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<title>Daniel Ravicher's FFII panel presentation |
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- GNU Project - Free Software Foundation</title> |
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<div class="article reduced-width"> |
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<h2>New Developments in Patent Practice: Assessing the Risks and Cost |
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of Portfolio Licensing and Hold-ups</h2> |
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<address class="byline">by Daniel B. Ravicher</address> |
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<div class="infobox"> |
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<p>This is a transcript of a panel presentation given by Daniel B. |
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Ravicher as the executive director of the Public Patent Foundation on |
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Wednesday, November 10, 2004, at a conference organized by the |
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Foundation for a Free Information Infrastructure (FFII) in Brussels, |
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Belgium. The transcription was done by Aendrew Rininsland.</p> |
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<p>The GNU Project agrees with the premise that <a |
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href="/philosophy/limit-patent-effect.html">patents on computational |
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ideas are bad</a>, but it disagrees with the assumption that nonfree |
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programs are morally legitimate competitors.</p> |
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</div> |
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<hr class="thin" /> |
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<p>Thanks. I think, for me, the whole two days of conferences boils to |
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really one question, and the whole debate boils down to one question: |
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“How do we want success in the software industry to be |
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determined?” |
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</p> |
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|
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<p> |
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Or, another way, who do we want to determine those who succeed and |
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those who fail in the software industry? Because there are various |
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people who can make this decision. We can have bureaucrats make the |
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decision about who wins and who fails, or we can let consumers make |
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the decision about who wins and who fails. If we want software to |
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succeed because we want it to succeed on its merits and be the best |
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software that the public can have, it's more likely we want a system |
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that lets consumers and end-users make the decision about which |
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software is selected—not bureaucrats. |
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</p> |
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|
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<p> Now, what does that have to do with patents? The larger you make a |
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patent system, the more you allow the patent system to impact |
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software, and the more you're allowing success in the software |
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industry to be determined by patent-based bureaucrats, those who can |
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take advantage of the bureaucracy which grants and resolves disputes |
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regarding patent rights. It's a bureaucratic competition, not one |
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based on the decision of consumers. That means it's less likely for |
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the merits to be determinative of what software succeeds. |
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</p> |
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|
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<p> |
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We have to recognize that even without software patents, large |
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developers have intrinsic advantages over small developers. Large |
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developers have the resources, large developers have the |
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relationships, large developers have the distribution channels, large |
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developers have the brand. So even without software patents, large |
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developers are still at an advantage—they start out at an |
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advantage. Well, then, the next question to me is, “If we have |
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software patents, does that increase the advantage of large developers |
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or decrease it?” because the patent system could benefit small |
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developers and therefore that could erode some of the naturally |
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existing benefits that large corporations have. |
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</p> |
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<p> |
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I think that point's been belaboured already. We know that small |
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developers are not benefited by a patent system, in fact, they are |
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prejudiced by a patent system. So, enlarging a patent system to apply |
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to software development only enlarges the disadvantage small |
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developers have in competition. Again, it comes back: Who do we want |
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to make the decision about which software developers succeed, do we |
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want consumers, based on merits and functionality and price, or |
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bureaucrats, based on whom patents are granted to and who wins patent |
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infringement cases? |
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</p> |
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<p> |
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The other thing we need to recognize is whether or not the patent |
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system has a preference for users of certain types of software. A |
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patent system as we have in the United States benefits those under a |
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software distribution scheme which allows them to charge |
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royalties. This is because all software has to deal with the risk of |
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infringing on patents. Patents don't discriminate between open-source |
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or freely licensed software and proprietary software: a patent covers |
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certain technology, it doesn't matter how the software's distributed. |
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But proprietary software is licensed with a fee so the cost of that |
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risk can be passed on to the consumer without them recognizing |
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it. They don't see it, it's baked into the price of the software |
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they're buying and if you were to ask a consumer if they've bought |
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insurance against being sued for patent infringement, they would say |
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they don't believe that have. |
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<span class="gnun-split"></span>But in fact they had, because if someone |
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sues a user of Microsoft software, Microsoft has built in the cost of |
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stepping in to defend them from that into the cost of the license |
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fee. On the other side, if you have royalty-free distributed software |
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such as open-source or free software, you can't bake in the cost of |
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that risk so it becomes more transparent. And this makes consumers or |
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users think that open-source is in a worse position than proprietary |
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software when it's actually not. It's just because the open-source |
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distribution scheme does not allow someone to sneak in the cost of |
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that risk to make it opaque instead of transparent. So the patent |
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system not only prefers large developers over small developers, it |
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also prefers users of proprietary software over open-source software. |
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</p> |
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<p> |
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If we come back to the initial question, which I think this is all |
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about, how do we want success in the software market to be determined? |
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Do we want it to be determined by these types of factors, or do we |
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want it to be determined by who can get the best software at the best |
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price? |
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</p> |
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<p> |
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Now, I think it's important to concede the point that people on the |
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other side will make, which is, will a less-onerous patent system, or |
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they would call it a “less-beneficial” patent system, I |
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call it less-onerous, will harm their business, because people could |
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copy them. Well, large businesses aren't worried about being |
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copied. They really aren't. At least not by other large businesses, |
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this is why they enter into cross-licenses all the time. |
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<span class="gnun-split"></span>If a large |
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company really didn't want its software to be copied, why is it |
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licensing its patent portfolio to every other big company in the |
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world? Because it can't stop them from copying it once they enter into |
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that agreement, so this argument that, “Well, we're worried |
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about people copying our software,” the most likely people to |
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copy your software are other large businesses because they have the |
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resources and the ability and the distribution channels and the brand |
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and the relationships. Why are you letting them copy it? You must not |
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be that worried about it. |
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</p> |
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<p> |
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And so the question is, then, does a patent system have a |
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net-beneficial effect or a net-detrimental effect on software |
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development? I think we've seen already it only decreases the ability |
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for open-source or royalty-free license software to compete with |
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proprietary software. In the end you have to ask, is less competition |
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beneficial for the software industry? I don't know what Europeans |
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think about that, I think Europeans are very pro-competition and I |
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know us on the other side of the Atlantic are very pro-competition as |
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well, and so the answer is never less competition is better for |
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consumers. And so I think as we bring the point home, if we had two |
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seconds in an elevator to pitch this idea to someone, software patents |
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have a net-negative effect on competition in the software |
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industry. |
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<span class="gnun-split"></span>True, they may increase competition in some ways, but the |
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net-effect is anti-competitive. And that's what putting the ability to |
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decide success in the software industry in the hands of the patent |
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office or in hands of the courts does. If you need examples, if people |
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think that's just rhetoric or your opinion, just point to the United |
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States. Microsoft is a very successful software company, I don't think |
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anyone would debate that. They've never had to sue anyone for patent |
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infringement. So they claim they need patents, but yet they've never |
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had to use them. They cross-license them and that's where we wonder, |
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“If you're worried about people copying, then why are you |
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cross-licensing them to people?” |
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</p> |
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<p> |
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You know, the last point is, who else does a patent system benefit? If |
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it benefits large developers over small developers, is there anyone |
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else? A patent system benefits non-developers. Do we really want a |
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bureaucratic system that helps people who aren't adding anything to |
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society? What I mean by non-developers are trolls—which |
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everyone here is familiar with—people who get a patent either |
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by applying for it or acquiring it in some asset purchase and then use |
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it to tax other developers, other distributors of a product. |
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</p> |
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<p> |
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Do we really want a system which encourages people to not add products |
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or services to the market place but only detracts from the profits and |
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capabilities of those that do? |
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</p> |
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<p>Copyright © 2006 Daniel B. Ravicher</p> |
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<p class="unprintable">Updated: |
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