Sadagopan's weblog on Emerging Technologies,Thoughts, Ideas,Trends and The Flat World

The Fallacy called Patents -Time To Discipline!

Vivek Wadhwa writes,"Patents make a lot of sense in many industries; they are needed to protect the designs of important components or design of physical products. But in software these are just nuclear weapons in an arms race. They don’t foster innovation, they inhibit it. He adds, That’s because things change rapidly in this industry. Speed and technological obsolescence are the only protections that matter. Fledgling startups have to worry more about some big player or patent troll bankrupting them than they do about someone stealing their ideas". A recent Berkley patent survey shows,venture backed business file for more patents as against startups across industries including software. Brad Feld points out to the absurdity behind the idea of patents. Bob Warfield with multiple startup credits and himself a patent holder points out how difficult it is to fight suits against patent trolls. He points to several absurd situations that we all come across in the name of patents while defending genuine progress.

Earlier we covered why patent systems need to be disciplined and went to the extent of saying that its time to abolish patents for atleast software industry. On the other hand some people think that we have reached the dark age of innovation – Physicist Heubner says that rather than growing exponentially, or even keeping pace with population growth, major innovations & scientific advances peaked in 1873 and have been declining ever since. While examining number of patents granted in the US from 1790 to the present. when he plotted the number of US patents granted per decade divided by the country's population, he found the graph peaked in 1915. The global rate of innovation today, which is running at seven "important technological developments" per billion people per year, matches the rate in 1600. Despite far higher standards of education and massive R&D funding "it is more difficult now for people to develop new technology”.

Patents impede innovation and not encourage innovation. Innovation may be the core to success and it is not be mistaken against patents or R&D budgets. As Michael Scrage wrote brilliantly, the simple fact is that R&D spending is an input, not a measure of efficiency, effectiveness or productivity. Ingenuity, invention and innovation are rarely functions of budgetary investment & pointed to the fact that Wal-Mart, Texco and Dell have miniscule R&D budgets, their quality, procurement and growth requirements have probably done more to drive productive innovation investment than any competing initiatives. Growing market competition, not growing R&D spending, is what drives innovation. A successful innovation policy is a competition policy where companies see innovation as a cost-effective investment to differentiate themselves profitably. John Hagel adds that it is a fallacy in equating patents with innovation. Normally the focus is on product innovation, ignoring process and business model innovation. Process innovation is far more powerful than product innovation – it has a multiplier effect that product innovation can rarely match & notes that the only effective measure of innovation activity is the rate of productivity improvement in an enterprise – the growth in value added generated per employee. Static productivity measures can be misleading & what may really count is the ability to sustain and amplify productivity improvements through innovative products, process improvements or new business models. Lets all shout for more innovation and whatever comes in the way that may include patents – lets get rid of them!

Microsoft & Open Source

Microsoft & Open Source movement are traditional antagonists. Just as we thought that Microsoft was extending an olive tree to the open source movement, here comes the news that is upping its ante against the open source movement. Microsoft asserts that one reason free software is of such high quality is that it violates more than 200 of Microsoft's patents. And as a mature company facing unfavorable market trends and fearsome competitors like Google, Microsoft is pulling no punches: It wants royalties. If the company gets its way, free software won't be free anymore.

Microsoft deserves to get fair and reasonable returns on the investments that it made to develop its patent basket. The anti-microsoft sentiment is running dangerously high.While raising all this noise, Microsoft seems to be looking at collecting royalties, like the way it pays Novell, and perhaps not sue an entire agitated open source community and its users. After all OIN itself has powerful backers.

Sometimes buyer power and influence can dictate the course of such moves but lager enterprise and open source adoption look still sticky. Interestingly, in the enterprise space, large consulting & system integrators are taking a cautious approach towards supporting open source software, in order not to upset theirsizeable and profitable revenue stream from implementing and supporting proprietary software. While the realization is there to be more engaged in open source, fact of the matter is that they don't know exactly how, nor do they understand the impact on their business model.
The problem, it appears to me is in the process of patent granting itself.While covering Microsoft's recent frenzy of patents acquisition, I wrote that, it may be time to abolish software patents. Microsoft had filed very high number of patent applications in the US in the last few years - the pace of filing made news: 60 fresh, non obvious patentable ideas every week. Reason for sudden increase in applications - Microsoft found that others file about two patents for every $1 million spent on research and development. Microsoft had not taken an interest in patents in its early years because, as it thought it could rely on copyright. Microsoft says that the courts changed the rules, and Microsoft had to respond like everyone else. Eliminating software patents would give Microsoft another chance to repair its relationship with open-source users. Microsoft has repeatedly pointed out to "intellectual property risk" that corporate customers should take into account when comparing software vendors. This has now led to an interesting situation :On the one side, Microsoft has an overflowing war chest and bulging patent portfolio, ready to fight - or cross-license with - any plaintiff who accuses it of patent infringement. On the other are the open-source developers, without war chest, without patents of their own to use as bargaining chips and without the financial means to indemnify their customer.

I think far reaching changes need to be done in the space of patenting and till such time Microsoft and others are better off by talking and working out reasonable arrangements. Litigations would complicate things further.

Contact

Search

Resources

Labels

Archives

Saturday, August 07, 2010

The Fallacy called Patents -Time To Discipline!

Tuesday, May 15, 2007

Microsoft & Open Source