Against Monopoly

David Levine has started a blog, focusing on some of the same topics as Right to Create. The posts are high quality and the perspectives will be familiar -- take a look (we've highlighted Levine's seminal work once or twice before).

Ridiculous Patent: Infinite Data Compression

A ridiculous patent was recently brought to our attention by an alert reader. The patent claims to perform the impossible: compress data beyond the bounds that are clearly understood in information theory. Since the algorithm is not operative, it shouldn't have been granted a patent, as per the USPTO's own rules.

Specifically, the patent in question claims to compress any input data by at least one bit, and to do this with no loss of information. The patent also claims that this process can be applied recursively, making multiple passes over a file until the desired level of compression is reached. These claims imply that you could run the compression enough times to eventually reach a compressed data size of 1 bit, regardless of the input. Now, suppose I compress 10 different files in this way -- each of them compresses to a single '1' or '0' (a single bit). How, then, can we decompress a '1' into many different files? Where does that extra information come from? Obviously, this is a non-starter.

The sad fact is that anyone who has studied rudimentary computer science should immediately know this patent is impossible. Every introductory course in Information Theory makes this plain within the first week of lectures. But you don't have to be a computer scientist to understand the impossibility of these claims through simple logic. We keep hearing that USPTO examiners are experts in their fields, yet the patent office keeps churning out patent approvals just like this one. I'll leave it to you, gentle reader, to draw your own conclusions.

Perhaps, though, it really is time to "open up the examination process to those beyond the single PTO employee doing the examination, and ... let adversarial forces (competitors, existing players) use their own survival as an incentive to participate. And let's let the poor overworked patent examiner act more as a judge or referee in this activity (instead of adversary, advocate, AND judge)" (from "More Examiners = Better Patents?").

Previously Ridiculous:

• The String Phone
• Plotlines
• Rice
• Peanut Butter and Jelly Sandwich
• Swinging
• the Comb-over
• Smiley Faces
• Pop-up Ads
• Anti-gravity Device (another non-operative, laws-of-physics-violating patent)
• Serving Cereal
• highlighting Numbers

The Case Against Patents

Microcomputer pioneer Don Lancaster explains why individual inventors should stear clear of the patent system entirely when seeking their fortune, or even when seeking only to put food on the table to keep inventing.

A lot has changed since Lancaster first published this article. But then again, a lot has stayed the same -- patents still provide much stronger advantages for large companies than they do for inventors. One major change has emerged, however, and it starts with a 't' and ends with a 'roll'.

Model Railroading Patents Update

I wanted to update you on the ongoing battle between Bob Jacobsen, the author of open source model railroading software, and KAM Industries, who sent him an invoice for $203,000 because he allegedly infringed their patent by giving away his software. Jacobsen's lawyer has posted the following:

Folks,

I am Mr. Jacobsen’s attorney. I heard about these postings through the grapevine, and wanted to add some comment.

First, I want to clarify one thing. Mr. Katzer did not sue Mr. Jacobsen. Because of the dispute over the patent rights, I filed a declaratory judgment action on Mr. Jacobsen’s behalf in U.S. District Court for the Northern District of California on March 13, 2006. Case number is 06-1905, for those who are interested. You can read the filings on PACER, the court's electronic filing system.

The purpose of the declaratory judgment action is to resolve a dispute over the patent rights. Mr. Katzer claims that Mr. Jacobsen is infringing his patent. Mr. Jacobsen says he is not infringing any valid and enforceable patent right that Mr. Katzer holds. Because of the increased damages for willful infringement, Mr. Jacobsen needs to have a determination of rights and responsibilities as it relates to Mr. Katzer’s patent. There are other causes of action that Mr. Jacobsen is pursuing against Mr. Katzer – antitrust (attempted monopolization), unfair competition, cybersquatting (on a JMRI trademark) and libel. We will address these issues and the issues relating to the declaratory judgment action in due course.

Second, I realize that many of you are angry at Mr. Katzer, and his attorney, Mr. Russell, for the letters they have sent to Mr. Jacobsen, and other actions they have taken against Mr. Jacobsen. I want to ask you to NOT harass them through calls, letters, faxes, emails, etc. It does NOT advance the case in Mr. Jacobsen’s favor. Here’s what will: As we stated in the lawsuit, there are numerous examples of prior art and inequitable conduct which affect patent rights. If you have more evidence, we’ll take it. The key date is prior art existing before June 24, 1998, and more importantly, prior art existing before June 24, 1997. The prior art that we are looking for is:
- A patent or printed publication that described the invention. Source can be from anywhere in the world.
- Evidence of public use, offer for sale, or sale in the United States. (If it’s from outside the U.S., please make a note and send it so we can follow up.)
- Evidence of another person inventing the same thing in the U.S. – the invention must not have been suppressed, concealed or abandoned.
- If the evidence is not the exact invention, then any information (in addition to the evidence) suggesting that the evidence could be combined with something else to successfully make the invention.

My homepage is www.vkhall.com – you can get my address through the website and send it to me. Please send it via mail. My e-mail service provider is not particularly reliable.

Regards,

Victoria K. Hall

P.S. Mr. Jacobsen contacted me through EFF, so the folks there know about this matter.

Please take Ms. Hall's advice, and don't waste time harassing KAM.

If you do feel spurred to action by these events (and we hope you do), in addition to prior art searches in this particular case, you can, as always, write a letter to your Senators and Congressional Representatives, and let them know how you feel about this case and the type of abuse that the patent system encourages, and/or reforms that you think might be useful. Remember, KAM's behavior is exactly what the patent system currently incentivizes patent holders to do. Let your elected officials know that you don't agree with this, and that you want to see legislation enacted that will prevent this type of thing in the future.

And you could also pitch in a couple of bucks to join the EFF.

Write Free Software, Pay $203,000 to Patent Holder

Bob Jacobsen, a model railroad hobbyist, wrote a bunch of software to let you connect your computer to your model railroad and control trains with it. He chose to not only give the software away for free, but to make the source code available as well, so that the model railroading/hacker community could improve it and customize it to their liking.

And then KAM Industries, maker of commercial software that serves a similar role, tried asserting their 'patent rights' over doing just that.

When the author of the open source railroad controller asked for additional information about what claims were being infringed, KAM sent him an invoice for $203,000, claiming that the 7000 or so users of his software resulted in damages of at least $29/each.

KAM then sent a request to the author's academic sponsor (unrelated to his independent model railroad work), requesting copies of all his email and other correspondence. To most observers, these actions would seem to be nothing more than dirty tactics meant to rattle Jacobsen into compliance.

Several more threatening letters arrived. Finally, in January of this year, Jacobsen responded by pointing out that he didn't believe the KAM patent would withstand a challenge in court, noting that there was plenty of prior art, including his allegedly infringing software, which was available before KAM filed their patent application. He also pointed out that KAM's lawyers must have known this all along. In February, KAM's lawyers responded by claiming that they know of no invalidating prior art, and that they still viewed Jacobsen's work as infringing on their patent rights.

This is all still ongoing. It isn't clear that KAM will cease harassing Jacobsen, even with the knowledge that their patents are likely illegitimate.

But it is abundantly clear that patents like this hurt the efforts of those trying to make the world a better place by producing tools for others to use (for free in this case). It is equally as clear that even small companies can use their patents as bludgeons against individuals.

The continuing saga (as well as all correspondence to date) can be followed at Jacobsen's website. Let's hope Jacobsen's software doesn't get shuttered by patent interests like RProxy did.

There are a number of useful reforms that could make the patent system a bit less abusive. If you want to do something about this type of absurdity, you can certainly try writing a letter to your Senators and Congressional Representatives. As always, feel free to cut and paste anything from this website when you compose your letter (a letter focusing on your favorite reform is a useful strategy) -- everything at Right to Create is in the public domain.

The Man Who Invented Wireless Email

NTP vs. RIM is settled legally, but not historically. It turns out that NTP knew that their "inventions" had significant prior art, dating back to at least 1982, when Geoff Goodfellow committed the concept of wireless email to writing in an Arpanet mailing list. The NYTimes article is chock full of interesting quotes. Here is a sampling:

A high-school dropout, Mr. Goodfellow had his light-bulb moment in 1982, when he came up with the idea of sending electronic mail messages wirelessly to a portable device — like a BlackBerry. Only back then, there was no BlackBerry... he believed that everyone had forgotten that he had initially come up with the idea of wireless e-mail... Almost everyone had, that is, except for James H. Wallace Jr., a Washington lawyer for one of the companies involved in a patent dispute over Mr. Goodfellow's invention. Mr. Wallace represented NTP, a company aggressively defending its patents for wireless e-mail. He flew to Prague two days after first speaking to Mr. Goodfellow in early 2002 to introduce himself.

On a subsequent visit a year later, as Mr. Goodfellow remembers it, Mr. Wallace introduced him to a travel companion by saying: "Geoff's the inventor of wireless e-mail. My client patented some of its implementation workings."

DESPITE what might have been, Mr. Goodfellow says he has no regrets. His scorn for patents is widely shared by many innovators in Silicon Valley... "You don't patent the obvious," he said during a recent interview. "The way you compete is to build something that is faster, better, cheaper. You don't lock your ideas up in a patent and rest on your laurels."

Other intersting tidbits from the article include the fact that NTP hired Goodfellow as a consultant and put him under NDA, gagging him from speaking about his work during the lawsuit against RIM. He was asked to explain his inventions on a blackboard, while lawyers listening to his presentation were instructed not to take notes because they could be used against NTP in invalidating its patents. It looks like this smoking gun may dash any hopes NTP has of appealing the USPTO's preliminary invalidation of their 5 core patents.

"The moral of the story is that for a long time now the patent system has been misused," said Mitchell D. Kapor, founder of the Lotus Development Corporation, the software publisher, and an adviser to Mr. Goodfellow in the early 1990's. "If it had been properly used, NTP would never have been issued its patents, and they never would have had a basis to pursue a lawsuit against R.I.M."

Venture Capitalist: "Abolish Software Patents"

A venture capitalist in New York is speaking out against patents, urging their abolishment:

My point is this. Innovation is an evolution. Everybody takes from everybody else. A truly competitve darwinian system where it's survival of the fittest may produce orders of magnitude more innovation than a system where someone gets to keep a lid on their invention (if in fact it is their invention which is a serious problem with our current system).

I think of the patent system in our country a bit like the tenure system in our academic institutions. It protects ideas and people that may not deserve to be protected and it allows for underperformance and it stifles creativity and energy.

Clearly we cannot abolish our system of intellectual property overnight. Many billions of dollars (including tens of millions of capital I manage) has been invested in companies that are using intellectual property protection as a competitive weapon. If there is going to be change, it must be gradual.

But I am encouraging all of us, the readers of this blog, other bloggers, academics, politicians, public policy wonks, and anyone else who cares about innovation in our country and the world at large to think hard about a world without patents and less intellectual property protection broadly speaking and what impact that would have on innovation and the flow of capital around innovation.

I believe we need a new way in the years to come. Our current approach is holding us back, not taking us forward.

Keep in mind, VC's are the guys funding innovative startups. They aren't puppets of large corporations, and they aren't crackpots.

Ridiculous Patent: Computer Solitaire

Can one patent the idea of playing card games like solitaire on a computer? Apparently so.

Once you've got your patent and your government-enforced monopoly on computer solitaire, can you send out threatening cease and desist letters to infringers? Apparently so.

Patents Kill Open Source

While working on his PhD Thesis in Computer Science, Andrew Tridgell (now famous for his work in creating SAMBA) grew discontent with waiting for whole files to be transferred over a dial-up connection when only a small update to the file had been made. So he invented the now-pervasive rsync algorithm and tool, which is currently in wide-use for remotely synchronizing data across machines. The tool is popular because it performs this function more efficiently than anything else available.

But there was a problem: someone else had independently invented a similar concept in 1994, and held a patent on the process. Through a "gentleman's agreement," the patent holder agreed not to pursue litigation against rsync.

In 1999, a new idea based on the rsync algorithm was ripe for implementation: RProxy. It held the promise of reducing web browser traffic by as much as 85%, alleviating a lot of frustration among dialup users of the time, as well as being useful today in much of the developing world. There was one problem: the 1994 patent. Because of this patent, RProxy never saw the light of day.

Perhaps this is no big loss. Perhaps RProxy would have had little, if any, impact. But we'll never know. The free market never got to decide. Maybe one day RProxy will be resurrected, but if it is to hope to avoid patent infringement claims, it must wait until at least 2014 to do so.

Do you know of other free (or proprietary) software that was killed by murky patent claims? We often hear of big companies like RIM and Microsoft running afoul of patent trolls, but the press seems less interested in the story of the little guy, whose innovations were smothered by the massive weight of hundreds of thousands of patents granted each year. What software don't we have today, because of the patent system?

Nathan Myhrvold: Champion of the Patent Troll

Nathan Myhrvold published an editorial in the Wall Street Journal, defending the status quo of the patent system. No reform is needed, he claims, because the only real problem is that there is too much patent infringement by companies commercializing technology.

This is no surprise coming from Myhrvold -- he's the CEO of Intellectual Ventures, a patent holding firm (aka, a patent troll). Myhrvold (and the company) claim that they are an "invention company," conceiving and patenting "our own inventions in-house through a world-renowned staff of internal and external scientists and engineers." Yet the truth is that their strategy is to purchase shady patents from failed companies and paper inventors, and then use them in a extortion game against larger players -- fitting the definition of 'troll' to a tee. For evidence of that, look at how they bid up the Commerce One XML patent portfolio to nearly $15 million, before Novell purchased and released the patents openly. If Intellectual Ventures would have been successful in acquiring those patents (no matter how illegitimate they were), you can be sure they would now be engaged in a massive shakedown of the entire Internet industry, where XML is almost as pervasive as HTTP.

To avoid turning this into an ad hominem attack, let's take a look at what Myhrvold has to say:

Tech companies ... win by muscling their way to sufficient market share to become a de facto standard (some would say monopoly). Because patents don't figure in this business model, tech companies don't hold the patent system in high regard.

Patents don't figure into a business model centered around gaining monopoly control of a market? Come again? Patents are nothing more than a government-backed monopoly.

It gets better:

Many of the largest tech companies have a standing policy that engineers are not allowed to read patents or check whether their work infringes. Why bother to look, if you know you'll find lots of infringement? Besides the cost, it's a distraction that might hurt time to market. Their strategy is simple -- damn the torpedoes, full speed ahead.

Here, Myhrvold is either disingenuous, or extremely naive. Having spent 15 years in leadership at Microsoft, I'd rule out Myhrvold being naive, so that leaves us with disingenuous. Engineers aren't encouraged to look at patents because 1) engineers aren't lawyers, 2) engineers are paid to do engineering, not to wade through patent thicket legalese, 3) software patent quality is extremely low, so finding a patent claim which might somehow be broadly applied to an engineer's current work means virtually nothing, and 4) software patents have undefined or unclear borders, so determining whether infringement has or might occur cannot realistically be determined.

Myhrvold also talks about how, yes, Microsoft had to fight off some bad patents, but that it wasn't a big deal because Microsoft eventually won those cases in court. Nevermind that smaller startups don't have the huge pile of cash that Microsoft does, and that any such suit against them is likely to result in the smaller player folding, and never mind that Microsoft doesn't agree on this point -- Myhrvold will assert these 'facts' as truth, and expect you to be swayed by them. I don't think you, gentle reader, are that dumb. But apparently Nathan Myhrvold does.

More Examiners = Better Patents?

This comes from the comment section of TCS Daily:

I don't think examiners will *ever* have enough time to sufficiently determine obviousness, utility, and search through all possible prior art, not matter how many you hire.

Expediency seems to be the major concern among those interested parties pushing for more examiners. If you speed up the patent process, this is sure to attract more patent applicants. More applicants means you need more examiners. And under the current funding structure, it also means more money for the USPTO. And thus we ever circle towards granting more patents, expanding the scope of what patents can cover, further impeding true innovation by constructing unnavigable patent thickets.

Instead, why can't we just admit that no single person is able to justly and fairly determine patentability, no matter how super genius the examiner might be. It is too large a task, and far too subjective in nature. The utility requirement alone is nearly impossible to determine without examining a working copy of the invention, yet we abandoned submitting working copies many decades ago. Prior art? Are you kidding? Even though I am personally considered an expert in one tiny little sliver of the field of computer security, I can't keep up with every paper or book that is published in that area, and I don't have 15 100-page applications sitting in my inbox waiting for me to 'grant' or 'reject'.

Instead of putting all this burden on the examiner and then sqwaking like banshees when bad patents get through, why don't we just realign incentives to produce the behaviour we desire?

For example, let's make the applicant do the prior art search. Anyone finding invalidating prior art after a patent issues gets a finders fee, which is funded by a fine levied on the applicant (who did an insufficient search before trying to acquire their 20-year monopoly).

For example, let's open up the examination process to those beyond the one PTO employee doing the examination, and let's go ahead and let adversarial forces (competitors, existing players) use their own survival as an incentive to participate. And let's let the poor overworked patent examiner act more as a judge or referee in this activity (instead of adversary, advocate, AND judge).

For example, let's stop funding the PTO with patent applicant and patent-holder dollars. At least let's not fund it exclusively that way, so that the office is accountable to me, the taxpayer, and to my elected officials, instead of just to patentees.

For example, let's make the filing of Statutory Invention Registrations FREE, to give inventors without monopoly interests and incentive to file SIRs (thus making prior art searches much easier, and blocking bad patents from being granted). If we could convince players that SIRs have all the defensive advantages of regular patents, without the negative amassing of patents for 'mutually assured destruction' gaming, this would also reduce the number of bad patents sought by big corporations, etc.

The system is set up to act as it now does. When the incentives are there to encourage entities to abuse them, what did we think would happen? No wonder patent trolling has become not only a well-established practice, but an entire business model -- we set up the rules and incentives for just this result.

How $19 in a Patent Troll's Hands Can Cost the Economy $9,000,000

A selected quote from RIM's Jim Balsillie's congressional testimony:

In the NTP case, NTP mass- mailed letters to 47 companies, including RIM in January 2000. RIM responded with a letter to NTP asking for additional information about its patents. NTP claims never to have received the letter, and made no further effort to contact RIM until NTP filed suit. Nonetheless, RIM was found liable for willful infringement based on what RIM did or did not do after receiving NTP’s letter. The fact that the patent owner took no interest and forwarded no claim charts or otherwise showed there was an infringement simply did not matter. A recent case in the Court of Appeals for the Federal Circuit further suggests that, even if NTP had acknowledged receipt of RIM’s letter, it would have no obligation to respond to inquiries or to provide support for its claims of infringement in order for it to obtain enhanced damages for willfulness.

Thus, even though a patent owner does not deem the potential infringement worthy of investing time and money to do a proper infringement analysis and may never even bring a claim of infringement, the targeted defendant must do so or risk treble damages and the brand of “willful infringer.”

To illustrate the economic costs inherent in this bias towards patentees, one need only consider the NTP case. With 1920 claims in the NTP patents, each of the 47 companies would likely have to spend at least $200,000 for a legal opinion of invalidity and/or non- infringement. Thus, for about $19 in postage, a single patentee like NTP can require 47 companies to divert over $9 million from other industry endeavors to obtain legal opinions regarding NTP’s patents. Although it is currently rare for that many claims to be asserted, it is common for companies to receive dozens of such letters each year and to spend several hundreds of thousands or more each year on external legal opinions alone (not including the salaries and overhead for those that deal with these issues).

And, keep in mind, that's $9 million before any legal action even happens -- this is simply the cost of reacting to a cease-and-desist letter sent from a patent holder.

And, if you are a small company instead of a large one, it is doubtful you could ever justify spending $200,000 to respond to a single cease-and-desist.

The mafia never had a deal so sweet as that given to holders of shady patents.

Congressional Oversight Hearing on Patent Quality

The Committee on the Judiciary held an oversight hearing yesterday on the topic of patent quality (you can read testimony or listen to the proceedings at their website). John Dudas, Director of the USPTO, outlined some of the internal reforms that they are trying to use to accomplish the goal of improving quality, but it is clear from the testimony of the other three witnesses that the job of patent reform is much bigger than the USPTO. James Balsillie, Chairman and Co-Chief Executive Officer, Research in Motion, Robert A. Stewart Director and Chief Patent Counsel of Americas, UBS AG, and Mark A. Lemley William H. Neukom Professor of Law, Stanford Law School all testified about some striking problems in the current system, and proposed many useful measures to alleviate these problems. If you want your eyes opened to the true costs of patent trolling, take a look at Balsillie's testimony.

While there are more drastic reforms that we'd love to see pushed through, the ideas brought to Congress's attention during these hearings would certainly help. Let's hope that our elected officials can draft some reform legislation with real teeth in it.

Are Ideas "Property?"

During the eBay v. MercExchange Supreme Court hearing of last week, Justice Scalia remarked, "We're talking about a property right here and a property owner has the right to exclude others from using his property."

But are we really talking about a property right, when we are talking about government-granted monopolies over ideas? Thomas Jefferson would certainly have disagreed with Scalia, but I wanted to further explain why this is such an absurd notion.

Some intellectuals have defined "property" as "the fruits of labor." Under this definition, ideas might qualify as property (as long as one ignores the 'Eureka' theory of ideas, in which case ideas are not the pure fruit of one's labor). But this definition is insufficient, both historically and philosophically.

Historically, property rights only arise in the presence of scarcity and conflict. For example, during our ancestors' hunter-gatherer days, there was no concept of land as a property right. This is largely because land was not scarce, and there was little conflict over its use. As populations grew, different groups crowded each other for the best hunting grounds, and conflict due to scarcity occurred -- but these conflicts were communal, and were usually resolved with tribal battles or other types of violence. The concept of parcels of land owned by individuals did not arise until the introduction of agriculture, which gave rise to a new type of scarcity and conflict: competition for the most productive plots of land. The same is true of other types of property throughout history: scarcity and conflict resolution plays a key role in definition of property rights.

It extends naturally, then, that when there is no scarcity of a certain resource, there cannot be any conflict over that resource's use. And, since there is no conflict, property laws for that resource are unnecessary. No wars were fought in pre-industrial times over ownership of the air we breath, and no laws were needed to regulate atmospheric property rights. This is because air was once considered to be a nearly infinite resource.

Are ideas scarce? Can the fact that I once imagined and invented a method for folding a paper into the shape of a peanut somehow cause you not to think of the same (or very similar) idea? Of course not. Ideas are not exclusive, are not scarce, and conflict over their use does not naturally occur. It is only when governments grant exclusive rights to the use of an idea (via patents) that such conflict can arise, only through government regulation can scarcity of ideas be born. Ideas are not property.

But even worse, idea monopolies introduce a way for unconnected individuals to magically impede on the true property rights of one another. If I had been granted a patent on my hypothetical peanut-shaped paper folding technique, I would have the legal authority to restrict you from engaging in folding your paper, with your hands and the exertion of your labor, into the patented peanut shape. My government-invented paper-peanut patent 'property' right over an intangible idea would trespass on your natural physical property right over your hands, your energy, and your tangible paper. Such a conflict between imaginary idea property and real physical property is inevitable, and it is made worse by the fact that my idea monopoly extends not only against you, but against every single living soul who is subject to the patent regime's enforcement.

So, yes, Justice Scalia, we are talking about a property right here: we're talking about every individual's right to create using their own property in any way they see fit, as nature intended. We're talking about the government unreasonably interfering with that essential, natural right. And we're talking about how that is a bad deal for inventors, consumers, businesses, and society as a whole.

(for an expansion on these ideas, see Against Intellectual Property by Stephan Kinsella)

Ridiculous Patent: String-phone

If you thought the patent wars over the invention of the telephone were silly, get a load of this patent:

Thankfully, the patent issued in 1980 and thus expired a couple of years ago. The world is now free to build primitive phones from string and paper cups again.
(via IP Funny)

Other ridiculous patents:

• Plotlines
• Rice
• Peanut Butter and Jelly Sandwich
• Swinging
• the Comb-over
• Smiley Faces
• Pop-up Ads
• Anti-gravity Device
• Serving Cereal
• highlighting Numbers