ites's Journal: Patents vs. the Independent Inventor

In July, the European Parliament will vote on a proposal entitled the "Computer Implemented Inventions Directive". Unless a clear majority of all MEPs - 367 of them - vote against the proposal, software patents will become law in Europe.

Who cares? What does it matter? Those who want to introduce software patents into Europe present them as a "protection for the independent inventor" and "essential to progress in the field". As an independent inventor, I hold a different opinion. I find these descriptions deceitful. Software patents are a loaded gun held by giant established software companies - who I call Big Software - and aimed at the independent inventor. Software patents will kill free and fair competition in the IT industry and the effects will be felt far and wide in our daily lives.

These are forceful statements, so I will explain.

Computer programs are defined as "literary works" by the Berne Convention. Copyright protects the expression - the code - of such a work. Copyright is automatic and costs nothing. The poorest artist is protected against theft of his or her work. The software industry has, since the age of personal computers and the Internet, grown very significantly, under the protection of copyright, and many major business have been started in garages, protected by copyright law.

Patents are quite different. They are a state-granted monopoly on an invention, or more generally, a process, or idea. They are expensive (about 10,000 Euro to apply for a patent, much more to defend it). A patent grants the holder an exclusive right to an idea. Yes, ideas can become private property.

I am a software writer - a programmer - and I own an independent software business. We do a large amount of research. We have invented many valuable ideas and technologies. We are, like many other small teams, one of those motors of innovation that created the dot-com era. And now we can patent our ideas, get monopolies on our inventions, the fruit of lifetimes of work.

Am I ecstatic? No, I'm not. On the contrary, I believe that in perhaps five years, by 2010, I will have to sell or close my business. Software patents are so dangerous that just writing and selling software may, by the time today's Computer Science students start their own businesses, be impossible and de-facto illegal.

Dangerous? Yes, to the independent inventor. And I'll explain why. Imagine our small team - 3 or four people - working for a year to build a new software product. It is a major and risky investment. We believe the product has an excellent market; we compete with large, very expensive products, but we do it much better, and the software is very low cost because we work using modern techniques. We are doing something essential to any healthy market: we are competing.

Now, under copyright laws, our product, being an entirely original expression, is protected. We work, we invent, we may sell the results and hope to profit.

But under software patent laws, our product, being the combination of tens of thousands of ideas, old and new, is in probable violation of someone's monopoly.

There is simply no other way to write software, any more than a musician can write a song using only original chords. We cannot know what patents we are infringing until we have finished our work, started to sell it, and someone sues us.

• We cannot discover what patents apply. There are over a hundred thousand software patents in the US, described in complex legal language. New patents are usually secret for 18 months, about the time it takes to design, build, and market a new software product.
• We cannot be sure to avoid using patented ideas, which are often very broad. Imagine if I patented "method of playing music in a room where drinks are served", or "using a pigment-filled stick to make marks on paper", or "method of applying heat to foodstuffs in order to modify or enhance their flavour". This is the level of many software patents.
• We cannot be sure to license patents, if we discover that we have infringed on them. A patent holder may agree to license, or may not. They may simply demand that we stop selling our product. Worse, many software patents duplicate each other. Licensing one patent provides no guarantee of protection from others.
• We might try to overturn an obviously weak software patent in court. We would have to find money to pay our lawyers, and we would risk everything - bankruptcy - if we lost. You might think there is insurance against this kind of thing? No, insurance companies do not cover patent disputes.
• We might seek our own patents. Apart from the cost of gaining and defending a patent, holding patents would make us a visible target for companies with broad "enabling patents". Small companies are easily intimidated into giving up their patents.
• We could wait until the relevant patents expire. This takes up to twenty years. That is the time I've been working in data processing. Yes, I could write software without using any ideas from the last 20 years. But I doubt whether it would be very competitive, or find many customers.

So why is data processing so different from any other industry? Surely if software patents are so bad, they would not be tolerated in other sectors? Well, some people argue that they are bad in other sectors too. Should the patent offices allow patents on such things as human genes? But there are big differences between data processing and a physical domain like chemistry, engineering, or pharmaceuticals.

When we write a software program we draw from a vast living culture of ideas, techniques, and methods. We combine these, refine them, invent new ones. It is much like writing music, or writing prose. Without access to this rich culture of ideas, we simply cannot write new software. Indeed, economic theorists believe that the ease with which people can exchange ideas is a key factor of the efficiency of an economy. The boom in software technology during the last two decades has been driven by ever-cheaper ways to exchange ideas (email, the Internet).

Secondly, compared to a physical process, software development is very much a step-by-step process. Software invention is the work of hundreds of minds working over decades to accumulate new and better ways of solving particular problems. There are no sudden breakthroughs, no secret laboratory discoveries, and no mad scientists. Software is part of a cultural river. Every idea we use took 30 or 40 years to develop and mature. You see why "owning" such ideas is such an abhorrent concept to those who actually contribute to this cultural river.

To write software costs almost nothing except time. A team of five can build a product with millions of pieces - as complex as an Airbus - in just a year. Across Europe, hundreds of teams like ours keep pushing the boundaries of the possible. We are independent, we have no political power, we do not make the headlines. But we are the ones that keep this industry - and the economy that depends on it - alive and healthy.

What does Big Software think about software patents? Well, it really likes them. Software patents have only advantages for large companies. And Big Software is acquiring patents as fast as it can. IBM alone has over 10,000 software patents.

What does Big Software do with its huge patent portfolios? Some companies like to collect royalties. Anyone making software inevitably infringes on a dossier full of IBM patents. If you also have a fat patent portfolio, you can trade. If you don't you can pay a royalty. IBM usually ask for 3% of revenue. Of course, this won't protect you from other claims. Other firms use their patent portfolios to blackmail smaller firms into "collaboration".

And what do small or medium-sized firms do when asked to "collaborate"? They do what any sensible person would do when a large, loaded gun is pointed at their head. Hand over the goods and pray to stay alive. So software patents do not protect the independent inventor. They are however a useful tool for established businesses to bully, extort, and bankrupt their smaller rivals.

You may ask, if the situation is so bad, why is there no crisis in the US? To some extent US companies are still accumulating patents, the US patent and trademark office (USPTO) acting as an arms dealer for a war that is not quite here yet. But the economic friction of software patents is starting to worry some. As Gary L. Reback wrote for Forbes:

"Within the past five or six years, economists in particular have started to question the USPTO's practices, finding little correlation, if any, between patent proliferation and invention. Economists have identified many situations in which patents actually retard the introduction of new products."

Who actually wants software patents in Europe? Who is pushing the EU Council to bend and break their own rules in order to pass a text that the EU Parliament has already explicitly rejected?

Big Software, obviously. Big Software faces aggressive competition from a new breed of software - so-called free software, or open source - which can't be beaten by the usual methods. Free software evolves faster, is more modern, and generally better and cheaper than the stuff Big Software sells. The convicted monopolist Microsoft, especially, has tried every possible tactic to stop products like Linux from becoming wide-spread. Software patents are one of the final weapons in a fight for control of the future of the industry.

Big Software is represented by groups like the BSA (Business Software Alliance) which claim to speak for small and medium-sized software firms, but are actually sponsored by firms such as Microsoft, IBM, Sun, Oracle, and Cisco.

Secondly, we have the European Patent Office. The EPO expects a huge increase in revenue, power, and influence if software patents become reality. The US model already shows what is possible: the USPTO is the only government agency to make a profit, and it does so with open joy, ignoring the long term costs of the patent boom it has allowed. The lucrative business of granting patents has corrupted the USPTO and EPO.

Lastly, we have the patent industry. I don't need to explain why European patent lawyers are practically dancing in the streets - if lawyers ever dance - at the thought of the 30,000 software patents that the EPO has illegally granted and now hopes to see activated, and the lawsuits these will provoke.

When we look honestly at which parties call for software patents in Europe, we see those who do not want a free and competitive market. We see the monopolists, the lawyers, and the functionaries. We the inventors hate software patents because they make us slaves. The produce of an invested lifetime no longer belongs to us. Somewhere, with the collusion of a corrupt bureaucracy, a patent lawyer buys the "rights" to an idea, and owns us as surely as if we were shackled in iron and sold.

The European Council has been in a struggle with the European Parliament over this issue since 2002. The Council has used questionable and undemocratic tactics to push through its US-inspired vision of "patent everything". We are today at a crisis point: the vote in July is the last chance the Parliament has to reject the proposal.

Who will pay if this proposal becomes law?

European businesses will pay. Consider a large tax on all software. Increasing prices, less innovation, fewer suppliers, worse service. Imagine the end of independent businesses providing software services. You want someone to fix your database? Please call the Business Software Alliance and pay for an "approved consultant". Think of the excellent service that monopolists offer. Think of the old state telecoms giants, their high prices and waiting lists. This is what will eventually happen to IT if software patents become law in Europe.

European consumers will pay. Everything will cost more as businesses find they have to pay more for their data processing infrastructure. Over the years, technology will stagnate so that we find ourselves stuck in the past compared to countries with no patents on software. Imagine no Internet. No email, no mobile phones, no e-anything. Imagine trying to work with 20 year-old ideas and technology. Imagine 1985.

Free and fair competition in the technology sector is one of the major engines for economic growth.

Software patents are truly anti-competitive devices. It is contemptible that Europe, which has made such strides in promoting free and fair competition, should be on the verge of handing its vigorous independent software industry into the cadaverous clutches of corporate oligarchs.

This issue affects us all.