Free Software friendly patent pools [LWN.net]

Free Software friendly patent pools

Posted Aug 27, 2010 18:59 UTC (Fri) by FlorianMueller (guest, #32048)
In reply to: Free Software friendly patent pools by mjw
Parent article: A very grumpy editor's thoughts on Oracle

Thanks for finally pointing out your affiliation with Red Hat. Nevertheless my answer was the right one.

The formation of Free Software friendly patent pools. [...] Those who fund them create a free market around the software assets that matter to them.

So far there isn't even one credible example of those pools having helped a company against which patents were asserted. The OIN's proponents suggest that the OIN helped TomTom. The press release on TomTom's settlement with Microsoft, however, made it clear that TomTom ended up paying royalties to Microsoft plus made a commitment to modify its code to work around certain patents. So it's pretty clear that TomTom lost. Everyone else whom Microsoft has taken to court has also ended up that way (an announcement according to which those companies pay), most recently Salesforce.

So your proposed solution is a failure. Such a failure that companies like Amazon and HTC just paid right away instead of even trying to do anything together with the OIN, and that Oracle can sue Google although both are OIN licensees and in formal (but currently pretty useless) terms have a cross-license in place with each other via the OIN.

I also don't see that your proposal works against Apple trying to force HTC to drop multitouch, or against IBM's anticompetitive intimidation of TurboHercules.

Unfortunately, patent royalties are inevitable as long as there are patents, and are the fundamentally lesser problem than exclusionary use. If you want to make free software ideology the law, convince lawmakers that it's a good model. Lawmakers just have to look at how little acceptance the GPLv3 has to see that it's not what the industry at large wants as a business model. Red Hat does well, but it didn't create Linux. That's a business model that doesn't work for true innovators. You can't build an entire economy the Red Hat way because then everybody would just be waiting for someone else to innovate to jump on the bandwagon.

In my view, software patents are not needed to enable software innovation. However, the industry largely wants them, and those in the industry who are against them don't make any serious effort to abolish them, which suggests that the problem isn't a pressing one. Consequently, lawmakers don't abolish software patents, and "infringers" (as much as I hate the term in connection with patents) should be glad if they get a good license deal rather than being shut out of a market or being forced to cripple a product the way Apple tries to impose it on HTC...

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The lack of funding for the anti-software-patent cause

Posted Aug 28, 2010 6:10 UTC (Sat) by FlorianMueller (guest, #32048) [Link]

Are you suggesting that all those small and medium-sized companies who stepped up and stated their opposition to software patents aren't sufficiently representative of the industry? The economic majority?

As much as I regret it because I'm against software patents and would prefer to see a lot of support for our cause, I have to answer your question with a clear Yes.

The "Economic Majority" website you linked to is actually a striking example. Let me quote from its current content: So far, 1,948 companies, with a minimum of 31,503 employees and annual turnover of 3,258,244,082 EUR [...]

So that's between EUR 3.2 billion and EUR 3.3 billion. Come on: IBM has revenues of close to $100 billion, so even if you just looked at IBM's European subsidiaries and then convert to EUR, it would dwarf that number; then Microsoft is around $60 billion, and so on.

Even if limiting it only to European companies, SAP alone has revenues north of EUR 10 billion.

But the website claims to represent an economic majority...

This is just one example to demonstrate the lack of support for the cause. There's actually something even more important to look at: do companies put their money where their mouth is?

If software patents were such a pressing problem for small and medium-sized companies, they would want to spend some money to address the problem politically and get rid of those patents. But there's never been any substantial funding. My NoSoftwarePatents campaign was more successful at fundraising than the entire FFII, which at the time had an annual budget in the EUR 100K range (just as a ballpark figure). That lack of resources is then visible because it means that they can't make a consistent effort with quality people. Politicians don't ask for a lobby entity's budget, but if they see that a cause is supported by people who for the largest part don't have any significant professional track record related to the issue, it reflects negatively on the cause.

More importantly even than professional expertise, the thing is that in those patent policy discussions large companies write letters to politicians about how many jobs are at stake and depend on strong intellectual property rights. Politicians aren't programmers (except maybe 1 in 1,000), so they look at it from an economic policy point of view, and ultimately they'll trust -- in most cases -- those who represent substantial economic weight.

I had a long debate with the FFII's founder and its current president on Facebook a few months ago about the state of the movement and particularly the question of economic weight and the related political clout. In that discussion, I also told them to be realistic about those numbers. They may be very proud of the support they got, but it doesn't impress politicians at all.

I told them that they never even raised EUR 200,000 in one year to the best of my knowledge. Then they argued that small and medium-sized companies just aren't political. I said that if there's a pressing problem, they will get political. I gave them an example that in my opinion shows how ridiculously little support there is for the anti-software-patent cause: there used to be a lobby group for leading European soccer clubs, called G14 (initially 14, later 18 members). I cooperated with that one because I advised and represented their biggest member (Real Madrid) at the time. The G14 had an annual budget at the time of about 2 million euros. Each of its member clubs had revenues between EUR 50 million and EUR 350 million at the time; there are lots of medium-sized IT companies in that revenue range. Lots. So 18 clubs of that size decided to spend ten to twenty times as much on a Brussels (EU capital) lobbying entity as the entirety of European IT small and medium-sized businesses on the fight against software patents. This shows that the G14 addressed a pressing problem; the FFII and my former campaign apparently didn't.

The lack of funding for the anti-software-patent cause

Posted Sep 6, 2010 15:24 UTC (Mon) by pboddie (subscriber, #50784) [Link]

This is just one example to demonstrate the lack of support for the cause. There's actually something even more important to look at: do companies put their money where their mouth is?

I'm not sure that this is a "lack of support for the cause". That's a bunch of companies who stuck their necks out and said that they think software patents are a bad thing. Sure, it's very likely that a large number of companies either won't stick their necks out because it would make them look bad in front of their patrons at Microsoft and SAP - you don't want to "jeopardise" that business relationship, do you? - or because they "only sell solutions" (that is, products and customisations).

If software patents were such a pressing problem for small and medium-sized companies, they would want to spend some money to address the problem politically and get rid of those patents.

Maybe the bulk of the revenue sits in companies that aren't affected directly - those people who sell "solutions" - who in the case of patent litigation will just say that they had no idea about such matters and hope that the aggressor will let them off, perhaps even offering them a nice line of business involving the aggressor's products. In fact, looking at various lists of the biggest IT companies in, say, Norway (noting that numbers 2 and 3 in that list have now merged), there are a lot of companies at the top that are probably weighted towards a net consumption of technologies rather than a net production of technologies. It's important to look at local markets than the global picture because otherwise we'd all be doing the bidding of Exxon, Royal Dutch Shell and BP because "they create most value".

More importantly even than professional expertise, the thing is that in those patent policy discussions large companies write letters to politicians about how many jobs are at stake and depend on strong intellectual property rights. Politicians aren't programmers (except maybe 1 in 1,000), so they look at it from an economic policy point of view, and ultimately they'll trust -- in most cases -- those who represent substantial economic weight.

Yes, sickening isn't it? Some guy who heads up a company employing lots of people (politician hears "reducing the welfare burden" in his/her head) who help that company to make money (politician hears "producing taxable income") can effectively have a thousand-person vote just because of his/her job title, whereas a bunch of individuals (perhaps working for the very same company) writing letters are brushed off as the uninformed and unwashed masses. It's worth reminding those with political aspirations that it is as much their job to avoid being held to ransom by organisations who demand greater influence whilst issuing a veiled threat of "jobs being lost" as it is to encourage an environment where jobs can be maintained or created.

Then they argued that small and medium-sized companies just aren't political. I said that if there's a pressing problem, they will get political.

Well, I've already given some reasons why companies might not be political. You can also add the situation where a company that is not merely providing "solutions" would choose to sit out any political activity, for such reasons as avoiding confrontation with politically motivated opponents, sitting on the fence because of the attitudes of investors (those people who insist, contrary to the evidence, that patents make companies more valuable), or just having too much else to do building a small company offering their own products and services.

I gave them an example that in my opinion shows how ridiculously little support there is for the anti-software-patent cause: there used to be a lobby group for leading European soccer clubs, called G14 (initially 14, later 18 members).

That's apparently little financially motivated support.

I cooperated with that one because I advised and represented their biggest member (Real Madrid) at the time. The G14 had an annual budget at the time of about 2 million euros. Each of its member clubs had revenues between EUR 50 million and EUR 350 million at the time; there are lots of medium-sized IT companies in that revenue range. Lots. So 18 clubs of that size decided to spend ten to twenty times as much on a Brussels (EU capital) lobbying entity as the entirety of European IT small and medium-sized businesses on the fight against software patents. This shows that the G14 addressed a pressing problem; the FFII and my former campaign apparently didn't.

No, it merely shows that a group of organisations could be persuaded to spend money in order to further their own agenda, whereas many IT companies cannot be persuaded that doing the same thing would be in their best interests. That's not to say that the problem isn't acute for some parties and could spread to others; it means that everyone else just doesn't see it and doesn't care until it's their problem (at which point everybody else may well be indifferent to the problem).

Saying that a lack of money floating around lobbying venues points to the absence of a problem is like saying that humanity doesn't have energy/water/food/resource problems because no-one is spending big money either highlighting or remedying those problems. If plenty of people are doing just fine making money from the current situation, why would they want to bring any attention to a future situation where they don't make that kind of money? Indeed, they'll gladly outspend anyone trying to do just that.

I agree that terms like "economic majority" are risky because people just add up the revenue column and compare the numbers to the behemoths of global business, which should never be a form of policy guidance for anyone in public office. Really, the damaging effects of software patents are possibly more similar to the eradication of crucial species in ecosystems which seem unimportant ("I can't see what it does - no-one will miss it!") until the rest of the ecosystem collapses. Perhaps the "economic majority" is founded upon the freedom to innovate without the threat of patents, but we won't know the extent of the value created by having that freedom until someone manages to eradicate it.

But it doesn't surprise me that people can't be persuaded to buy into such causes. If they did, we'd already have effective and functional governments and societies that dare to confront the big issues rather than burying them under a mountain of trivia and self-interest.