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RE: Another Microsoft XML patent


event id 1026
On Tue, 7 Jun 2005, Bullard, Claude L (Len) wrote:

> Problem here is, Rick, that there wasn't that much 
> innovation.  A lot of burglary and rebranding, but 
> not as much innovation as is claimed.  I don't 
> disagree with your essential point that cooperation 
> is the better way, but if patents aren't filed, 
> under the current system, the small companies will 
> be muscled out of business.

I didn't used to believe this, but now I'm persuaded,
since the most influential proposals for "patent reform"
supported by Microsoft [1] and other pro-SW-patent groups,
as incorporated into the draft Patent Act of 2005 [2],
call for abandoning the "first to invent" model and
adopting a "first to file" rule.  It's being done
in the name of "international patent harmonization"
(read: allowing large patent-holding companies to win
with uniform ease in any jurisdiction).

The "first to file" standard ensures that the
number of patent applications will rise (maybe
dramatically), that the USPTO will need ever more
money, and that the big companies who perpetuate the
existence of the pathological, dysfunctional
patent system through the influence of the USPTO will
retain control of the system -- which benefits them
and disenfranchises smaller companies.

In this context, the patent arms race is fueled,
and that's exactly what the large companies want: they
easily retain their monopolies through this system.

A comical element in Bradford Smith's "patent reform"
plan [1] is the cancellation of the current $500 patent filing
fee for certain classes of small players:

"We believe there should be a zero filing fee system for small inventors 
that qualify for the small business entity status under the PTO 
regulations today. If that type of zero filing fee system were put in 
place, it would provide a useful step for the small and start-up inventors 
that will continue to be such an important part of our economy."

What a silly sop: by most estimates, including those published by the
US government, the end-to-end cost of prosecuting a patent is about 
$13,000 USD, and sometimes as high as $30,000.  Waive the "$500"?  I guess
that's meant to encourage more patent applications for patents that will
never be used, so that companies now filing 35-40 patent applications per
week will not stand out in such bold relief.

If Len's observation about the need for individuals and
small companies to file (like crazy!) for patents is correct, it's
hardly a long-term solution.  It exacerbates the acknowledged
problem of the "patent thicket" in which nobody can know what's
patented ("everything" already is) and nobody except the largest
patent holders -- as a general rule -- can hope to "win" in a
showdown.

The sad thing is that many of the big players, if their employees
are honest and bold enough to admit it, know this system of
patent proliferation is pathological.  See example statements from
Cisco and Intel:

Federal Trade Commission
Patent Reform Workshop
April 16, 2004
Bancroft Hotel, Berkeley, California

http://www.law.berkeley.edu/institutes/bclt/patentreform/transcripts/BCLT_Patent_Transcripts.pdf

1) Robert Barr, [then] Vice President for Intellectual Property
and Worldwide Patent Counsel for Cisco Systems in San
Jose, California, where he is responsible for all patent
prosecution, licensing and litigation.

**... We stockpile patents... a vicious cycle of
stockpiling of patents, mutually shared destruction**

"So patents are a business. But, secondly, the reason we are
in this situation is because those of us who are involved
in the thicket contribute to it. We stockpile patents.
We increase -- every time we find out that everybody else
is increasing patents, we increase. So you have a
vicious cycle of stockpiling of patents, mutually shared
destruction. What is wrong with that? It is a drain on
resources, money, engineering time that could better be
used for innovation."

2) David M. Simon, the Director of Intellectual Property at
the Intel Corporation where he manages all patent generation
and analysis. His responsibilities include filing numerous
patent applications on behalf of the corporation and directly
supervising 80 employees

"... it [the current patent system] 
causes us to file what I personally think is an
inordinate number of patents, and every year my CEO says,
'Go get more,' to the point where my patent filing budget
and prosecution budget is now more than half the size of
our Corporate Research Lab's budget. That, to me, seems
to be out of kilter. And, you know, obviously -- and by
the way, that does not include litigation, that is a
separate budget which is also roughly the same..."

And Bill Gates is unmoved: "we think patents are patents" [3]

Jaffe, on (sic!) reform:

When issues of patent policy are considered by the courts,
the Congress, and the Executive branch, you can be sure
that the opinions of patent lawyers and patent holders will
be heard. While their arguments will often be couched in
terms of the public interest, at bottom their interest is
in their own profits and livelihoods, not in designing a
patent system that fosters the overall rate of innovation.
Even the PTO itself cannot be expected to advocate necessary
reform, if such reform reduces its revenues (by discouraging
bogus applications) and threatens its established mode of
operation. -- Adam B. Jaffe and Josh Lerner

http://xml.coverpages.org/patents.html#Jaffe

> 
> Why?
> 
> The reason to fix the global patenting systems 
> is that they have become a means to extort.

Yes.  That's why the previous posting (mc) which laments
a large number of lawsuits *against* large companies,
while citing something documentable, is only a small part
of the picture.  Most of the extortion which goes on
takes place OUTSIDE the courtroom.  Witness the 
patent holdup (some will call it "patent terrorism")
of the OMA by the MPEG cartel.  Extortion can make use
of the courts, but hardly ever does: it's simply based upon a
distribution of power (monopoly) that makes threat
a perfectly effective weapon. [4]

> A 
> company with means to file patents can invade the 
> technical means of markets that they don't participate 
> in and use their size (yes, the bigCos do waaay 
> more damage than the little companies all hype 
> to the contrary) to hold the innovative companies 
> hostage.  So the little companies with marketshare 
> MUST patent as fast as they can.  Does that [expletive deleted]? 
> You betcha.

Sad.  It's going to get a lot worse before it gets
better, apparently.

> 
> The web made this worse.  Email and other means to 
> send messages directly to desktops have made it 
> possible to get a thin patent, then use the medium 
> (including lists like this) to ensure knowledge of 
> the patent goes directly to the CIOs, CEOs and other 
> corporate officers who are then obligated to go 
> to their legal departments with the information.
> 
> An interesting read is the history of the Wright 
> Brothers struggle to get their patents.  Because 
> at that time patent applications meant one could not 
> demonstrate the invention, they had to face down 
> the whole country of France where it was claimed 
> powered flight was invented.   They had to fight 
> Curtis who got an advanced look at the Wright Flyer 
> and ripped off their concepts for wing warping. 
> 
> So, having the web where we regularly discuss our 
> ideas is a pretty dangerous thing UNLESS one wants 
> to be open with ideas.  Even then, anyone with 
> Google or a good spider can harvest these lists 
> daily and patent like mad.  
> 
> len
> 
> 
> From: Rick Jelliffe [mailto:ricko@a...]
> 
> Unfortunately, just because the USPTO is a laughing stock among
> programmers does not mean that its influence is not strong elsewhere.
> Venture capitalists still look to pupported IP when evaluating companies,
> and researchers are frequently rated by how many patents they get.
> 
> Looking at the major advances or sources of innovation in the last 15
> years, the WWW and XML in particular, they come out of co-operation and a
> renunciation of the private ownership/control of infrastructure standards.

[1] Microsoft's recipe for "patent reform"

The Patent System and the New Economy
Invitational Event
American Enterprise Institute for Public Policy Research
Thursday, March 10, 2005
Main presentation by Bradford L. Smith

Video available
( 00:00:00 ) Christopher DeMuth
( 00:06:33 ) Bradford L. Smith
( 00:36:26 ) Q. Todd Dickinson
( 00:49:47 ) John F. Duffy
( 01:00:22 ) James DeLong
( 01:11:14 ) Andre Carter
( 01:22:27 ) Panel Discussion
( 01:31:02 ) Question and Answer

http://www.aei.org/events/filter.,eventID.1026/transcript.asp
http://www.aei.org/events/eventID.1026/event_detail.asp
http://www.aei.org/events/contentID.20050308133855710/default.asp
http://www.aei.org/events/eventID.1026/event_detail.asp#

[2] Patent Act of 2005

http://promotetheprogress.com/ptpfiles/patentreform/houseoversight/committeeprint.pdf

[3] http://www.microsoft.com/msft/speech/FY04/GatesFAM2004.mspx

[4] http://xml.coverpages.org/patents.html#Reback

Excerpt:

<q>[...] Threatening a massive lawsuit, IBM demanded a meeting
to present its claims. Fourteen IBM lawyers and their
assistants, all clad in the requisite dark blue suits,
crowded into the largest conference room Sun had.

The chief blue suit orchestrated the presentation of
the seven patents IBM claimed were infringed, the most
prominent of which was IBM's notorious "fat lines" patent:
To turn a thin line on a computer screen into a broad
line, you go up and down an equal distance from the ends
of the thin line and then connect the four points. You
probably learned this technique for turning a line into
a rectangle in seventh-grade geometry, and, doubtless,
you believe it was devised by Euclid or some such
3,000-year-old thinker. Not according to the examiners
of the USPTO, who awarded IBM a patent on the process.

After IBM's presentation, our turn came. As the Big Blue
crew looked on (without a flicker of emotion), my
colleagues -- all of whom had both engineering and law
degrees -- took to the whiteboard with markers,
methodically illustrating, dissecting, and demolishing
IBM's claims. We used phrases like: "You must be kidding,"
and "You ought to be ashamed." But the IBM team showed
no emotion, save outright indifference. Confidently, we
proclaimed our conclusion: Only one of the seven IBM
patents would be deemed valid by a court, and no rational
court would find that Sun's technology infringed even
that one.

An awkward silence ensued. The blue suits did not even
confer among themselves. They just sat there, stonelike.
Finally, the chief suit responded. "OK," he said, "maybe
you don't infringe these seven patents. But we have 10,000
U.S. patents. Do you really want us to go back to Armonk
[IBM headquarters in New York] and find seven patents you
do infringe? Or do you want to make this easy and just
pay us $20 million?"

After a modest bit of negotiation, Sun cut IBM a check,
and the blue suits went to the next company on their hit
list.
</q> 



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