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<font color="#669933" face="Verdana, Arial, Helvetica, sans-serif">>></font><font face="Verdana, Arial, Helvetica, sans-serif">
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<font color="#669933">Resources: Invention</font></font></b></font>
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<td width="561"> <font color="#ff6633" face="Arial, Helvetica, sans-serif" size="6"><b><a name="top"></a></b></font><font color="#ff6633" face="Arial, Helvetica, sans-serif" size="6"><b>New
legal code</b></font> <p> <font color="#669933" face="Arial, Helvetica, sans-serif" size="3"><b>Copyrights
should replace software patents </b></font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">Second
in a two-part series </font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2"><b>By
Ben Klemens</b></font>
</p><p> <img src="0805inve_files/0805inve01.jpg" alt="0805inve01.jpg" align="right" border="0" height="250" hspace="3" vspace="3" width="250">
<font face="Arial, Helvetica, sans-serif" size="2">Last month
I discussed the fundamental impossibility of distinguishing
between software and pure mathematics and argued that software
patents should be abolished as a result. If software is math
and pure mathematics is supposed to be unpatentable, then
every software patent issued exposes a legal contradiction.
</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">This
month I explore the current economic consequences of having
that contradiction enshrined in U.S. intellectual property
law and propose that instead of software patents, we rely
on another, already existing, method that can protect innovators
from exploitation: copyright. </font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">One of
the most common arguments from those who advocate software
patents is that software is just like any other technology.
Patents work great for pharmaceutical companies and integrated
circuits, so why shouldn't they work for software as well?</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">But there
is a key difference between software, on the one hand, and
physical technologies such as drugs and integrated circuits,
on the other: the software industry is not only massive but
massively decentralized. Every company with a Web page or
an accounting database has people on staff writing software
to support those systems--from the simplest script for automating
backups to complex, custom-built systems. </font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">Only
a relatively small number of firms make drugs or ICs, but
the software industry, with no equipment costs to speak of,
as well as the ubiquitous demand for software to oil the gears
of our lives, is unlike any other business. It not only includes
the usual full-time producers, such as Novell Inc. and Microsoft
Corp., but also a team of people in the basement of every
company in America. A study by the U.S. Department of Commerce's
Bureau of Economic Advisors found that in 2002 nearly as much
money was spent in the United States on software written in-house
as on prepackaged software--US $72 billion and $76 billion,
respectively.</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">But what
does the ubiquity of software creation have to do with patentability?
The answer lies in the fact that because programmers use similar,
if not identical, software and hardware tools to tackle common
needs, certain ideas are independently conceived over and
over again. But independent invention is not a defense against
claims of patent infringement.</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">Patents
are public records, and in a centralized industry with relatively
few players--such as pharmaceuticals--the assumption that
all patents are common knowledge is not unreasonable. The
relative handful of drug companies can each support a legal
department that is abreast of drug patents. </font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">Now let's
take a look at an example from the decentralized software
industry. U.S. telecommunications giant SBC Communications
Inc., in San Antonio, holds U.S. patents that are allegedly
infringed on by a broad range of Web pages--including the
Web site I threw together for the California Institute of
Technology's undergraduate intellectual property class. Some
businesses, such as Museum Tour, a company in Milwaukie, Ore.,
that sells educational toys, received letters demanding royalties
for patent infringement from SBC. Applying the logic of the
centralized industries, SBC's patents are public record, so
the toy company could have avoided its dispute with SBC by
hiring a patent attorney to do a full search of the software
patent database before putting up its Web site.</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">Part
of the problem is that infringing a software patent is so
easy, because so many patents have been issued in even the
most basic fields of computing. For example, just record a
macro to automate a repetitive task in writing an online document.
Suppose your word processor saves the macro as part of the
document (many do by default), and your macro bears a sufficient
resemblance to one of the more than 170 000 software patents
registered with the U.S. Patent and Trademark Office. Congratulations!
You've just engaged in worldwide distribution of an infringing
technology. If you are truly committed to avoiding liability
and following the law, then you will need to hire a lawyer
to do a full patent search before you click the Record Macro
button, design a database form, program a function to calculate
a piece of textbook math, or draw up a Web page.</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">Does
this sound absurd yet? Patents, designed for centralized industries,
have been applied to the most decentralized industry imaginable,
and the result is that patent law is taken only partly seriously.
Ronald Mann, a scholar at the University of Texas, in Austin,
interviewed venture capitalists and programmers and found
them resigned about software patents. Programmers don't do
patent searches on every line of code. Instead, they simply
expect that a patent attorney will demand royalties if the
need arises. Testimony to the U.S. Federal Trade Commission
by businessmen and programmers said the same thing: to stay
within the law requires such an absurd, paralyzing amount
of work that nobody bothers. Conversely, one would be hard-pressed
to find a pharmaceutical company that does not bother with
regular patent searches.</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">Patents
offer the benefit of fostering certain types of innovation,
but the law also imposes economic costs. Most notably, everyone
in the industry must spend money on remaining abreast of every
relevant patent. When "industry" means everyone with a computer,
that's an astronomical sum.</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">If a
person or company does not spend the money to clear its macros,
functions, and data structures, then it exposes itself to
liability. Defending oneself against a claim of patent infringement
can cost millions; it is easier to just pay a royalty so that
the claimant will go away. Filing (or buying) a vaguely worded
patent and sending out royalty demands has thus become a sure-fire
business model. Some companies have no business other than
seeking patent royalties and infringement damages. To give
one example from a long list, Acacia Technologies Group, in
Newport Beach, Calif., is suing nine U.S. cable TV providers,
claiming a patent on the software written by these cable companies
[see "The Patent Profiteers," </font><font face="Arial, Helvetica, sans-serif" size="2">IEEE
Spectrum</font><font face="Arial, Helvetica, sans-serif" size="2">,
June 2004].</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">There
is no sensible means of reconciling an industry that has massive
independent invention with a law that makes independent invention
a liability. So what's the solution? How can we protect programmers
and companies that invest in developing innovative new software
from being ripped off--without tying the entire software industry
up in red tape? The answer is copyright.</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">Copyrighting
is very different from patenting. First, there is no paperwork.
If you write an equation on the back of an envelope, then
you hold the copyright to it, and there is no need for lengthy
negotiations with the Library of Congress, as well as no need
to put your work in the public record. But if somebody finds
your envelope and plagiarizes the equation, then they are
guilty of infringement, and you may attempt to prosecute them
accordingly. </font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">But as
opposed to the case with patenting, independent invention
is a valid defense against claims of copyright infringement.
That is, if someone on the other side of the country should
write down the same equation independently, then that person
has done nothing wrong legally. Under a copyright regime,
where independent invention is a valid defense, provided you
have not reviewed and copied code from a copyright holder,
you are free to write all the code you can dream up independently.</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">Because
it doesn't offer a patent's monopoly protection, a copyright
is, in some ways, weaker protection than a patent, but is
there any evidence that innovation would be harmed without
patent protection? Before the </font><font face="Arial, Helvetica, sans-serif" size="2">In
re Alappat</font><font face="Arial, Helvetica, sans-serif" size="2">
ruling by the U.S. Court of Appeals Federal Circuit in July
1994, software was effectively protected only by copyright;
yet it would be difficult to claim that before 1994 the IT
industry was short on innovation. </font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">Copyright
still provides protection from the sort of shady dealings
that fair laws should prevent. If competitors find a way to
copy code out of one program and paste it into one of their
own, or if pirates mass-produce copies of an installation
CD, or if a disgruntled employee take the company's code base
to a competitor, then those people could still be prosecuted
under a copyright regime.</font>
</p><p> <font face="Arial, Helvetica, sans-serif" size="2">There
are many considerations to molding copyright laws to fit software
best, but in an industry with literally millions of independent
inventors, a copyright is much less likely to stifle innovation
than a patent or to impose the cost of hiring a standing army
of lawyers.</font>
</p><hr noshade="noshade" size="1">
<font color="#669933" face="Arial, Helvetica, sans-serif" size="3"><b>ABOUT
THE AUTHOR<font size="2"><br>
</font></b></font><font face="Arial, Helvetica, sans-serif" size="2">BEN
KLEMENS has a Ph.D. in social sciences from California Institute
of Technology, in Pasadena. He is currently a guest scholar
at The Brookings Institution, Washington, D.C. His book <i>Math
You Can't Use: Patents, Copyright, and Software</i> is to be
published by the Brookings Institution Press.</font>
<hr noshade="noshade" size="1"> <p align="right"> <font face="Arial, Helvetica, sans-serif" size="2">ILLUSTRATOR:
DAVID RODRIGUEZ</font>
</p><p align="right">
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