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This is one of of the biggest developments in the software industry ever because it incentivizes innovation (good for innovators, bad for copycats). It also fi

This is one of of the biggest developments in the software industry ever because it incentivizes innovation (good for innovators, bad for copycats). It also fills part of the void left by a broken patent system. We all know many software companies are ripping off other companies ideas on a regular basis. In many cases it's big incumbents taking ideas from upstarts competing with them (example: Facebook via Instagram ripping off stories from Snap). This decision should allow more competition from innovative newcomers and higher prices in software generally. Right now software is priced artificially low because very few vendors have any pricing power... because competitors can just rip off what they are doing. If that's not as easy companies with innovative ideas protected by strong ToS should be able to compete more aggressively and price their products much higher. I believe you're going to see many companies put all their content behind an "agree" button. This shift should also make acquisition prices go WAY up since companies will have to be priced more by the opportunity/IP rather than their replacement cost. This is a big deal.

mindcrime 9y ago
We all know many software companies are ripping off other companies ideas on a regular basis. "Ideas" in the abstract aren't protected, except by trade secret laws. Patents are, at least in theory, supposed to apply to something more concrete than a mere "idea". This decision should allow more competition from innovative newcomers What? No it won't, it'll inhibit innovation by putting more power in the hands of large incumbents who employ many lawyers and have large war chests to fund lawsuits. No startup is going to prevail in a lawsuit against Facebook unless a miracle happens, because they'll run out of money and close down before the case is ever settled. That is, if the "chilling effects" of this kind of ruling doesn't prevent them from ever getting started in the first place. This shift should also make acquisition prices go WAY up since companies will have to be priced more by the opportunity/IP rather than their replacement cost. This also works to inhibit innovation, as companies can lock out competitors via legal machinations, as opposed to needing to innovate continuously. This is a big deal. Maybe. It was a circuit court decision, so (in the US at least) to the extent that it establishes any precedent, it's only strictly applicable in the 4th circuit (for now).
- djyaz1200 9y ago
  It sounds like you are like many others in tech who believe everything should be open source. Good for you but some of us need to make money off of our life's work in innovation. Time will tell, I view this in a hopeful way as a shift in direction. I think companies that invest in innovative products big or small should be able to defend those innovations against being ripped off. Yes, fights over this will be resource intensive but there are ways to fund expensive litigation if winning is plausible. And of course the expense of litigation touches on all kinds of unrelated problems. "This also works to inhibit innovation, as companies can lock out competitors via legal machinations, as opposed to needing to innovate continuously." You're flat out wrong here. Companies will need to create their own innovations rather than ripping off others. This will give power to the the people actually innovating and encourage companies to invest in their own R&D. RE the 4th circuit, yes it's not the Supreme Court but it's a big decision in the right direction in my view... and suggests this and/or related issues may be heard by the supreme court. Ultimately software is not the open source cooperative utopia that many people like you hoped for. It is a ruthless for profit marketplace, and if you ever want to give the guy in the garage a chance you have to give him a mechanism to protect his ideas... and the patent system is not that mechanism right now. Perhaps terms of use will be? Maybe not, in any case the status quo is letting giant tech companies power and influence grow without limits... and that needs to change.
  - xfer 9y ago
    You seem to think that you can not sell open-source software. Yet all the linux based companies are doing that for decades now. There are many other examples.
    - djyaz1200 9y ago
      They sell support really, the software is free.
  - mindcrime 9y ago
    It sounds like you are like many others in tech who believe everything should be open source. Good for you but some of us need to make money off of our life's work in innovation. I'm not a FSF zealot or anything, not somebody who abhors the very existence of proprietary / closed-source software. That said, I do prefer OSS / Free Sofware in the general sense... but the rub is, software being F/OSS doesn't mean you can't make money from it. So I'm not really sure where you're coming from. Maybe not, in any case the status quo is letting giant tech companies power and influence grow without limits... and that needs to change. But this ruling benefits the tech giants at the expense of the "little guy". How many startups already never come into being because of fears of being sued by AmaGoogFaceSoft? And consider that most "innovation" is an incremental improvement to an existing "thing" and not some whole new thing cut from whole cloth. If you can't reverse engineer / clone products made by AmaGoogFaceSoft, Oracle, IBM, SAS, etc., it's going to be even harder for smaller companies to contribute their innovations.
Ace17 9y ago
This is an dangerously simplistic analysis. The world doesn't divide into "innovators" on one side and "copycats" on the other side. It would certainly be convenient, but it's simply not the case, especially when it comes to developing software. How would you call a company developing a smartly enhanced version of their competitor's product? A "copinovator"? And by the way: I don't see why anyone would want "higher prices for software" (which seems to be one of your goals). This only looks good if you narrow your vision down to the software you're trying to sell, ignoring the incredibly larger amount of third-party software you're already paying for.
- djyaz1200 9y ago
  Yes it's simplistic because it's a HN comment not a a doctoral thesis, but that doesn't mean it's wrong. The fact that most software is very cheap favors companies/VC's that already have money... because it means you have to go for scale over margin. That's a game for people with deep pockets. Example. Joe Smith builds innovative software. He sells this to 10 local businesses for $5K/mo each. He is able to take care of his family, hire a couple folks and live the american dream... no VC required. Then someone goes to his website, signs up, studies what he's done and copies this innovative software and sells it for $2.5K/month profitably because they don't have to incur the R&D costs or the lifetime of work experience Joe needed to come up with his innovations. Joe is forced to cut prices dramatically or be out of business. Joe's default path now is he must grow to $200K/month at all costs... sell a portion of his business to VC, then try to grow it to millions a month. Then sell more to VC. Rinse, repeat. This is nuts. People should be able to have innovative businesses that aren't copied and don't have the aim of scaling to infinity to enrich VC's. This is important because unlike other businesses such as construction the marginal cost for providing software is so close to zero you can (and many companies do) round it down to zero. I don't care if any of you agree with me. ...but ask yourself... is the tech landscape serving the guys in the garage right now? If not why not? I believe part of the reason is there is no strong protection for IP anymore. This case was an example of an egregious rip off and the offender was rightly penalized to the tune of $80m, then that penalty was upheld by an appeals court. I think that is a just outcome based on the limited info I have about it... and I am encouraged by the precedent. I hear many of you disagree, and you're certainly entitled to your opinion.

mindcrime 9y ago

We all know many software companies are ripping off other companies ideas on a regular basis. "Ideas" in the abstract aren't protected, except by trade secret laws. Patents are, at least in theory, supposed to apply to something more concrete than a mere "idea". This decision should allow more competition from innovative newcomers What? No it won't, it'll inhibit innovation by putting more power in the hands of large incumbents who employ many lawyers and have large war chests to fund lawsuits. No startup is going to prevail in a lawsuit against Facebook unless a miracle happens, because they'll run out of money and close down before the case is ever settled. That is, if the "chilling effects" of this kind of ruling doesn't prevent them from ever getting started in the first place. This shift should also make acquisition prices go WAY up since companies will have to be priced more by the opportunity/IP rather than their replacement cost. This also works to inhibit innovation, as companies can lock out competitors via legal machinations, as opposed to needing to innovate continuously. This is a big deal. Maybe. It was a circuit court decision, so (in the US at least) to the extent that it establishes any precedent, it's only strictly applicable in the 4th circuit (for now).

djyaz1200 9y ago
It sounds like you are like many others in tech who believe everything should be open source. Good for you but some of us need to make money off of our life's work in innovation. Time will tell, I view this in a hopeful way as a shift in direction. I think companies that invest in innovative products big or small should be able to defend those innovations against being ripped off. Yes, fights over this will be resource intensive but there are ways to fund expensive litigation if winning is plausible. And of course the expense of litigation touches on all kinds of unrelated problems. "This also works to inhibit innovation, as companies can lock out competitors via legal machinations, as opposed to needing to innovate continuously." You're flat out wrong here. Companies will need to create their own innovations rather than ripping off others. This will give power to the the people actually innovating and encourage companies to invest in their own R&D. RE the 4th circuit, yes it's not the Supreme Court but it's a big decision in the right direction in my view... and suggests this and/or related issues may be heard by the supreme court. Ultimately software is not the open source cooperative utopia that many people like you hoped for. It is a ruthless for profit marketplace, and if you ever want to give the guy in the garage a chance you have to give him a mechanism to protect his ideas... and the patent system is not that mechanism right now. Perhaps terms of use will be? Maybe not, in any case the status quo is letting giant tech companies power and influence grow without limits... and that needs to change.
- xfer 9y ago
  You seem to think that you can not sell open-source software. Yet all the linux based companies are doing that for decades now. There are many other examples.
  - djyaz1200 9y ago
    They sell support really, the software is free.
- mindcrime 9y ago
  It sounds like you are like many others in tech who believe everything should be open source. Good for you but some of us need to make money off of our life's work in innovation. I'm not a FSF zealot or anything, not somebody who abhors the very existence of proprietary / closed-source software. That said, I do prefer OSS / Free Sofware in the general sense... but the rub is, software being F/OSS doesn't mean you can't make money from it. So I'm not really sure where you're coming from. Maybe not, in any case the status quo is letting giant tech companies power and influence grow without limits... and that needs to change. But this ruling benefits the tech giants at the expense of the "little guy". How many startups already never come into being because of fears of being sued by AmaGoogFaceSoft? And consider that most "innovation" is an incremental improvement to an existing "thing" and not some whole new thing cut from whole cloth. If you can't reverse engineer / clone products made by AmaGoogFaceSoft, Oracle, IBM, SAS, etc., it's going to be even harder for smaller companies to contribute their innovations.

Ace17 9y ago

This is an dangerously simplistic analysis. The world doesn't divide into "innovators" on one side and "copycats" on the other side. It would certainly be convenient, but it's simply not the case, especially when it comes to developing software. How would you call a company developing a smartly enhanced version of their competitor's product? A "copinovator"? And by the way: I don't see why anyone would want "higher prices for software" (which seems to be one of your goals). This only looks good if you narrow your vision down to the software you're trying to sell, ignoring the incredibly larger amount of third-party software you're already paying for.

djyaz1200 9y ago
Yes it's simplistic because it's a HN comment not a a doctoral thesis, but that doesn't mean it's wrong. The fact that most software is very cheap favors companies/VC's that already have money... because it means you have to go for scale over margin. That's a game for people with deep pockets. Example. Joe Smith builds innovative software. He sells this to 10 local businesses for $5K/mo each. He is able to take care of his family, hire a couple folks and live the american dream... no VC required. Then someone goes to his website, signs up, studies what he's done and copies this innovative software and sells it for $2.5K/month profitably because they don't have to incur the R&D costs or the lifetime of work experience Joe needed to come up with his innovations. Joe is forced to cut prices dramatically or be out of business. Joe's default path now is he must grow to $200K/month at all costs... sell a portion of his business to VC, then try to grow it to millions a month. Then sell more to VC. Rinse, repeat. This is nuts. People should be able to have innovative businesses that aren't copied and don't have the aim of scaling to infinity to enrich VC's. This is important because unlike other businesses such as construction the marginal cost for providing software is so close to zero you can (and many companies do) round it down to zero. I don't care if any of you agree with me. ...but ask yourself... is the tech landscape serving the guys in the garage right now? If not why not? I believe part of the reason is there is no strong protection for IP anymore. This case was an example of an egregious rip off and the offender was rightly penalized to the tune of $80m, then that penalty was upheld by an appeals court. I think that is a just outcome based on the limited info I have about it... and I am encouraged by the precedent. I hear many of you disagree, and you're certainly entitled to your opinion.