Intellectual-Property Panel Tackles the Issue of Patents

By Darryl K. Taft  |  Posted 2005-04-22

Intellectual-Property Panel Tackles the Issue of Patents

CAMBRIDGE, Md.—Does intellectual property protection policy promote or inhibit innovation?

A panel at the ACTs (Association for Computing Technology) Intellectual Property and Technology Summit here discussed that question.

"Defining innovation broadly, I think IP is in support of development," said Keith Maskus, an economics professor from the University of Colorado.

"I believe IP does promote innovation; where it doesnt is where the system breaks down," said Dana Colarulli, government relations and legislative counsel for the IPO (Intellectual Property Owners Association).

"IP is critical to robust development; its the currency of ideas," Colarulli said. "IPO believes IP promotes innovation, and we need to have a balanced system and look for ways to invest."

Melanie Wyne, director of public policy at the CompTIA (Computing Technology Industry Association), said, "We support strong IP protection for software, both here in the U.S. and abroad."

Wyne said that having worked for a software startup, she knows the value of patents.

"The second question venture capitalists ask you after Whats your software do? is How many patents do you have?" she said.

Larry Rosen, former general counsel for the Open Source Initiative and a leading open-source supporter, said, "Im here to represent the attitudes of many, many, many people around the world who think that for the software industry, patents are not the creative engine; they are the caboose."

Rosen noted that patents typically come long after the fact and "serve as a disincentive rather than an incentive" to innovation.

"So with respect to software patents, they shouldnt exist," Rosen said, particularly patents for standards.

"Patents that cover industry standards are far more dangerous than others, because they allow companies to put up toll booths on the information highway."

Rosen said patents in industries that feature high costs of development and long lead times, like the pharmaceutical industry, are more understandable, "but not in software. Software is obsolete by the time it gets out the door."

He said software typically has 18-month development cycles.

"There is a lot of investment to start a company, but the tiny amount of time it takes to do the programming is nothing like the time it takes to build a business out of it, and theres no reason the patent system should have to protect that," Rosen said.

Next Page: Industry standards at issue.

Industry standards at issue

Rosen then pointed to the example of the open-source communitys relationship with industry standards bodies such as the W3C (World Wide Web Consortium) and OASIS (the Organization for the Advancement of Structured information Standards) and the petition several open-source leaders sent to OASIS objecting to the organizations latest intellectual property policy.

Click here to read more about leaders demanding OASIS change its policy.

"What we did with the W3C and are doing with OASIS is were saying, If you want to work together on software standards, then you need to make those standards available to the public," Rosen said.

At issue was the OASIS policy that allowed for companies to hold RAND (reasonable and non-discriminatory) patent licenses on technology submitted to the standards body.

The group protested this and demanded that all standards be royalty-free.

OASIS did not change its policy, which actually encourages royalty free standards, and it went into effect last week.

However, Rosen noted that IBM, a leading OASIS contributor, recently came out with a statement saying it was going to make its OASIS-related patents royalty-free.

"Well, that shows that patents are not detrimental," CompTIAs Wyne said. "IBM had a smart business reason to make that change."

Rosen replied: "I respectfully disagree."

In an interview after the panel, Rosen told eWEEK: "Despite the fact that there remains an OASIS policy does not satisfy the open source community; we still won—because none of the major companies, particularly IBM, will be doing any RAND patents in OASIS. Even though the standards folks insist on keeping RAND in their policy, the companies wont do RAND, and if they do well be right back on their ass."

Moreover, it is the bigger companies that can afford to fight legal battles regarding intellectual property, Rosen said.

"Smaller companies cant afford the fight. These rules are no help to Linus Torvalds; this is no help to the Apache Foundation or the smaller companies who cant afford to fight."

Yet, earlier this week at the Linux on Wall Street conference in New York, Karen Copenhaver, executive vice president and general counsel at Black Duck Software Inc., raised the issue of the open-source community raising up to jointly defend itself legally.

"Most companies had never given a software indemnity before, and the reason why they shouldnt for open source is that it was built in the community, and I believe the community needs to defend it," Copenhaver said.

"Everybody giving indemnities is not really helpful—what would be helpful is if we could jointly defend. The first time a patent claim is raised, the entire community needs to defend."

Indeed, Copenhaver said she sees change coming in this area.

"Were going to see a lot of change in patents; a lot of community involvement. And youre going to find its easier to defend a patent claim in open source than in the proprietary world."

In addition, Copenhaver said, "The interesting intersection is what we used to be concerned about with antitrust law is now where we are with IP."

She added that antitrust suits "are the most inefficient way to deal with a problem."

Meanwhile, at the ACT conference, Colarulli said he believes the USPTO (U.S. Patent and Trademark Office) "has not been doing a wonderful job for technology" and "the quality coming out of there has been suspect."

Maskus agreed, saying part of the problem is that there is "an increasing tendency at the USPTO to grant patents for really small pieces of innovation. And Im surprised the U.S. sticks to a one-size-fits-all approach."

Meanwhile, also at the Linux on Wall Street conference earlier this week, Douglas Heintzman, Director of Technical Strategy, Software Group, IBM Corp., said that even as IBM is one of the largest holders of intellectual property in the world, "We believe the patent system is in need of reparation, and we need to find the right balance. The issue of license proliferation is of course a challenge, and I do think we need to consolidate some of these things."

Read more here about open-source licensing reform.

However, Rosen humored the ACT panel and said, regarding any patent reform, "dont let patent attorneys redesign the law. They screwed it up, and they shouldnt be allowed to screw it up more."

More seriously, however, he said, "The real challenge is if were going to revise the law, we need to ask do they [revisions] do good or do they do harm."

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