A conference on software patents and free software

Pamela Samuelson is a professor of law at the University of California at Berkeley; she also serves on the boards of organizations like the Electronic Frontier Foundation, the Electronic Privacy Information Center, and Public Knowledge. At the conference, she presented some results on her research into the idea of software patents as an incentive for innovation. A survey was done back in 2008, with 15,000 surveys sent out to a large number of firms. 1,333 of them - representing over 700 companies - came back. The numbers that came out were interesting, if arguably unsurprising.

According to this survey, 65% of software companies have no interest in software patents; they do not see patents as an important part of doing business. That compares with 82% of non-software companies which said they were working toward the acquisition of patents. It is worth noting that companies with venture capital backing had a higher level of interest in software patents than those without.

When companies do go for software patents, their motivations tend to be to enhance their reputation and make it easier to secure investments. Preventing litigation was also cited as a reason. But, when it comes to the question of what makes a software business successful, patents were at the very bottom of the list. Being first to market was the most important success factor. In summary: software patents are a weak incentive - at best - toward innovation.

So, do software patents matter for new companies? Lawyer Jason Haislmaier said that they can be important, especially with venture-backed companies, because they are relatively attractive to investors. Venture capitalist Jason Mendelson disagreed, though, saying that he didn't care about patents in the companies that he evaluates. In fact, if a company is focused on getting patents, he sees it as a reason not to invest: the company should be putting resources into its products instead.

Stormy Peters, director of the GNOME Foundation, noted that community developers tend to be strongly anti-patent; a company with a patent-heavy focus may find it hard to work with the community or hire developers. Stormy also worries that the current trend toward cloud computing may make the issue of open source software moot. The convenience of free web services has, she says, distracted the community from the issue of freedom. There needs to be a means by which truly free and open services can be defined.

Patent litigation was the subject of a different panel. Lucky Vidmar started with the observation that patent suits against open source software still tend to be rare, and that suits against individual developers are not really happening. In general, he says, the lawsuits which have come about have little to do with open source; they are just more in a long series of software patent suits. But suits against open-source companies do tend to get a lot of negative attention, something which potential plaintiffs may well keep in mind.

Julie DeCecco, a litigator for Oracle (by way of Sun), noted that patent litigation is very expensive. That alone makes it unlikely that open source projects will be sued; the exposure to legal action is proportional to the amount of money being made. "Follow the money," she says, and you'll see where the lawsuits are happening. Attorney David St. John-Larkin suggested that open source might be more vulnerable to these suits due to the public nature of its development.

Jason Schultz and Jennifer Urban are both from the Samuelson Law, Technology and Public Policy Clinic at Berkeley; Schultz previously did a stint at the EFF. They presented a concept they have been working on as a way of mitigating the software patent threat called the Defensive Patent License, or DPL. This work is in an early stage, and the DPL text is not yet available, but it should be forthcoming in the near future.

The core idea behind the DPL is that software patents can serve in a useful, defensive role. They can be used to negotiate cross-licensing agreements, and they can be used for countersuits if need be. But defensive patents are not as heavily used as they could be, especially in the open source area. There are a couple of possible reasons for this: defensive patents require a concentration of resources that doesn't always exist in our community, and there tends to be a certain amount of distrust toward the acquisition of patents for defensive purposes.

[PULL QUOTE: The DPL would promote the defensive use of software patents in a way which reinforces the free software community's norms; it is meant to be similar in spirit to the GPL. END QUOTE] The DPL would promote the defensive use of software patents in a way which reinforces the free software community's norms; it is meant to be similar in spirit to the GPL. A company which buys into the DPL will put all of its patents under that license. Any other DPL licensee could then automatically obtain a royalty-free license for any of those patents. The license is irrevocable - unless the licensee sues another DPL licensee or withdraws from the pact. Withdrawal is possible with advance notice (six months was suggested), but any licenses granted to others would remain valid.

If this idea takes off, it will encourage the creation of a growing network of cross-licensed patents; eventually, the value of joining the pool will be far higher than remaining outside of it. Since patents in this scheme cannot be used to attack other participants, they will be limited to defensive uses only. Among other things, that should keep DPL-covered patents out of the hands of patent trolls.

There are a lot of details to be worked out yet, and it is far from clear that the idea will really take off. It is hard to imagine that large companies with extensive patent portfolios would be willing to commit the entire set to the DPL. The concept is interesting, though; we will see where it goes.

The discussion danced around a number of issues, including patent shakedowns that are settled without the filing of lawsuits, current litigation, or the general problem of low-quality patents. With regard to the last two, your editor asked about Apple's attack against HTC, which is using some highly dubious patents as a weapon against Linux. Nobody wanted to talk about the Apple case, but Julie DeCecco said that the best weapon against low-quality patents is reexamination actions in the patent office. They are relatively cheap (at a mere $20K or so) and are often at least partially successful.

Jason Schultz said that he participated in a number of these actions while at the EFF. They can be effective, but there are a lot of bad patents out there, and there's no way to challenge them all.

Your editor would note that, when talking with people more directly involved in the defense of free software, he has found the reexamination option to be held in relatively low repute. The actions are risky and might serve to make the patent stronger; this has happened with the VFAT patent. And, in the best of scenarios, it is still not possible to truly kill a patent this way; they can always come back after further rewriting by the patent holder.

There was a panel on the intersection of open source, patents, and standards; much of it was about as exciting as sitting on one of the standards committees themselves. The audience did hear an interesting presentation from Steve Mutkoski of Microsoft, who asserted that patent-encumbered standards are entirely compatible with most open source licenses. In fact, "only the GPL family of licenses" is truly problematic in this regard. It is, he suggested, more of a problem with the GPL than with patents.

Also, Steve made the claim that a lot of people who complain about patent-encumbered standards really just don't want to pay royalties. That may well be true, but it's not relevant to the larger discussion. Unfortunately, there did not seem to be anybody on the panel who understood free software well enough to try to correct that point of view.

There was an interesting suggestion that, perhaps, we need some concept of "fair use for patents." That is especially true in situations where the government has mandated the use of a patent-encumbered standard in some situation. Nobody tried to fill in the idea of how fair use might work in this setting, though.

In summary, your editor found the event to be somewhat frustrating. It was dominated by lawyers of the academic variety with a small venture capital presence; Stormy Peters was the only community representative on the panels. Even so, it is interesting to see how the problem is viewed by people who are a few steps removed from it.