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Start-ups in the maze of software patents

March 28th, 2011 Posted by Chris View Comments

Have you ever thought about patenting a pop up note,  an online poll, a leaderboard in an online game, or a system where you open apps by clicking icons? I have some bad news for you – it’s impossible. Not because the claim is stupid, it’s just that all of those things are already patented (take a look here, here, here, or here).

And it’s all fun and factoids, until one day you find yourself in the role of a software start-up, looking down the long black tunnel of software patenting, leading from Happy Town to Reality Check Station in Breakdown City.

Start-up woes

Debates about the software patenting system come and go, sometimes ramping up in a brief controversy, when two giants battle it out in public, throwing patents in each other’s faces. Films are being made (you really have to check this one out), articles are being written, and the internet public learned to treat the software patent debate like something constant, similar to the internet browser race, or regular hardware releases. Seemingly, nothing changes.

Unfortunately, patents have one property no one seems to take notice of: they multiply. In fact, they do so with fervor that could shame lemmings, as you can see from this handy chart.

If you develop an application and want it to be fully legal, I have to disappoint you. You have no chance to come up with anything, that won’t be in breach of at least one patent, as they now exclude you from use of most basic techniques. Most likely, you’ve already broken a dozen patents just by thinking about your app. Every Tuesday, the US Patent Office publishes some 3,000 new patents, many overbroad, generic, or just plain ridiculous. Piles of them created a legal maze, impossible to navigate even for companies employing armies of cloned, genetically engineered super-lawyers. Just take a look at the paper-storm blowing in the face of Google’s Android.

The life of a start-up software developer is no longer a blind run through the minefield, because in a blind run, you at least have a chance.

Patenting the obvious

The problem is, most of the awarded software patents are trivial. For example, Amazon somehow managed to snatch a patent for online shopping checkout, that practically every online store in the world is in breach of.  A small company owns a patent for creating a single file from multiple source files – both WinZIP and WinRAR actively breach this one.  There is even a patent for automatic e-mail answers, its holder sued AOL, Amazon and Yahoo and many others.

The big players in the software market bypass most of this by cross-licensing their patents. That’s the only way they can operate – for example Microsoft had to “borrow” patents for many parts of Windows UI or code. But cross-patenting creates even more problems, as companies are very creative about various strings they attach to their patent packages. Microsoft’s patent agreements legally prevent other companies from using any form of Linux kernel unless they pay Microsoft for what it didn’t develop, and what is effectively an open source software.

Let me give you a stark example, that something is wrong with the current patent system: Microsoft is a patent giant of IT world, and holds 17258 valid patents, even though it didn’t develop a single important software innovation over the course of all its history  – just check this very interesting list.

It wasn’t always like that. Many years ago, in the pioneer days of IT, you couldn’t patent an algorithm. Since then, companies discovered they can push the patents through if they simply substitute the word “algorithm” with “system and method”. Or if they patent a computer running an algorithm – a sneaky way to repackage a trivial piece of code as a physical invention. They have also learned to file for patents in places, where federal judge is well known to push through just about any claim. Step by step, the boundaries for “broken” patents are eroding.

There can be only one

Probably the best analogy for runaway software patents is the music creation.  A computer program and a musical composition share many similarities. They are all reflections of various elemental, mathematical laws, they are all created from building blocks, that can be put into certain patterns and combinations. If we can patent a pop-up note, or an inbox-checking algorithm, why wouldn’t we patent crescendos, tremolos, or certain note combinations? If we can patent a “system and method” for building a leaderboard, why wouldn’t we patent a “system and method” for creating a rock piece?

Just imagine a world, where Elvis couldn’t play due to Rock and Roll patent held by a guy called, Jackie Brenston.  Where Eric Clapton was sued into nonexistence by Lonnie Mack Heritage Foundation. And where Iron Maiden didn’t exist, because Black Sabbath wouldn’t agree to cross-patent heavy metal.

In the world of software patents, there can be only one. But often the most successful iteration of the idea is not the one that came first. I’ve already written about it in this post, but there were tons of failed social networks before Facebook. The problem is, in a couple of years debuting Zuckerberg style might no longer be an option, thanks to continued overgrow of patents.

A run through the minefield

But let’s get back to being a technology start-up. It’s clear that whatever you do, you will breach someone’s intellectual property. So ideally, before you even start to work, you should file some over-broad patents, to have the patent ammo for all the paper-flinging wars you will have to endure along the way. Even then, be prepared to fight waves after waves of patent trolls. You can’t cross-patent with them, or patent-threat them, as they never create their own software. You can’t reach a reasonable settlement, as they ask for millions of dollars in compensation. And some of them are really vicious, like certain Texas based company, that recently revealed an old patent for geo-tagging and sued 397 different companies, including Google and Microsoft.

Even if you grow large enough to handle patent trolls, a bigger fish in the pond might want to have a go at you – just like Unisys did to several companies using TIFF an GIF formats, because they incorporated the compression method patented by Unisys. Or just like Yahoo did to Xfire for sending people messages, when their friend joins an online game, even though most MMO games do exactly the same thing, without paying a dime to Yahoo.

So how exactly various start-ups deal with the situation? They don’t. Because the only way they can carry on, is by ignoring the existing patent law. Shockingly, that’s also what industry experts seem to endorse. I’m trying to think of another business, where breaking the law is a necessary part of the business model. And apart from the long list of shady activities that can get you jailed, nothing comes to mind. Except for writing software.

Of course, you’re much better off if you simply develop your software abroad, in a more liberal environment. But this will only delay your problems until you get global. Because – let’s face it – the US user base is of key importance to most start-ups.

The moral of the story is: after years of handing overbroad and obvious patents, whatever you may think of is already patented. And whatever you do is certainly illegal. And the only thing you can hope for is that no one will notice (or care about) your little start-up application.  Or that patent trolls will somehow die from their own weapon – Haliburton made the first step trying to patent the patent trolling.

I guess you could help the good fight by patenting the idea of patenting the obvious. Be quick about it, though. My submission is already well on its way to Texas.

Posted in Internet Trends, Privacy, Technology, Uncategorized |

  1. MQSA

    I can’t read your piece through all the extraneous commas!

  2. Arf_arf

    Thanks for the file:/// link to your hard drive, but would you mind opening your ports 135-139 and 445 so I can see it? ;-)

  3. SH

    Any form of linux kernel: file:///C:/Users/kpiskorski/Documents/Notka%20o%20patentach/Pwn2Own%20finished:%20Mac%20hasked%20in%205%20seconds

    What is this?!

    Article really interesting.

  4. Guest

    I’m going to patent grey text on a grey background to stop lousy web design like this.

  5. Someone from Patent Office please read this…http://chakpak.blogspot.com/2010/05/streamlining-patents.html

  6. guest

    Your grammar is atrocious

  7. Anonymous

    Great Article, learned some info on patents I didn’t know, MS**t gets paid for you to use open source, that’s why I only use there crap only when I have to.

  8. Life

    A patent gives you the right to exclude others from practicing your patent. If I do somehting that is patented, I’m not breaking the law until you tell me to stop and I keep going.

  9. Dude

    damn you Haliburton, i wanted to patent the patent trolling!

  10. Passing through

    First, this situation is not novel to software — it happens in all industries. Get used to the fact that someone came before you, got a patent on some technology, and now you have to deal with it. Been going on for centuries … again, deal with it.

    Second, what you think has been patented and what has been patented is two very different things. Trust me, you have no idea what you are looking at when you look at a patent.

    For example, Amazon does NOT have a patent on “online shopping checkout.” Amazon has a patent that requires someone to perform a great many opertions in a very particular way in order to infringe the patent. The reason why a great many online stores exist is because it is easy to design around Amazon’s patent. Similarly, it is easy to design around just about every other patent you’ve mentioned.

    That being said, all of these patents that are causing you great heartache will expire in the not-too-distant future.

    Some advice for software startups –> create value and don’t overly worry yourself about the existing intellectual property. It costs a lot of money to sue somebody, so unless your company is worth a lot, you are very likely not to be targeted. Once your company is worth something, you can then afford to hire a patent attorney, who should be able to explain to you one of the many ways you can get around infringing a particular patent. Again, the great odds are that you’ll never be sued on any of the dozens, hundreds, if not thousands of patents you may be infringing.

    Too many people get worked up over minor issues. Odds are you’ll get audited by the IRS before you get sued over patent infringment.

    Again, let me repeat myself, if you are a software startup — worry about creating a good product.

  11. Noted. We’ll think about changing that, I promise ;)

  12. Hey, thanks for letting us know! Link fixed now.

  13. Grammar Guy

    I will patent, a way to remove, extraneous commas, from, text. :) Just quibbling, I agree with your point though!

  14. Nothing interesting in there, it’s only a super-secret document exposing our work for New World Order. Anyway – link fixed ;)

  15. Paul

    “The problem is, most of the awarded software patents are trivial.”

    Well there isn’t really any difference quality-wise between software patents and patents in other fields. The fundamental (and general) problem is that patent eligibility for inventions in some class of subject matter is (or should be!) contraindicated /unless/ we have good reason to believe that, overall, the positive effects significantly outweigh the negative.

  16. Surak

    It’s not that bad. Actually, I like this way of, say, using commas as breathing signs; Something they actually are. The guy is writing fine, stop complaining.

  17. Grammar Guy

    http://grammar.ccc.commnet.edu/grammar/commas.htm
    ” Remember, too, that a pause in reading is not always a reliable reason to use a comma. “

  18. Three points.

    1 – Amazon’s “one click” patent is really more of a patent on having a bar tab: they store your address and payment info, and then you can order items quickly. Yes, other websites can avoid the patent by making you re-enter/confirm your information for each order, but it’s a ridiculous patent and never should have been granted in the first place.

    2 – Software patents seem to be particularly egregious in their claims breadth and the patent office’s willingness to rubber-stamp them. Further, patents in general are of questionable public value, as they are written to be broad and useful to lawyers, not specific and useful to science or engineering, as would be necessary to fulfill their role for recording and spreading innovation. The rubber-stamping patent office is a huge problem, tying up innovation in frivolous lawsuits instead of encouraging new innovation.

    3 – I would not begin a startup if it was virtually guaranteed that the moment I was successful a patent troll or large company is going to poison me with legal fees and cause my profits to evaporate: either in lawyer’s fees or fines/licensing costs. In other words, if the startup fails, I lose, if the startup succeeds, I lose. So why bother?

    The only successful business model is becoming the patent troll: patent uses of upcoming technologies, wait for other people to figure out how to build it, and then sue them and take their profits for doing all the hard work.

  19. Passing through

    “the patent office’s willingness to rubber-stamp them.” You’ve never filed a patent application with the Patent Office. If you had, you would have realized what an uniformed, ridiculous statement you just made.

    “it’s a ridiculous patent and never should have been granted in the first place” A lot of people spent a lot of time/money on trying to invalidate it, but they have yet to be successful in invalidating Amazon’s so-called ‘1-click’ patent. Everything is obvious in hindsight — too many people forget that.

    “they are written to be broad and useful to lawyers, not specific and useful to science or engineering, as would be necessary to fulfill their role for recording and spreading innovation.” Software patents don’t need to be detailed (e.g., have source/pseudo code). I could easily describe, for example, a drop down box and a coder would easily have been able to figure out how to make it work. In most instances, it is the architecture that is important … not nitty gritty details of the code.

    “virtually guaranteed that the moment I was successful a patent troll or large company is going to poison me with legal fees and cause my profits to evaporate.” Again, another statement out of ignorance. The vast majority of startups never get sued. Don’t make a mountain out of a molehill.

    “In other words, if the startup fails, I lose, if the startup succeeds, I lose. So why bother?” Reminds me of the saying “whether you think you can or think you cannot, you are probably right.” Seems to me, you (and many others) are using the threat of patents as a convenient excuse not to follow your dreams and be something more than a cog in a wheel. Those that cannot always find an excuse while those that can don’t accept excuses.

  20. Kinkfisher

    There’s really no point trying to argue with these people. They’ve been raised on a diet of anti-patent (and often anti-IP in general) vitriol from communities like Slashdot, who are uninformed and inexperienced yet mindlessly regurgitate what they’ve heard or read online. The majority of these people don’t even know that the crux of a patent is in the claims; they barely read the abstract and/or the title, and then rant and rave and point out marginally related technologies as prior art.

    Sure, there are problems with the patent system, such as some examiners being behind the curve, the USPTO’s incomplete knowledge of all the prior art out there, and some patents either being over-broad or of low value. But the discussions people like the author and several commenters here engender are absolutely unhelpful in addressing the real issues.

  21. Joe

    >>I’m trying to think of another business, where breaking the law is a necessary part of the business model.
    >>And apart from the long list of shady activities that can get you jailed, nothing comes to mind

    You need to look at more laws… there are a ton of them and many are contradictory. Many of the laws are really just there as a form of taxation, or as a barrier to entry often created with the insistence of the established businesses*.

    One of the first things I ever learned when starting a business was that you should never worry about breaking the law, because you will. The goal is to survive the first year or two, after that you can worry about the morass that is the US legal system. Just make sure that you don’t break any laws that will result in jail time, and always limit personal liability with a corporate shield.

    *examples and citations needed…

  22. IndependentVoter

    This is one sadly misleading piece of journalism.

    Everything you can dream up has NOT already been invented. More specifically, HOW you solve a problem can differentiate your invention from prior art. I am guessing the author had never filed a patent application in his/her life.

    Just because someone has a patent on a windshield wiper does not mean you can’t file a patent for an improvement on a windshield wiper. Also, the structure of the independent claims vs. the dependent claims can make all the difference in the world as far as whether your patent infringes on another.

    I do, however, although somewhat reluctantly, have to agree on the comments, specifically those regarding punctuation, and more importantly those pertaining to the use of commas, that excessive use of commas, while providing ample breathing opportunities, which themselves can be restful, if not relaxing, can be, at least on occasion, distracting from the meaning of the message, although it might still be possible, especially if the reader has a breathing difficulty, to infer the proper meaning in spite of, or if used judiciously, because of, the very punctuation contained therein.

  23. Yes, noone at our team filed for any patents yet. And it’s not even because we’re based in EU. Surveys show that more than 70% of startups never patent:

    http://www.readwriteweb.com/start/2010/07/high-costs-keeping-software-st.php
    http://radar.oreilly.com/2010/07/why-software-startups-decide-t.html

    And two major things that stop them from patenting are costs, and uncertainty if their work is patentable or not. They are uncertain because – seemingly – everything in software is already pattented. Of course, you have a valid point that you can invent around the patent. The thing is, most young developers never do, because they are scared to go into the whole software patent idiocy. And with the rapid growth of software patenting, you can’t even be sure, if your “reinvention” doesn’t infringe on some other work. And that’s what the article was really about.

  24. Juggler314

    I feel like the people on here defending these patents don’t realize how easy these concepts are. The problem is…lets take a nice innovative patent – the light bulb – it’s well known that edison did not invent it first, he just managed to patent it first. There were several others that had working light bulbs around the same time (this is common, it happens a lot in science). The difference with most of these software patents is that it’s not one or two other really hard working brilliant scientists that happen to come up with the same idea around the same time. Something like a “1-click shopping cart” is something that any of *literally* thousands of people could easily develop – something that probably has been developed time and time again. I myself have coded little bits of web code here and there over the years that would easily stand as prior art for plenty of web based software patents. Mostly these things were developed internally for some corporation…so there’s no real record. However I can guarantee you that nearly all these patents that are mentioned in these sorts of discussion have been implemented hundreds and hundreds and hundreds of times prior to whatever company actually patented it. The reason is that they are obvious concepts, completely and utterly obvious given the body of work at question.

    To make this clear, if I told a web programmer (lets say in 1995 or so, or around whenever cookies started being a part of the web) that I wanted to have a website that let people buy things online. It would be a natural consequence of just designing a site that you’d implement some way to remember people. It would then be a natural consequence of that to just plug all that info in when the customer wants to order something. It’s no great leap to go from there to, oh lets just put a button in that auto-orders this thing and bypasses the whole confirmation screen. It’s a thought process that anyone in the web design field can come with. The fact that it is an easy, obvious thought process to get there, on it’s face invalidates it as a patent. Patents should not be awarded for things that any one in an entire industry can come up with.

    It’s like saying you should be awarded a patent on copper wire. And then suing anyone that uses copper wire to transmit electricity. Electricity only transmits over metal wire (for the most part) thus using some sort of metal wire is a natural consequence of that and thus shouldn’t be patentable. It’s not innovated, it’s simply the way the world works.

    Realizing that electricity passing through a coiled wire produces a magnetic field and that another coil setup in proximity to that will pick up the magnetic field and then produce a current of it’s own (ie transmitting power over air) is something that would have taken a lot of tinkering, guesswork etc. Thus something like that should be patentable.

    It’s hard to come up with good examples in the software industry because most of the things that come along are quite evolutionary. Patents on things like using a mouse are fairly valid – developing a pointing technology for computers is something that would have required a whole lot of innovation (first make a graphical operating system, then decide that using arrow keys to move a cursor around isn’t good enough, etc etc). I guess the point I’m trying to make here is that only once in a blue moon does a brand new way of interacting with the web come along. You can argue that something like that is patentable, but most of the time simply the existence of the web and existing technologies for interacting with it lead to these so called innovations. No one sits around in a lab for years working out the details to one click ordering. A basic mock up of that probably took 20 minutes.

    In summary patents should not be awarded for concepts that can be thought up by the bulk of the industry they encompass. And none of this “everything is easy in hindsight” BS. Very nearly all of the major software patents have prior art somewhere.

    I have personally written code for a website for a large company that asked a user for the area code and first 3 digits of the phone number, then spit out the locality of where that number was. This was written in 1996. There have been at least a few patent applications that have purported to “patent” “dynamic creation of content from user submitted input”. Based on my own prior art no one should ever be granted a patent for dynamically creating content from user input unless they did it before 1996. And I can assure you I was not the first person to do this. As soon as you could run a web browser and have code return things (which is as long as CGI has existed) people have been writing code to return dynamically generated data. Yet still people try and patent things around this.

    Should I, as a 21 year old in 1996 have patented said “business method”? Of course not i was just doing something in the regular course of my internship!

  25. Me

    “Software patents don’t need to be detailed (e.g., have source/pseudo code). I could easily describe, for example, a drop down box and a coder would easily have been able to figure out how to make it work. In most instances, it is the architecture that is important … not nitty gritty details of the code.”

    And yet in all other industries patents are granted on the implementation, not on the idea. If you can find another way to implement an idea, then good for you; you’ve worked around the patent. This is the way it should be.

  26. Haniyasin

    so what would you say about Lodsys after individual ios developers and soon after individual Android developers , microsoft developers
    giants protected their ….. by paying the license …but Lodsys is shaking the pockets for pennies  .575% of sale.
    and the patent is vague that you can not avoid for in-app upgrade

  27. Someone

    By implication, software patents and intellectual property definitions has made millions of software developers guilty of implicit infringement. Policy has converted well meaning individuals into criminals.

    Whether it is video games, business software, learning tools for children or a database screen.

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