Perhaps it’ll force economists, technologists and law-makers to look at the horrible mess that the patent regime is in today and do something about it? I wont list all of the problems I see in the patent regime (happy to if someone asks of course!) but fundamentally – Software patents bother me because I am not convinced that they do what it says on the tin – The monopoly that patents represent can only be justified if it is clear that they really do promote innovation, and there is no compelling evidence that software patents do promote innovation (with the possible exception that VC firms believe – wrongly in my view – that patents represent a bankable asset. I think they’re confusing an “asset” with a “lottery ticket” in a lot of cases).

    The other aspect of Microsoft’s patent rumblings that bothers me is that Microsoft is currently embroiled in a dispute with the EU over its patents – The EU is taking the rather hair-brained stance that it (and not the European Patent office) can determine the validity of Microsoft’s patents. Now as it happens, I’m with Microsoft on this issue – I think that the European Commission is acting foolishly (Yes, we desperately need patent reform, but it needs to be done properly, fairly and in a way that ensures that every vendors’ patents are scrutinised not just Microsoft’s). But by issuing veiled and not-so-veiled threats Microsoft is playing into the hands of the EU.

    Meanwhile, of course, IBM isn’t jumping into the fray. IBM is showing its experience and maturity by staying out of the shouting match, and as a general rule – The quieter IBM is, the more confident its lawyers are……

    Sorry for the ramble, but that’s where I am “right now” on this…

    G.


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