10 ms·

Here’s why economists hate software patents

102 points by Libertatea 13y ago

rayiner 13y ago
The economic justification for patents is to protect from the free rider problem. If A invests 10 million in a technology, and B just copies it, B can undercut A on the market because it doesn't have to recoup R&D costs in the price. That leads to companies underinvesting in expensive R&D, because the winning play is to copy, not invent. For most software patents, the capital cost is almost nothing. Even if it took a programmer a whole year to invent something, that's like 100k--no money at all in the larger sense. So it makes no sense to protect a capital investment that's negligible. That said, the article really fails to explain why lawyers don't want to have a categorical exclusion for software patents. Usually, you want a legs principle to get to the root of why something is bad, not address bad situations ad hoc. Why are software patents bad? Sequential innovation, as mentioned in the article? If so, that should be the basis for the exclusion, not whether something is software or not.
- deleted 13y ago
  [deleted]
- bazillion 13y ago
  While Company A copying Company B might work in theory, there's still the matter of whether or not Company B has access to the source code (assuming Company A didn't open source the thing they spent all that time on). In a hardware sense, I can take apart an object (like a smart phone), and see how it works. In a software sense, it's much harder to decompile something and see how it is working if the scope of the project is large enough. Software patents are bad (in my opinion) because the things which get patented are the things that form the foundation for what almost every programmer works with in their daily routine. Things that are abstract ideas such as "Connecting to a server to process a payment" might seem like a logical thing to patent as a software idea, but if I transferred it to its real life analogue it becomes unpatentable as a business practice: Person A gives payment to Person B, who then forwards payment to Person C. All this being said, I'm not aware of any legitimate software patent suit that didn't involve corporate espionage. Can anyone link anything to show me a legitimate use of our court system in order to protect an innovation that should be protected?
- conjecTech 13y ago
  One person spending a year working on something is not exactly the high end of that equation. Even if one person ends up getting something worth protecting, a company may have been employing hundreds, if not thousand of individuals in an attempt to develop new technology in a space. Additionally, you're not actually considering the all-in cost of programmers. About 5 years ago I heard the total all-in cost of a junior engineer was closer to 250k, and I would imagine it's roughly in the ballpark for computer scientists if not higher.....That combination of numbers gets big fast. I think the conversation should moreso be talking about what makes an idea patentable rather than simply saying whether or not all ideas within a given domain should be exempt.
- drpgq 13y ago
  "the article really fails to explain why lawyers don't want to have a categorical exclusion for software patents" Could it be as simple as software patents are good for lawyers and bad for almost everyone else?
  - roc 13y ago
    A tricky bit, often overlooked, is that the line between hardware and software is fuzzy and moves constantly. What's hardware today is virtualized or emulated or decomposed into a general instruction set tomorrow. Is infringement contingent upon hardware implementation? Partial hardware implementation? Substantial hardware implementation? If you have an awesome DSP and I virtualize it and then use hardware acceleration to speed up that virtualization, is that a hardware implementation, or software? Saying "no software patents" as a practical matter is hard to nail down objectively, without just generalizing it to "no patents on digital anything". Which becomes a larger upheaval than people tend to consider.
    - studentrob 13y ago
      That bridge could be crossed when we come to it. I don't see this discussion happening among any legislators. The majority of them don't care to recognize software patents as a problem, much less debate over how to define what is software vs hardware.
      - btilly 13y ago
        That bridge has already been crossed - that exact argument helped establish software patents in the first place. (See http://www.mttlr.org/voleleven/campbell-kelly.pdf http://www.mttlr.org/voleleven/campbell-kelly.pdf for the history.)
    - marssaxman 13y ago
      Software patents are so clearly harmful that "no patents on digital anything" might well be a price worth paying to get rid of them.
- ataggart 13y ago
  Lacking any analysis of the costs of the patent system, the above is not "economic justification", but rather just heaping assumption upon assumption. Stephan Kinsella has written extensively in opposition to the state's intellectual "property" laws.
- 6ren 13y ago
  What if it takes more than a year? What if they are working much harder to invent something than regular, $100k employment? What if not everyone has the ability to do it? What if, for many programmers who pour in the resources, they don't end up inventing anything (or the market doesn't materialise, they're too late etc)? Why should anyone do all that if it's not protected? For the argument of encouraging investment, the investment should be measured accurately, including risk. Note: I'm talking about real invention (e.g. relational database, regular expression searching), almost all software patents aren't. EDIT to clarify: (1) if someone is more capable, more educated, more talented, works longer, works harder etc, you generally must pay them more, hence greater capital investment. (2) To reward success in a risky endeavour is not about rewarding "luck", but making the reward worth the risk, in order to encourage others. This is an economics-and-law argument for patents by analogy with high-risk resource exploration (e.g. gold, oil).
  - rayiner 13y ago
    In economic terms, the purpose of patents is to protect capital investment, not reward talent or inspiration or luck. So if you're a super-genius that invents relational databases in an afternoon, it doesn't serve the economic purpose of patents to give you a patent on that invention. The reasoning is that because it cost you almost nothing to come up with that invention, you're not disincentivized from inventing by someone's copying your technology.
- pravda 13y ago
  Well, I think we understand what you mean, but R&D costs are sunk costs. They have no relevence when setting prices. If you have a patent on, for example, the chainsaw, and are the sole manufacture of chainsaws, you can set the price of a chainsaw based solely on how much your tree-cutting-down gizmo is worth to the consumer.
  - rayiner 13y ago
    You're talking about long-run equilibrium which isn't totally relevant here (https://en.wikipedia.org/wiki/Market_power https://en.wikipedia.org/wiki/Market_power). In a perfectly competitive equilibrium market, you're right, producers are price takers. But we're not talking about wheat farming. When we're talking about the introduction of new products, etc, we're necessarily talking about markets that aren't in their long-term equilibrium. Such markets are where all the money is made. E.g. today, the CD drive market is probably in its long-run equilibrium and highly competitive, and there is no profit to be made producing CD drives. But it was a highly lucrative product for Sony when the technology was first introduced. In these contexts, producers do have a certain amount of pricing power, and can extract positive profits as a result. Moreover, even in perfectly competitive markets, where costs are irrelevant to prices, costs are relevant to companies' decisions about whether to engage in R&D. If the market dynamics are such that prices approach marginal cost, there is very little incentive to engage in R&D, because it won't be profitable. As a concrete example, say you're ARM and contemplating investing $1 billion to put a new quad-core 3 GHz 1W CPU on the market. Because this a new product, you have a certain amount of pricing power to begin with. That pricing power allows you to extract positive economic profits, at least until your design is copied and the market becomes highly competitive. For the whole exercise to be worth while, you have to recoup that $1 billion in R&D before the market becomes competitive and prices approach marginal costs of production. If your Chinese competitor can copy your design for $100 million in 6 months, they have a huge advantage. At that point both companies will together likely still have a lot of pricing power, but because your competitor had much lower R&D costs to get the same product, he can undercut you o price and still recoup his lower R&D expense. In that sort of market, the profitable strategy is to copy, not to do original R&D.
    - 13y ago
- dctoedt 13y ago
  > ... the article really fails to explain why lawyers don't want to have a categorical exclusion for software patents. Usually, you want a legs principle to get to the root of why something is bad, not address bad situations ad hoc. As a class, lawyers love systems in which bad situations are addressed ad hoc. All of their major incentives are aligned that way: + They get to tell their clients what the clients want to hear: "The law doesn't look good for what you want to do, but we've come up with what we think is a powerful argument that your particular situation should be treated differently." That's good for getting hired, and for staying hired by being perceived as a "team player." + They can earn the admiration of their peers for successfully persuading a court that the client's situation should indeed be treated differently than the law would otherwise require. That enhances reputation, which helps generate future business. + And of course let's not forget the direct economic incentives associated with ad hoc proceedings: Lawyers get to bill for factual investigation; legal research; opinion-writing; seeking discovery from the other side; responding to the other side's discovery requests; filing or responding to pre-trial motions; trial prep; the actual trial; and the inevitable appellate proceedings.
  - gizmo686 13y ago
    There is a difference between what individual lawyers want due to incentives, and what lawyers know is right. As an example, consider a similar case with programmers. It is in any individual programmers interest to right highly specialized, non-reusable code, as this keeps them employed. However most would also agree that generic, reusable code is better for the system as a whole. In the same way, lawyers can recognize that special cases make the system worse, while still pursuing special cases for personal benefit.
    - dctoedt 13y ago
      > ... lawyers can recognize that special cases make the system worse, while still pursuing special cases for personal benefit. This is eminently true -- but many, many lawyers would argue fiercely that special cases make the system better: more flexible, more accommodating of the needs of real people, etc. It's hard to say how much of that is due to incentives affecting perception. To quote Upton Sinclair, "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" [1] [1] http://en.wikiquote.org/wiki/Upton_Sinclair http://en.wikiquote.org/wiki/Upton_Sinclair
- AnthonyMouse 13y ago
  >Usually, you want a legs principle to get to the root of why something is bad, not address bad situations ad hoc. Why are software patents bad? Sequential innovation, as mentioned in the article? If so, that should be the basis for the exclusion, not whether something is software or not. The trouble with that is it's such an unclean line and there is so much money on the table that it doesn't solve the underlying problem of patent litigation proliferating in the software industry. To get rid of the trolls you have to get rid of the ambiguity as to whether what they're doing is allowed. "No software patents" is useful because it's clean. If your product is a piece of software, it allows you to immediately answer the question of "does it infringe any patents" with "no" and then get on with developing the product, instead of dealing with skittish investors who won't risk a pile of money against the probability that an army of trolls will jump out from under the bridge as soon as they start to recover their investment.
  - rayiner 13y ago
    That's a fair point, but there are less ad-hoc ways to accomplish that result. For example, if you get rid of reasonable royalty damages and force patent holders to prove actual damages, it'll become very hard for trolls to go forward with a suit. The alternative I favor is adding an element to infringement that requires some evidence of copying, reverse-engineering, or appropriation. Since the plaintiff has to plead the elements of a suit up front, this will shift the fact-intensive part of the litigation over to the plaintiff unless they can offer some evidence of bad conduct by the defendant. This changes the nature of a patent completely, but I think not in a bad way. If your patent is really worthwhile, independent invention should be negligibly probable.
    - AnthonyMouse 13y ago
      >For example, if you get rid of reasonable royalty damages and force patent holders to prove actual damages, it'll become very hard for trolls to go forward with a suit. Maybe. It could be worth trying. The concern is that trolls will just start selling a sham product in order to claim actual damages. And there is still the problem of industry incumbents using bad patents and the threat of ruinous litigation to destroy innovative smaller competitors. >This changes the nature of a patent completely, but I think not in a bad way. If your patent is really worthwhile, independent invention should be negligibly probable. If we could easily prove whether something was copied, sure. I think the problem is that it's so difficult for either side to prove that one way or the other, so whichever side has the burden of proof usually loses. If plaintiffs have to prove copying (and "proof" means something like defendants admitting they copied, and not something like the products being similar) then you're making serious trouble for legitimate patent holders when some Chinese supplier rips off their patents but they have no way to prove it wasn't independent invention. Which is where it comes down to pragmatics: Drug companies (for example) aren't going to stand for anything that would create that much exposure for them, so you either have to solve that problem for them or we're back to creating carve outs for different industries.
- marssaxman 13y ago
  The value of the man-year in that case is not the idea, but its implementation. Software ideas are effectively worthless; it's running code which has value, and code is adequately protected by copyright.
  - rayiner 13y ago
    That's true of most, but not all software. Most software is just moving bits around. The hard part is the writing millions of lines of code. But not all software is like that. Take Google's self driving cars, which are being patented. The hard work there isn't writing the code. Its figuring out, through expensive analysis and testing, how to accomplish the result. Many companies will choose to license Google's patents, but not its software, instead writing their own. The actual software development, once a spec is determined, is the easy part.
    - marssaxman 13y ago
      It's certainly possible that it works that way, but my hunch is that it doesn't, and that what's going on with a project like a self-driving car is as much about assembling good training data and tuning the constants to get the desired behavior as it is about inventing the algorithms. If they are at the point of having actual cars driving on actual roads then the theoretical work must have been finished long ago, and what they are actually doing is not some patentable new idea, but the down-to-earth engineering work of making it useful under as broad a range of real-world conditions as possible. It has certainly never been true, in my experience, that the actual software development is the easy part, regardless of the quality of the spec. A spec detailed enough to make the software development easy would, itself, be a piece of software; it is precisely that process of reducing the idea to all of its details and harmonizing all of its competing constraints that is the work of software development. I have no background in machine vision, navigation, or the like, but I have done some embedded software development, and one of my projects was a wearable device which did sensor fusion, data logging, networking, etc. It was a relatively small project, and the core algorithms were basically obvious as soon as we knew what the product was supposed to do, but it still took almost two years to implement it all, test it, see what real world data looked like, tune our constants, and run more tests, etc. There were many practical tasks involving power consumption, peripheral management, network communication, debugging, manufacturing tests, and the like which contained absolutely no new ideas but still had to be implemented in order for the product to succeed. There may have been a patentable invention in there somewhere, but who would ever license it? Anyone trying to solve the same problem would come up with something similar, and they'd still have 18-24 months of expensive development work to do getting a product designed and ready for market. If we'd patented that hypothetical idea, we'd have contributed nothing to the public sphere; the only value in such a patent would be to make it more difficult for someone else to follow in our footsteps, which is exactly the opposite of the reason the patent system was established in the first place!
FedRegister 13y ago
Are these the same economists that had NO IDEA that the crash in 2006 would happen? If so I think I've had quite enough of their opinions.
- deleted 13y ago
  [deleted]
- jmduke 13y ago
  This is somewhat akin to saying, "Are these the same programmers that had NO IDEA the dotcom bubble in 1999 would burst? If so I think I've had quite enough of their opinions."
  - smnrchrds 13y ago
    I think Y2K will be a better example for what you're trying to say.
    - aggronn 13y ago
      An even better one would be to say that economists are like the consultants to a massive and public government IT project thats 300 years into the making. Complexity built into the system from the start leads to recurring issues that can't be addressed because of entrenched managers, lazy analysts, and a 300 million line codebase. Thats not to say that if they started from scratch there wouldn't be some unforeseen bugs down the road.
      - dredmorbius 13y ago
        A bigger problem (see my Galbraith quote above) is that Economics seems curiously immune to the process of testability and improvement which are the hallmarks of real science. In fact, several key and foundational theorists expressly deny falsifiability or evidence-based theories. Which is sort of like writing code without ever referring to your specification, use-cases, and/or users, or in fact, compiling or running it.
- 13y ago
lowboy 13y ago
Economists hate her! Use this one weird old tip to patent software.
fiatmoney 13y ago
The bargain with a patent is supposed to be that a) you get to build/use/sell an invention exclusively for a certain length of time, in exchange for b) publicizing how you did it. A good number of software patents fail the second part of that test, to say nothing of originality etc., because they only declare the behavior and don't provide a reusable implementation - a lot of the time because they're derived from "wouldn't it be cool if..." spitballing sessions (especially in large companies).
James_Duval 13y ago
The Robert Sachs who commented wouldn't be the "Robert R Sachs" of Fenwick & West LLP whose job is establishing lists of patents for large companies, I suppose? Read his comment for some entertainingly wrong-headed views on how software (and, indeed, thought itself) works.
guard-of-terra 13y ago
They could as well start hating software patents around ten years ago, when we all did. Ten years and we didn't make any progress, how miserable is that?
lettergram 13y ago
My argument on patent reform, is why not only allow software patents for a year (perhaps two). Being the first on the market gives you 90% of the advantage and it keeps you innovating to push further faster, while at the same time allowing competition to spring up and keeping lawsuits low.

102 points by Libertatea 13y ago

The economic justification for patents is to protect from the free rider problem. If A invests 10 million in a technology, and B just copies it, B can undercut A on the market because it doesn't have to recoup R&D costs in the price. That leads to companies underinvesting in expensive R&D, because the winning play is to copy, not invent. For most software patents, the capital cost is almost nothing. Even if it took a programmer a whole year to invent something, that's like 100k--no money at all in the larger sense. So it makes no sense to protect a capital investment that's negligible. That said, the article really fails to explain why lawyers don't want to have a categorical exclusion for software patents. Usually, you want a legs principle to get to the root of why something is bad, not address bad situations ad hoc. Why are software patents bad? Sequential innovation, as mentioned in the article? If so, that should be the basis for the exclusion, not whether something is software or not.

deleted 13y ago
[deleted]
bazillion 13y ago
While Company A copying Company B might work in theory, there's still the matter of whether or not Company B has access to the source code (assuming Company A didn't open source the thing they spent all that time on). In a hardware sense, I can take apart an object (like a smart phone), and see how it works. In a software sense, it's much harder to decompile something and see how it is working if the scope of the project is large enough. Software patents are bad (in my opinion) because the things which get patented are the things that form the foundation for what almost every programmer works with in their daily routine. Things that are abstract ideas such as "Connecting to a server to process a payment" might seem like a logical thing to patent as a software idea, but if I transferred it to its real life analogue it becomes unpatentable as a business practice: Person A gives payment to Person B, who then forwards payment to Person C. All this being said, I'm not aware of any legitimate software patent suit that didn't involve corporate espionage. Can anyone link anything to show me a legitimate use of our court system in order to protect an innovation that should be protected?
conjecTech 13y ago
One person spending a year working on something is not exactly the high end of that equation. Even if one person ends up getting something worth protecting, a company may have been employing hundreds, if not thousand of individuals in an attempt to develop new technology in a space. Additionally, you're not actually considering the all-in cost of programmers. About 5 years ago I heard the total all-in cost of a junior engineer was closer to 250k, and I would imagine it's roughly in the ballpark for computer scientists if not higher.....That combination of numbers gets big fast. I think the conversation should moreso be talking about what makes an idea patentable rather than simply saying whether or not all ideas within a given domain should be exempt.
drpgq 13y ago
"the article really fails to explain why lawyers don't want to have a categorical exclusion for software patents" Could it be as simple as software patents are good for lawyers and bad for almost everyone else?
- roc 13y ago
  A tricky bit, often overlooked, is that the line between hardware and software is fuzzy and moves constantly. What's hardware today is virtualized or emulated or decomposed into a general instruction set tomorrow. Is infringement contingent upon hardware implementation? Partial hardware implementation? Substantial hardware implementation? If you have an awesome DSP and I virtualize it and then use hardware acceleration to speed up that virtualization, is that a hardware implementation, or software? Saying "no software patents" as a practical matter is hard to nail down objectively, without just generalizing it to "no patents on digital anything". Which becomes a larger upheaval than people tend to consider.
  - studentrob 13y ago
    That bridge could be crossed when we come to it. I don't see this discussion happening among any legislators. The majority of them don't care to recognize software patents as a problem, much less debate over how to define what is software vs hardware.
    - btilly 13y ago
      That bridge has already been crossed - that exact argument helped establish software patents in the first place. (See http://www.mttlr.org/voleleven/campbell-kelly.pdf http://www.mttlr.org/voleleven/campbell-kelly.pdf for the history.)
  - marssaxman 13y ago
    Software patents are so clearly harmful that "no patents on digital anything" might well be a price worth paying to get rid of them.
ataggart 13y ago
Lacking any analysis of the costs of the patent system, the above is not "economic justification", but rather just heaping assumption upon assumption. Stephan Kinsella has written extensively in opposition to the state's intellectual "property" laws.
6ren 13y ago
What if it takes more than a year? What if they are working much harder to invent something than regular, $100k employment? What if not everyone has the ability to do it? What if, for many programmers who pour in the resources, they don't end up inventing anything (or the market doesn't materialise, they're too late etc)? Why should anyone do all that if it's not protected? For the argument of encouraging investment, the investment should be measured accurately, including risk. Note: I'm talking about real invention (e.g. relational database, regular expression searching), almost all software patents aren't. EDIT to clarify: (1) if someone is more capable, more educated, more talented, works longer, works harder etc, you generally must pay them more, hence greater capital investment. (2) To reward success in a risky endeavour is not about rewarding "luck", but making the reward worth the risk, in order to encourage others. This is an economics-and-law argument for patents by analogy with high-risk resource exploration (e.g. gold, oil).
- rayiner 13y ago
  In economic terms, the purpose of patents is to protect capital investment, not reward talent or inspiration or luck. So if you're a super-genius that invents relational databases in an afternoon, it doesn't serve the economic purpose of patents to give you a patent on that invention. The reasoning is that because it cost you almost nothing to come up with that invention, you're not disincentivized from inventing by someone's copying your technology.
pravda 13y ago
Well, I think we understand what you mean, but R&D costs are sunk costs. They have no relevence when setting prices. If you have a patent on, for example, the chainsaw, and are the sole manufacture of chainsaws, you can set the price of a chainsaw based solely on how much your tree-cutting-down gizmo is worth to the consumer.
- rayiner 13y ago
  You're talking about long-run equilibrium which isn't totally relevant here (https://en.wikipedia.org/wiki/Market_power https://en.wikipedia.org/wiki/Market_power). In a perfectly competitive equilibrium market, you're right, producers are price takers. But we're not talking about wheat farming. When we're talking about the introduction of new products, etc, we're necessarily talking about markets that aren't in their long-term equilibrium. Such markets are where all the money is made. E.g. today, the CD drive market is probably in its long-run equilibrium and highly competitive, and there is no profit to be made producing CD drives. But it was a highly lucrative product for Sony when the technology was first introduced. In these contexts, producers do have a certain amount of pricing power, and can extract positive profits as a result. Moreover, even in perfectly competitive markets, where costs are irrelevant to prices, costs are relevant to companies' decisions about whether to engage in R&D. If the market dynamics are such that prices approach marginal cost, there is very little incentive to engage in R&D, because it won't be profitable. As a concrete example, say you're ARM and contemplating investing $1 billion to put a new quad-core 3 GHz 1W CPU on the market. Because this a new product, you have a certain amount of pricing power to begin with. That pricing power allows you to extract positive economic profits, at least until your design is copied and the market becomes highly competitive. For the whole exercise to be worth while, you have to recoup that $1 billion in R&D before the market becomes competitive and prices approach marginal costs of production. If your Chinese competitor can copy your design for $100 million in 6 months, they have a huge advantage. At that point both companies will together likely still have a lot of pricing power, but because your competitor had much lower R&D costs to get the same product, he can undercut you o price and still recoup his lower R&D expense. In that sort of market, the profitable strategy is to copy, not to do original R&D.
  - 13y ago
dctoedt 13y ago
> ... the article really fails to explain why lawyers don't want to have a categorical exclusion for software patents. Usually, you want a legs principle to get to the root of why something is bad, not address bad situations ad hoc. As a class, lawyers love systems in which bad situations are addressed ad hoc. All of their major incentives are aligned that way: + They get to tell their clients what the clients want to hear: "The law doesn't look good for what you want to do, but we've come up with what we think is a powerful argument that your particular situation should be treated differently." That's good for getting hired, and for staying hired by being perceived as a "team player." + They can earn the admiration of their peers for successfully persuading a court that the client's situation should indeed be treated differently than the law would otherwise require. That enhances reputation, which helps generate future business. + And of course let's not forget the direct economic incentives associated with ad hoc proceedings: Lawyers get to bill for factual investigation; legal research; opinion-writing; seeking discovery from the other side; responding to the other side's discovery requests; filing or responding to pre-trial motions; trial prep; the actual trial; and the inevitable appellate proceedings.
- gizmo686 13y ago
  There is a difference between what individual lawyers want due to incentives, and what lawyers know is right. As an example, consider a similar case with programmers. It is in any individual programmers interest to right highly specialized, non-reusable code, as this keeps them employed. However most would also agree that generic, reusable code is better for the system as a whole. In the same way, lawyers can recognize that special cases make the system worse, while still pursuing special cases for personal benefit.
  - dctoedt 13y ago
    > ... lawyers can recognize that special cases make the system worse, while still pursuing special cases for personal benefit. This is eminently true -- but many, many lawyers would argue fiercely that special cases make the system better: more flexible, more accommodating of the needs of real people, etc. It's hard to say how much of that is due to incentives affecting perception. To quote Upton Sinclair, "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" [1] [1] http://en.wikiquote.org/wiki/Upton_Sinclair http://en.wikiquote.org/wiki/Upton_Sinclair
AnthonyMouse 13y ago
>Usually, you want a legs principle to get to the root of why something is bad, not address bad situations ad hoc. Why are software patents bad? Sequential innovation, as mentioned in the article? If so, that should be the basis for the exclusion, not whether something is software or not. The trouble with that is it's such an unclean line and there is so much money on the table that it doesn't solve the underlying problem of patent litigation proliferating in the software industry. To get rid of the trolls you have to get rid of the ambiguity as to whether what they're doing is allowed. "No software patents" is useful because it's clean. If your product is a piece of software, it allows you to immediately answer the question of "does it infringe any patents" with "no" and then get on with developing the product, instead of dealing with skittish investors who won't risk a pile of money against the probability that an army of trolls will jump out from under the bridge as soon as they start to recover their investment.
- rayiner 13y ago
  That's a fair point, but there are less ad-hoc ways to accomplish that result. For example, if you get rid of reasonable royalty damages and force patent holders to prove actual damages, it'll become very hard for trolls to go forward with a suit. The alternative I favor is adding an element to infringement that requires some evidence of copying, reverse-engineering, or appropriation. Since the plaintiff has to plead the elements of a suit up front, this will shift the fact-intensive part of the litigation over to the plaintiff unless they can offer some evidence of bad conduct by the defendant. This changes the nature of a patent completely, but I think not in a bad way. If your patent is really worthwhile, independent invention should be negligibly probable.
  - AnthonyMouse 13y ago
    >For example, if you get rid of reasonable royalty damages and force patent holders to prove actual damages, it'll become very hard for trolls to go forward with a suit. Maybe. It could be worth trying. The concern is that trolls will just start selling a sham product in order to claim actual damages. And there is still the problem of industry incumbents using bad patents and the threat of ruinous litigation to destroy innovative smaller competitors. >This changes the nature of a patent completely, but I think not in a bad way. If your patent is really worthwhile, independent invention should be negligibly probable. If we could easily prove whether something was copied, sure. I think the problem is that it's so difficult for either side to prove that one way or the other, so whichever side has the burden of proof usually loses. If plaintiffs have to prove copying (and "proof" means something like defendants admitting they copied, and not something like the products being similar) then you're making serious trouble for legitimate patent holders when some Chinese supplier rips off their patents but they have no way to prove it wasn't independent invention. Which is where it comes down to pragmatics: Drug companies (for example) aren't going to stand for anything that would create that much exposure for them, so you either have to solve that problem for them or we're back to creating carve outs for different industries.
marssaxman 13y ago
The value of the man-year in that case is not the idea, but its implementation. Software ideas are effectively worthless; it's running code which has value, and code is adequately protected by copyright.
- rayiner 13y ago
  That's true of most, but not all software. Most software is just moving bits around. The hard part is the writing millions of lines of code. But not all software is like that. Take Google's self driving cars, which are being patented. The hard work there isn't writing the code. Its figuring out, through expensive analysis and testing, how to accomplish the result. Many companies will choose to license Google's patents, but not its software, instead writing their own. The actual software development, once a spec is determined, is the easy part.
  - marssaxman 13y ago
    It's certainly possible that it works that way, but my hunch is that it doesn't, and that what's going on with a project like a self-driving car is as much about assembling good training data and tuning the constants to get the desired behavior as it is about inventing the algorithms. If they are at the point of having actual cars driving on actual roads then the theoretical work must have been finished long ago, and what they are actually doing is not some patentable new idea, but the down-to-earth engineering work of making it useful under as broad a range of real-world conditions as possible. It has certainly never been true, in my experience, that the actual software development is the easy part, regardless of the quality of the spec. A spec detailed enough to make the software development easy would, itself, be a piece of software; it is precisely that process of reducing the idea to all of its details and harmonizing all of its competing constraints that is the work of software development. I have no background in machine vision, navigation, or the like, but I have done some embedded software development, and one of my projects was a wearable device which did sensor fusion, data logging, networking, etc. It was a relatively small project, and the core algorithms were basically obvious as soon as we knew what the product was supposed to do, but it still took almost two years to implement it all, test it, see what real world data looked like, tune our constants, and run more tests, etc. There were many practical tasks involving power consumption, peripheral management, network communication, debugging, manufacturing tests, and the like which contained absolutely no new ideas but still had to be implemented in order for the product to succeed. There may have been a patentable invention in there somewhere, but who would ever license it? Anyone trying to solve the same problem would come up with something similar, and they'd still have 18-24 months of expensive development work to do getting a product designed and ready for market. If we'd patented that hypothetical idea, we'd have contributed nothing to the public sphere; the only value in such a patent would be to make it more difficult for someone else to follow in our footsteps, which is exactly the opposite of the reason the patent system was established in the first place!

FedRegister 13y ago

Are these the same economists that had NO IDEA that the crash in 2006 would happen? If so I think I've had quite enough of their opinions.

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jmduke 13y ago
This is somewhat akin to saying, "Are these the same programmers that had NO IDEA the dotcom bubble in 1999 would burst? If so I think I've had quite enough of their opinions."
- smnrchrds 13y ago
  I think Y2K will be a better example for what you're trying to say.
  - aggronn 13y ago
    An even better one would be to say that economists are like the consultants to a massive and public government IT project thats 300 years into the making. Complexity built into the system from the start leads to recurring issues that can't be addressed because of entrenched managers, lazy analysts, and a 300 million line codebase. Thats not to say that if they started from scratch there wouldn't be some unforeseen bugs down the road.
    - dredmorbius 13y ago
      A bigger problem (see my Galbraith quote above) is that Economics seems curiously immune to the process of testability and improvement which are the hallmarks of real science. In fact, several key and foundational theorists expressly deny falsifiability or evidence-based theories. Which is sort of like writing code without ever referring to your specification, use-cases, and/or users, or in fact, compiling or running it.
13y ago

lowboy 13y ago

Economists hate her! Use this one weird old tip to patent software.

fiatmoney 13y ago

The bargain with a patent is supposed to be that a) you get to build/use/sell an invention exclusively for a certain length of time, in exchange for b) publicizing how you did it. A good number of software patents fail the second part of that test, to say nothing of originality etc., because they only declare the behavior and don't provide a reusable implementation - a lot of the time because they're derived from "wouldn't it be cool if..." spitballing sessions (especially in large companies).

James_Duval 13y ago

The Robert Sachs who commented wouldn't be the "Robert R Sachs" of Fenwick & West LLP whose job is establishing lists of patents for large companies, I suppose? Read his comment for some entertainingly wrong-headed views on how software (and, indeed, thought itself) works.

guard-of-terra 13y ago

They could as well start hating software patents around ten years ago, when we all did. Ten years and we didn't make any progress, how miserable is that?

lettergram 13y ago

My argument on patent reform, is why not only allow software patents for a year (perhaps two). Being the first on the market gives you 90% of the advantage and it keeps you innovating to push further faster, while at the same time allowing competition to spring up and keeping lawsuits low.