057. softwarepatents.html.typ

softwarepatents.html
Are Software Patents Evil?


March 2006(This essay is derived from a talk at Google.)A few weeks ago I found to my surprise that I'd been granted four patents.  
This was all the more surprising
because I'd only applied for three.  The patents aren't mine, of
course.  They were assigned to Viaweb, and became Yahoo's when they
bought us.  But the news set me thinking about the question of
software patents generally.Patents are a hard problem.  I've had to advise most of the startups
we've funded about them, and despite years of experience I'm still
not always sure I'm giving the right advice.One thing I do feel pretty certain of is that if you're against
software patents, you're against patents in general.  Gradually our
machines consist more and more of software.  Things that used to
be done with levers and cams and gears are now done with loops and
trees and closures.  There's nothing special about physical embodiments
of control systems that should make them patentable, and the software
equivalent not.Unfortunately, patent law is inconsistent on this point.  Patent
law in most countries says that algorithms aren't patentable.  This
rule is left over from a time when "algorithm" meant something like
the Sieve of Eratosthenes.  In 1800, people could not see as readily
as we can that a great many patents on mechanical objects were
really patents on the algorithms they embodied.Patent lawyers still have to pretend that's what they're doing when
they patent algorithms.  You must not use the word "algorithm" in
the title of a patent application, just as you must not use the
word "essays" in the title of a book.  If you want to patent an
algorithm, you have to frame it as a computer system executing that algorithm.
Then it's mechanical; phew.  The default euphemism for algorithm
is "system and method."  Try a patent search for that phrase and
see how many results you get.Since software patents are no different from hardware patents,
people who say "software patents are evil" are saying simply "patents
are evil."  So why do so many people complain about software patents
specifically?I think the problem is more with the patent office than the concept
of software patents.  Whenever software meets government, bad things
happen, because software changes fast and government changes slow.
The patent office has been overwhelmed by both the volume and the
novelty of applications for software patents, and as a result they've
made a lot of mistakes.The most common is to grant patents that shouldn't be granted.  To
be patentable, an invention has to be more than new.  It also has
to be non-obvious.  And this, especially, is where the USPTO has
been dropping the ball. Slashdot has an icon that expresses the
problem vividly: a knife and fork with the words "patent pending"
superimposed.The scary thing is, this is the only icon they have for
patent stories.  Slashdot readers now take it for granted that a
story about a patent will be about a bogus patent.
That's how bad the problem has become.The problem with Amazon's notorious one-click patent, for example,
is not that it's a software patent, but that it's obvious.  Any
online store that kept people's shipping addresses would have
implemented this.  The reason Amazon did it first was not that they
were especially smart, but because they were one of the earliest
sites with enough clout to force customers to log in before they
could buy something. 
[1]We, as hackers, know the USPTO is letting people patent the knives
and forks of our world.  The problem is, the USPTO are not hackers.
They're probably good at judging new inventions for casting steel
or grinding lenses, but they don't understand software yet.At this point an optimist would be tempted to add "but they will
eventually."  Unfortunately that might not be true.  The problem
with software patents is an instance of a more general one: the
patent office takes a while to understand new technology.  If so,
this problem will only get worse, because the rate of technological
change seems to be increasing.  In thirty years, the patent office
may understand the sort of things we now patent as software, but
there will be other new types of inventions they understand even
less.Applying for a patent is a negotiation.  You generally apply for a
broader patent than you think you'll be granted, and the examiners
reply by throwing out some of your claims and granting others.  So
I don't really blame Amazon for applying for the one-click patent.
The big mistake was the patent office's, for not insisting on
something narrower, with real technical content.  By granting such
an over-broad patent, the USPTO in effect slept with Amazon on the
first date.  Was Amazon supposed to say no?Where Amazon went over to the dark side was not in applying for the
patent, but in enforcing it.  A lot of companies (Microsoft, for
example) have been granted large numbers of preposterously over-broad
patents,  but they keep them mainly for defensive purposes.  Like
nuclear weapons, the main role of big companies' patent portfolios
is to threaten anyone who attacks them with a counter-suit.  Amazon's
suit against Barnes & Noble was thus the equivalent of a nuclear
first strike.That suit probably hurt Amazon more than it helped them.  Barnes &
Noble was a lame site; Amazon would have crushed them anyway.  To
attack a rival they could have ignored, Amazon put a lasting black
mark on their own reputation.  Even now I think if you asked hackers
to free-associate about Amazon, the one-click patent would turn up
in the first ten topics.Google clearly doesn't feel that merely holding patents is evil.
They've applied for a lot of them.  Are they hypocrites?  Are patents
evil?There are really two variants of that question, and people answering
it often aren't clear in their own minds which they're answering.
There's a narrow variant: is it bad, given the current legal system,
to apply for patents? and also a broader one: is it bad that the
current legal system allows patents?These are separate questions.  For example, in preindustrial societies
like medieval Europe, when someone attacked you, you didn't call
the police.  There were no police.  When attacked, you were supposed
to fight back, and there were conventions about how to do it.  Was
this wrong?  That's two questions: was it wrong to take justice
into your own hands, and was it wrong that you had to?  We tend to
say yes to the second, but no to the first.  If no one else will
defend you, you have to defend yourself.  
[2]The situation with patents is similar.  Business is a kind of
ritualized warfare.  Indeed, it evolved from actual warfare: most
early traders switched on the fly from merchants to pirates depending
on how strong you seemed.  In business there are certain rules
describing how companies may and may not compete with one another,
and someone deciding that they're going to play by their own rules
is missing the point.  Saying "I'm not going to apply for patents
just because everyone else does" is not like saying "I'm not going
to lie just because everyone else does."  It's more like saying
"I'm not going to use TCP/IP just because everyone else does." Oh
yes you are.A closer comparison might be someone seeing a hockey game for the
first time, realizing with shock that the players were deliberately
bumping into one another, and deciding that one would on no account
be so rude when playing hockey oneself.Hockey allows checking.  It's part of the game.  If your team refuses
to do it, you simply lose.  So it is in business.  Under the present
rules, patents are part of the game.What does that mean in practice?  We tell the startups we fund not
to worry about infringing patents, because startups rarely get sued
for patent infringement.  There are only two reasons someone might
sue you: for money, or to prevent you from competing with them.
Startups are too poor to be worth suing for money. And in practice
they don't seem to get sued much by competitors, either.  They don't
get sued by other startups because (a) patent suits are an expensive
distraction, and (b) since the other startups are as young as they
are, their patents probably haven't issued yet. 
[3]
Nor do startups,
at least in the software business, seem to get sued much by established
competitors.  Despite all the patents Microsoft holds, I don't know
of an instance where they sued a startup for patent infringement.
Companies like Microsoft and Oracle don't win by winning lawsuits.
That's too uncertain.  They win by locking competitors out of their
sales channels.  If you do manage to threaten them, they're more
likely to buy you than sue you.When you read of big companies filing patent suits against smaller
ones, it's usually a big company on the way down, grasping at
straws.  For example, Unisys's attempts to enforce their patent on
LZW compression.  When you see a big company threatening patent
suits, sell.  When a company starts fighting over IP, it's a sign
they've lost the real battle, for users.A company that sues competitors for patent infringement is like
a defender who has been beaten so thoroughly that he turns to plead
with the referee.  You don't do that if you can still reach the
ball, even if you genuinely believe you've been fouled.  So a company
threatening patent suits is a company in trouble.When we were working on Viaweb, a bigger company in the e-commerce
business was granted a patent on online ordering, or something like
that.  I got a call from a VP there asking if we'd like to license
it.  I replied that I thought the patent was completely bogus, and
would never hold up in court.  "Ok," he replied.  "So, are you guys
hiring?"If your startup grows big enough, however, you'll start to get sued,
no matter what you do.  If you go public, for example, you'll be
sued by multiple patent trolls who hope you'll pay them off to go
away.  More on them later.In other words, no one will sue you for patent infringement till
you have money, and once you have money, people will sue you whether
they have grounds to or not.  So I advise fatalism.  Don't waste
your time worrying about patent infringement.  You're probably
violating a patent every time you tie your shoelaces.  At the start,
at least, just worry about making something great and getting lots
of users.  If you grow to the point where anyone considers you worth
attacking, you're doing well.We do advise the companies we fund to apply for patents, but not
so they can sue competitors.  Successful startups either get bought
or grow into big companies.  If a startup wants to grow into a big
company, they should apply for patents to build up the patent
portfolio they'll need to maintain an armed truce with other big
companies.  If they want to get bought, they should apply for patents
because patents are part of the mating dance with acquirers.Most startups that succeed do it by getting bought, and most acquirers
care about patents.  Startup acquisitions are usually a build-vs-buy
decision for the acquirer.  Should we buy this little startup or
build our own?  And two things, especially, make them decide not
to build their own: if you already have a large and rapidly growing
user base, and if you have a fairly solid patent application on
critical parts of your software.There's a third reason big companies should prefer buying to building:
that if they built their own, they'd screw it up.  But few big
companies are smart enough yet to admit this to themselves.  It's
usually the acquirer's engineers who are asked how hard it would
be for the company to build their own, and they overestimate their
abilities.  
[4]
A patent seems to change the balance.  It gives the
acquirer an excuse to admit they couldn't copy what you're doing.
It may also help them to grasp what's special about your technology.Frankly, it surprises me how small a role patents play in the
software business.  It's kind of ironic, considering all the dire
things experts say about software patents stifling innovation, but
when one looks closely at the software business, the most striking
thing is how little patents seem to matter.In other fields, companies regularly sue competitors for patent
infringement.  For example, the airport baggage scanning business
was for many years a cozy duopoly shared between two companies,
InVision and L-3.  In 2002 a startup called Reveal appeared, with
new technology that let them build scanners a third the size.  They
were sued for patent infringement before they'd even released a
product.You rarely hear that kind of story in our world.  The one example
I've found is, embarrassingly enough, Yahoo, which filed a patent
suit against a gaming startup called Xfire in 2005.  Xfire doesn't
seem to be a very big deal, and it's hard to say why Yahoo felt
threatened.  Xfire's VP of engineering had worked at Yahoo on similar
stuff-- in fact, he was listed as an inventor on the patent Yahoo
sued over-- so perhaps there was something personal about it.  My
guess is that someone at Yahoo goofed.  At any rate they didn't
pursue the suit very vigorously.Why do patents play so small a role in software?  I can think of
three possible reasons.One is that software is so complicated that patents by themselves
are not worth very much.  I may be maligning other fields here, but
it seems that in most types of engineering you can hand the details
of some new technique to a group of medium-high quality people and
get the desired result.  For example, if someone develops a new
process for smelting ore that gets a better yield, and you assemble
a team of qualified experts and tell them about it, they'll be able
to get the same yield.  This doesn't seem to work in software.
Software is so subtle and unpredictable that "qualified experts"
don't get you very far.That's why we rarely hear phrases like "qualified expert" in the
software business.  What that level of ability can get you is, say,
to make your software compatible with some other piece of software--
in eight months, at enormous cost.  To do anything harder you need
individual brilliance.  If you assemble a team of qualified experts
and tell them to make a new web-based email program, they'll get
their asses kicked by a team of inspired nineteen year olds.Experts can implement, but they can't design.
Or rather, expertise in implementation is the only kind most people,
including the experts themselves, can measure. 
[5]But design is a definite skill.  It's not just an airy intangible.
Things always seem intangible when you don't understand them.
Electricity seemed an airy intangible to most people in 1800.  Who
knew there was so much to know about it?  So it is with design.
Some people are good at it and some people are bad at it, and there's
something very tangible they're good or bad at.The reason design counts so much in software is probably that there
are fewer constraints than on physical things.  Building physical
things is expensive and dangerous.  The space of possible choices
is smaller; you tend to have to work as part of a larger group; and
you're subject to a lot of regulations.  You don't have any of that
if you and a couple friends decide to create a new web-based
application.Because there's so much scope for design in software, a successful
application tends to be way more than the sum of its patents.  What
protects little companies from being copied by bigger competitors
is not just their patents, but the thousand little things the big
company will get wrong if they try.The second reason patents don't count for much in our world is that
startups rarely attack big companies head-on, the way Reveal did.
In the software business, startups beat established companies by
transcending them.  Startups don't build desktop word processing
programs to compete with Microsoft Word. 
[6]
They build Writely.
If this paradigm is crowded, just wait for the next one; they run
pretty frequently on this route.Fortunately for startups, big companies are extremely good at denial.
If you take the trouble to attack them from an oblique angle, they'll
meet you half-way and maneuver to keep you in their blind spot.  To
sue a startup would mean admitting it was dangerous, and that often
means seeing something the big company doesn't want to see.  IBM
used to sue its mainframe competitors regularly, but they didn't
bother much about the microcomputer industry because they didn't
want to see the threat it posed.  Companies building web based apps
are similarly protected from Microsoft, which even now doesn't want
to imagine a world in which Windows is irrelevant.The third reason patents don't seem to matter very much in software
is public opinion-- or rather, hacker opinion.  In a recent interview,
Steve Ballmer coyly left open the possibility of attacking Linux
on patent grounds.  But I doubt Microsoft would ever be so stupid.
They'd face the mother of all boycotts.  And not just from the
technical community in general; a lot of their own people would
rebel.Good hackers care a lot about matters of principle, and they are
highly mobile.  If a company starts misbehaving, smart people won't
work there.  For some reason this seems to be more true in software
than other businesses.  I don't think it's because hackers have
intrinsically higher principles so much as that their skills are
easily transferrable.  Perhaps we can split the difference and say
that mobility gives hackers the luxury of being principled.Google's "don't be evil" policy may for this reason be the most
valuable thing they've discovered.  It's very constraining in some
ways.  If Google does do something evil, they get doubly whacked
for it: once for whatever they did, and again for hypocrisy.  But
I think it's worth it.  It helps them to hire the best people, and
it's better, even from a purely selfish point of view, to be
constrained by principles than by stupidity.(I wish someone would get this point across to the present
administration.)I'm not sure what the proportions are of the preceding three
ingredients, but the custom among the big companies seems to be not
to sue the small ones, and the startups are mostly too busy and too
poor to sue one another.  So despite the huge number of software
patents there's not a lot of suing going on.  With one exception:
patent trolls.Patent trolls are companies consisting mainly of lawyers whose whole
business is to accumulate patents and threaten to sue companies who
actually make things.  Patent trolls, it seems safe to say, are
evil.  I feel a bit stupid saying that, because when you're saying
something that Richard Stallman and Bill Gates would both agree
with, you must be perilously close to tautologies.The CEO of Forgent, one of the most notorious patent trolls, says
that what his company does is "the American way." Actually that's
not true. The American way is to make money by creating wealth, not by suing people. 
[7]
What companies like Forgent do is actually the proto-industrial
way.  In the period just before the industrial revolution, some of
the greatest fortunes in countries like England and France were
made by courtiers who extracted some lucrative right from the crown--
like the right to collect taxes on the import of silk-- and then
used this to squeeze money from the merchants in that business.  So
when people compare patent trolls to the mafia, they're more right
than they know, because the mafia too are not merely bad, but bad
specifically in the sense of being an obsolete business model.Patent trolls seem to have caught big companies by surprise.  In
the last couple years they've extracted hundreds of millions of
dollars from them.  Patent trolls are hard to fight precisely because
they create nothing.  Big companies are safe from being sued by
other big companies because they can threaten a counter-suit.  But
because patent trolls don't make anything, there's nothing they can
be sued for.  I predict this loophole will get closed fairly quickly,
at least by legal standards.  It's clearly an abuse of the system,
and the victims are powerful.
[8]But evil as patent trolls are, I don't think they hamper innovation
much.  They don't sue till a startup has made money, and by that
point the innovation that generated it has already happened.  I
can't think of a startup that avoided working on some problem because
of patent trolls.So much for hockey as the game is played now.  What about the more
theoretical question of whether hockey would be a better game without
checking?  Do patents encourage or discourage innovation?This is a very hard question to answer in the general case.  People
write whole books on the topic.  One of my main hobbies is the
history of technology, and even though I've studied the subject for
years, it would take me several weeks of research to be able to say
whether patents have in general been a net win.One thing I can say is that 99.9% of the people who express opinions
on the subject do it not based on such research, but out of a kind
of religious conviction.  At least, that's the polite way of putting
it; the colloquial version involves speech coming out of organs not
designed for that purpose.Whether they encourage innovation or not, patents were at least
intended to.  You don't get a patent for nothing.  In return for
the exclusive right to use an idea, you have to publish it,
and it was largely to encourage such openness that patents were
established.Before patents, people protected ideas by keeping them secret.  With
patents, central governments said, in effect, if you tell everyone
your idea, we'll protect it for you.  There is a parallel here to
the rise of civil order, which happened at roughly the same time.
Before central governments were powerful enough to enforce order,
rich people had private armies.  As governments got more powerful,
they gradually compelled magnates to cede most responsibility for
protecting them.  (Magnates still have bodyguards, but no longer
to protect them from other magnates.)Patents, like police, are involved in many abuses.  But in both
cases the default is something worse. The choice is not "patents
or freedom?" any more than it is "police or freedom?" The actual
questions are respectively "patents or secrecy?" and "police or
gangs?"As with gangs, we have some idea what secrecy would be like, because
that's how things used to be.  The economy of medieval Europe was
divided up into little tribes, each jealously guarding their
privileges and secrets.  In Shakespeare's time, "mystery" was
synonymous with "craft."   Even today we can see an echo of the
secrecy of medieval guilds, in the now pointless secrecy of the
Masons.The most memorable example of medieval industrial secrecy is probably
Venice, which forbade glassblowers to leave the city, and sent
assassins after those who tried.  We might like to think we wouldn't
go so far, but the movie industry has already tried to pass laws
prescribing three year prison terms just for putting movies on
public networks.  Want to try a frightening thought experiment? If
the movie industry could have any law they wanted, where would they
stop?  Short of the death penalty, one assumes, but how close would
they get?Even worse than the spectacular abuses might be the overall decrease
in efficiency that would accompany increased secrecy.  As anyone
who has dealt with organizations that operate on a "need to know"
basis can attest, dividing information up into little cells is
terribly inefficient.  The flaw in the "need to know" principle is
that you don't know who needs to know something.  An idea
from one area might spark a great discovery in another.  But the
discoverer doesn't know he needs to know it.If secrecy were the only protection for ideas, companies wouldn't
just have to be secretive with other companies; they'd have to be
secretive internally.  This would encourage what is already the
worst trait of big companies.I'm not saying secrecy would be worse than patents, just that we
couldn't discard patents for free.  Businesses would become more
secretive to compensate, and in some fields this might get ugly.
Nor am I defending the current patent system.  There is clearly a
lot that's broken about it.   But the breakage seems to affect
software less than most other fields.In the software business I know from experience whether patents
encourage or discourage innovation, and the answer is the type that
people who like to argue about public policy least like to hear:
they don't affect innovation much, one way or the other.  Most
innovation in the software business happens in startups, and startups
should simply ignore other companies' patents.  At least, that's
what we advise, and we bet money on that advice.The only real role of patents, for most startups, is as an element
of the mating dance with acquirers.  There patents do help a little.
And so they do encourage innovation indirectly, in that they give
more power to startups, which is where, pound for pound, the most
innovation happens.  But even in the mating dance, patents are of
secondary importance.  It matters more to make something great and
get a lot of users.Notes[1]
You have to be careful here, because a great discovery often
seems obvious in retrospect.  One-click ordering, however, is not
such a discovery.[2]
"Turn the other cheek" skirts the issue; the critical question
is not how to deal with slaps, but sword thrusts.[3]
Applying for a patent is now very slow, but it might actually
be bad if that got fixed.  At the moment the time it takes to get
a patent is conveniently just longer than the time it takes a startup
to succeed or fail.[4]
Instead of the canonical "could you build this?" maybe the corp
dev guys should be asking "will you build this?" or even "why haven't
you already built this?"[5]
Design ability is so hard to measure that you can't even trust
the design world's internal standards.  You can't assume that someone
with a degree in design is any good at design, or that an eminent
designer is any better than his peers.  If that worked, any company
could build products as good as Apple's just by hiring 
sufficiently qualified designers.[6]
If anyone wanted to try, we'd be interested to hear from them.
I suspect it's one of those things that's not as hard as everyone
assumes.[7]
Patent trolls can't even claim, like speculators, that they
"create" liquidity.[8]
If big companies don't want to wait for the government to take
action, there is a way to fight back themselves.  For a long time
I thought there wasn't, because there was nothing to grab onto.
But there is one resource patent trolls need: lawyers.  Big technology
companies between them generate a lot of legal business.  If they
agreed among themselves never to do business with any firm employing
anyone who had worked for a patent troll, either as an employee or
as outside counsel, they could probably starve the trolls of the
lawyers they need.Thanks to Dan Bloomberg, Paul Buchheit, Sarah Harlin, 
Jessica Livingston, and Peter Norvig
for reading drafts of this, to Joel Lehrer and Peter Eng for answering
my questions about patents, and to Ankur Pansari for inviting me
to speak.Japanese Translation