taler-merchant-demos

patent-practice-panel.html (12136B)

---

 <!--#include virtual="/server/header.html" -->
 <!-- Parent-Version: 1.96 -->
 <!-- This page is derived from /server/standards/boilerplate.html -->
 <!--#set var="TAGS" value="thirdparty" -->
 <!--#set var="DISABLE_TOP_ADDENDUM" value="yes" -->
 <title>Daniel Ravicher's FFII panel presentation
 - GNU Project - Free Software Foundation</title>
 <!--#include virtual="/philosophy/po/patent-practice-panel.translist" -->
 <!--#include virtual="/server/banner.html" -->
 <!--#include virtual="/philosophy/ph-breadcrumb.html" -->
 <!--GNUN: OUT-OF-DATE NOTICE-->
 <!--#include virtual="/server/top-addendum.html" -->
 <div class="article reduced-width">
 <h2>New Developments in Patent Practice: Assessing the Risks and Cost
 of Portfolio Licensing and Hold-ups</h2>
 
 <address class="byline">by Daniel B. Ravicher</address>
 
 <div class="infobox">
 <p>This is a transcript of a panel presentation given by Daniel B.
 Ravicher as the executive director of the Public Patent Foundation on
 Wednesday, November 10, 2004, at a conference organized by the
 Foundation for a Free Information Infrastructure (FFII) in Brussels,
 Belgium. The transcription was done by Aendrew Rininsland.</p>
 
 <p>The GNU Project agrees with the premise that <a
 href="/philosophy/limit-patent-effect.html">patents on computational 
 ideas are bad</a>, but it disagrees with the assumption that nonfree 
 programs are morally legitimate competitors.</p>
 </div>
 <hr class="thin" />
 
 <p>Thanks. I think, for me, the whole two days of conferences boils to
 really one question, and the whole debate boils down to one question:
 &ldquo;How do we want success in the software industry to be
 determined?&rdquo;
 </p>
 
 <p>
 Or, another way, who do we want to determine those who succeed and
 those who fail in the software industry? Because there are various
 people who can make this decision. We can have bureaucrats make the
 decision about who wins and who fails, or we can let consumers make
 the decision about who wins and who fails. If we want software to
 succeed because we want it to succeed on its merits and be the best
 software that the public can have, it's more likely we want a system
 that lets consumers and end-users make the decision about which
 software is selected&mdash;not bureaucrats.
 </p>
 
 <p> Now, what does that have to do with patents? The larger you make a
 patent system, the more you allow the patent system to impact
 software, and the more you're allowing success in the software
 industry to be determined by patent-based bureaucrats, those who can
 take advantage of the bureaucracy which grants and resolves disputes
 regarding patent rights. It's a bureaucratic competition, not one
 based on the decision of consumers. That means it's less likely for
 the merits to be determinative of what software succeeds.
 </p>
 
 <p>
 We have to recognize that even without software patents, large
 developers have intrinsic advantages over small developers. Large
 developers have the resources, large developers have the
 relationships, large developers have the distribution channels, large
 developers have the brand. So even without software patents, large
 developers are still at an advantage&mdash;they start out at an
 advantage. Well, then, the next question to me is, &ldquo;If we have
 software patents, does that increase the advantage of large developers
 or decrease it?&rdquo; because the patent system could benefit small
 developers and therefore that could erode some of the naturally
 existing benefits that large corporations have.
 </p>
 
 <p>
 I think that point's been belaboured already. We know that small
 developers are not benefited by a patent system, in fact, they are
 prejudiced by a patent system. So, enlarging a patent system to apply
 to software development only enlarges the disadvantage small
 developers have in competition. Again, it comes back: Who do we want
 to make the decision about which software developers succeed, do we
 want consumers, based on merits and functionality and price, or
 bureaucrats, based on whom patents are granted to and who wins patent
 infringement cases?
 </p>
 
 <p>
 The other thing we need to recognize is whether or not the patent
 system has a preference for users of certain types of software. A
 patent system as we have in the United States benefits those under a
 software distribution scheme which allows them to charge
 royalties. This is because all software has to deal with the risk of
 infringing on patents. Patents don't discriminate between open-source
 or freely licensed software and proprietary software: a patent covers
 certain technology, it doesn't matter how the software's distributed.
 But proprietary software is licensed with a fee so the cost of that
 risk can be passed on to the consumer without them recognizing
 it. They don't see it, it's baked into the price of the software
 they're buying and if you were to ask a consumer if they've bought
 insurance against being sued for patent infringement, they would say
 they don't believe that have. 
 <span class="gnun-split"></span>But in fact they had, because if someone
 sues a user of Microsoft software, Microsoft has built in the cost of
 stepping in to defend them from that into the cost of the license
 fee. On the other side, if you have royalty-free distributed software
 such as open-source or free software, you can't bake in the cost of
 that risk so it becomes more transparent. And this makes consumers or
 users think that open-source is in a worse position than proprietary
 software when it's actually not. It's just because the open-source
 distribution scheme does not allow someone to sneak in the cost of
 that risk to make it opaque instead of transparent. So the patent
 system not only prefers large developers over small developers, it
 also prefers users of proprietary software over open-source software.
 </p>
 
 <p>
 If we come back to the initial question, which I think this is all
 about, how do we want success in the software market to be determined?
 Do we want it to be determined by these types of factors, or do we
 want it to be determined by who can get the best software at the best
 price?
 </p>
 
 <p>
 Now, I think it's important to concede the point that people on the
 other side will make, which is, will a less-onerous patent system, or
 they would call it a &ldquo;less-beneficial&rdquo; patent system, I
 call it less-onerous, will harm their business, because people could
 copy them. Well, large businesses aren't worried about being
 copied. They really aren't. At least not by other large businesses,
 this is why they enter into cross-licenses all the time. 
 <span class="gnun-split"></span>If a large
 company really didn't want its software to be copied, why is it
 licensing its patent portfolio to every other big company in the
 world? Because it can't stop them from copying it once they enter into
 that agreement, so this argument that, &ldquo;Well, we're worried
 about people copying our software,&rdquo; the most likely people to
 copy your software are other large businesses because they have the
 resources and the ability and the distribution channels and the brand
 and the relationships. Why are you letting them copy it? You must not
 be that worried about it.
 </p>
 
 <p>
 And so the question is, then, does a patent system have a
 net-beneficial effect or a net-detrimental effect on software
 development? I think we've seen already it only decreases the ability
 for open-source or royalty-free license software to compete with
 proprietary software. In the end you have to ask, is less competition
 beneficial for the software industry? I don't know what Europeans
 think about that, I think Europeans are very pro-competition and I
 know us on the other side of the Atlantic are very pro-competition as
 well, and so the answer is never less competition is better for
 consumers. And so I think as we bring the point home, if we had two
 seconds in an elevator to pitch this idea to someone, software patents
 have a net-negative effect on competition in the software
 industry. 
 <span class="gnun-split"></span>True, they may increase competition in some ways, but the
 net-effect is anti-competitive. And that's what putting the ability to
 decide success in the software industry in the hands of the patent
 office or in hands of the courts does. If you need examples, if people
 think that's just rhetoric or your opinion, just point to the United
 States. Microsoft is a very successful software company, I don't think
 anyone would debate that. They've never had to sue anyone for patent
 infringement. So they claim they need patents, but yet they've never
 had to use them. They cross-license them and that's where we wonder,
 &ldquo;If you're worried about people copying, then why are you
 cross-licensing them to people?&rdquo;
 </p>
 
 <p>
 You know, the last point is, who else does a patent system benefit? If
 it benefits large developers over small developers, is there anyone
 else? A patent system benefits non-developers. Do we really want a
 bureaucratic system that helps people who aren't adding anything to
 society? What I mean by non-developers are trolls&mdash;which
 everyone here is familiar with&mdash;people who get a patent either
 by applying for it or acquiring it in some asset purchase and then use
 it to tax other developers, other distributors of a product.
 </p>
 
 <p>
 Do we really want a system which encourages people to not add products
 or services to the market place but only detracts from the profits and
 capabilities of those that do?
 </p>
 </div>
 
 </div><!-- for id="content", starts in the include above -->
 <!--#include virtual="/server/footer.html" -->
 <div id="footer" role="contentinfo">
 <div class="unprintable">
 
 <p>Please send general FSF &amp; GNU inquiries to
 <a href="mailto:gnu@gnu.org">&lt;gnu@gnu.org&gt;</a>.
 There are also <a href="/contact/">other ways to contact</a>
 the FSF.  Broken links and other corrections or suggestions can be sent
 to <a href="mailto:webmasters@gnu.org">&lt;webmasters@gnu.org&gt;</a>.</p>
 
 <p><!-- TRANSLATORS: Ignore the original text in this paragraph,
         replace it with the translation of these two:
 
         We work hard and do our best to provide accurate, good quality
         translations.  However, we are not exempt from imperfection.
         Please send your comments and general suggestions in this regard
         to <a href="mailto:web-translators@gnu.org">
         &lt;web-translators@gnu.org&gt;</a>.</p>
 
         <p>For information on coordinating and contributing translations of
         our web pages, see <a
         href="/server/standards/README.translations.html">Translations
         README</a>. -->
 Please see the <a
 href="/server/standards/README.translations.html">Translations
 README</a> for information on coordinating and contributing translations
 of this article.</p>
 </div>
 
 <!-- Regarding copyright, in general, standalone pages (as opposed to
      files generated as part of manuals) on the GNU web server should
      be under CC BY-ND 4.0.  Please do NOT change or remove this
      without talking with the webmasters or licensing team first.
      Please make sure the copyright date is consistent with the
      document.  For web pages, it is ok to list just the latest year the
      document was modified, or published.
      
      If you wish to list earlier years, that is ok too.
      Either "2001, 2002, 2003" or "2001-2003" are ok for specifying
      years, as long as each year in the range is in fact a copyrightable
      year, i.e., a year in which the document was published (including
      being publicly visible on the web or in a revision control system).
      
      There is more detail about copyright years in the GNU Maintainers
      Information document, www.gnu.org/prep/maintain. -->
 
 <p>Copyright &copy; 2006 Daniel B. Ravicher</p>
 
 <p>Verbatim copying and distribution of this entire article is
 permitted in any medium, provided this notice is preserved.</p>
 
 <!--#include virtual="/server/bottom-notes.html" -->
 
 <p class="unprintable">Updated:
 <!-- timestamp start -->
 $Date: 2022/05/31 08:46:03 $
 <!-- timestamp end -->
 </p>
 </div>
 </div><!-- for class="inner", starts in the banner include -->
 </body>
 </html>