The bottom line of software patent reform

Looking for real patent reform? Don't hold your breath.

Hopes for a cessation of software patent litigation may be chaff on the wind, if current business practices are any indication.

There has been a lot of hullabaloo about the validity of software patents, what with everybody seemingly suing everybody in the mobile sector these days.

It has also been noted that some of the companies who actually have instigated some of these lawsuits have, at one point or another, actually had public positions against software patents.

Microsoft, curiously, was one of those opponents. Just after software patents were found to be enforceable in the 1980s, CEO Bill Gates wrote a memo arguing that such patents would be the worse thing in the world for a company like Microsoft:

"If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today. I feel certain that some large company will patent some obvious thing related to interface, object orientation, algorithm, application extension or other crucial technique. If we assume this company has no need of any of our patents then they have a 17-year right to take as much of our profits as they want."

Of course, those were different times, when Microsoft was young and carefree and their own patent portfolio was meager. Contrast those ideas from Gates to those of Microsoft General Counsel Brad Smith in a 2007 CNET article:

"Protection for software patents and other intellectual property is essential to maintaining the incentives that encourage and underwrite technological breakthroughs. In every industry, patents provide the legal foundation for innovation. The ensuing legal disputes may be messy, but protection is no less necessary, even so."

In other words, software patents are bad, until you have enough of your own to start setting up your own lawsuits.

I could level off some of the usual scathing "Microsoft is evil" remarks that one would expect from an open source user and advocate, except it would be inappropriate because nearly every other company does business this way.

This morning while I was waiting for my daughter to get ready for school, I read an interesting blog entry on litigious business practices using what's known as occupational licensing. The main thrust of the article described how many state and municipal food inspection and licensing processes are being abused by competitors to keep new businesses from interfering. Street food vendors, for instance, are among those business groups that keep getting targeted by Draconian enforcement of existing (and sometimes brand spanking new) regulations.

It's not just the food industry. Many of the situations the article described were simply egregious:

"My home state of Ohio fined a parent $10,000 for competing with the Cleveland Bar Association. The CBA filed a complaint that the concerned parent represented his autistic son without a CBA-approved attorney when he sued his school board because of the poor quality of his son's education.

"In California you can't help people devastated by forest fires unless you're part of a politically connected contracting crew. The government went so far as to send out a press release during a massive fire warning unlicensed workers that doing things like removing debris is a serious felony subjecting them to $10,000 fines and 16 months in prison.

"Monks were threatened with crippling fines and jail for selling wood boxes. The funeral industry didn't like the competition."

So again, it's pretty hard to single out a company like Microsoft when all they are doing is playing the same stupid game nearly every other company is playing: abusing the legal system to get what they want.

And history is about to repeat itself. Google, which has the oft-cited motto "Don't be evil," has been very loud about their opposition against software patents. But after buying Motorola Mobility (and presumably getting their hands on some software patents), how long will it be until Google initiates their own big patent infringement lawsuits? Many will argue that it will be in defense, sure, but will there ever be a point when someone will just keep making a stand?

Critics of software patents argue that it would be great if all the extra legal overhead of this litigation could just go away. But if the bottom line says that it's cheaper to just hire better lawyers rather than suffer the potential risks of young upstart competitors stealing even more revenue and customers, then businesses will opt for the former every time.

This is why lawmakers only make half-hearted efforts to examine patent reform. They may listen to the latest big company that complains (like Google), but if and when that company moves on to pursuing their own litigation, why bother listening? Not to mention lobbying pressure from all the lawyers who are getting paid quite well to pursue these cases on behalf of their clients.

It's a depressing situation all the way around, in all business sectors, at all levels of government. Litigation is a business expense that many businesses are willing to put time, effort, and money into if it can give them an edge over a competitor.

Can software patents ever be reformed? Possibly, if enough lawsuits lose and companies realize that there's no percentage in the game.

It won't be an ethical decision that drives reform, sadly, but a financial one.

Read more of Brian Proffitt's Open for Discussion blog and follow the latest IT news at ITworld. Follow Brian on Twitter at @TheTechScribe. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.

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