Canadian Law Professors Insist Banning The Sale Of Word Is Good For Society & Innovation

from the really,-now? dept

Rob Hyndman points us to two Canadian law professors, Michael Trebilcock and Edward Iacobucci, insisting that patents are "the mother of invention" in an article that mostly spends its time trying to defend the silly injunction (already put on hold) barring Microsoft from selling Word or Office, because it supposedly violates a patent, 5,787,449, on XML editing of a word processed document. There are all sorts of problems with the column, kicking off with Hyndman's question as to how law professors should be considered experts on innovation...

But, let's dig further into the details.
Patents are essential to the modern system of innovation. Once produced, information can be transmitted at zero cost. In the absence of patent protection, would-be inventors become vulnerable to competition that would drive the value of their discovery to zero, leaving them with no compensation for the costs of producing that information in the first place.
This is the usual story. And it sounds good. But there's no factual evidence to support it. That's because it ignores reality. Yes, information can be transmitted at zero cost, but that does not mean that implementation is assured, or that the market stands still. Besides, I'm curious as to the claim "vulnerable to competition," as if competition is a bad thing. Most people recognize that competition drives innovation -- and yet, these law professors are suggesting the exact opposite. That you need less competition to drive innovation.

Furthermore, they are wrong in claiming that in the absence of patent protection "the value of their discovery" is driven to "zero, leaving them with no compensation." They say this as if the compensation is for the idea, rather than the implementation. That is simply wrong. No one compensates you directly for an idea. If you have a good idea, you need to bring a product to market and sell it. If someone else copies that idea, you still have a large first mover advantage and you understand the market better. On top of that, you should be ahead of the curve in terms of improving on the concept for the next iteration. That's competition. It doesn't mean the value of the idea is zero or that there's no compensation. Claiming such makes no sense.

Again, beyond common sense, the historical evidence suggests that these law professors are simply wrong. Countries with no or weak patent protection have seen tremendous innovation over time. And it's because it's competition that's the mother of innovation, not a lack of competition. For well over two hundred years, economists have recognized that monopolies that remove competition are bad for innovation. These lawyers are insisting that the opposite is true, and present no proof.
Microsoft objects that the injunction ordered by the trial judge goes too far. (It has been put on hold until after the appeal, which is to begin Wednesday.) But injunctions are almost always ordered to prevent continuing infringement, and for good reason. To simply order money damages for future infringement would be to force i4i to license out its technology at a court-imposed price.
This is misleading. While it is true that in the past injunctions were the norm, since the US Supreme Court's MercExchange ruling more than three years ago, courts recognize that injunctions often do not make sense. The reason they don't make sense is because they require stopping the sale of an entire product (or lines of products) due to a single infringing feature. That makes no sense, and the courts have recognized this. I'm not sure why these law professors do not.
Just as there are good reasons not to compel citizens to sell or rent out their homes at prices set by judges, there are very good reasons in general to avoid compulsory licensing of intellectual property. Court determinations of the value of intellectual property are necessarily somewhat conjectural, yet damages awards require courts to act, in effect, as price regulators. By contrast, injunctions do not prevent a licensing deal from being done, but rather cede to the owner of the property the authority to set a price. Just as giving homeowners the right to decide whether to sell or rent out their houses does not destroy the housing market, in terrorem arguments about the death of Word under this injunction are without merit.
Again, this is quite misleading. It implies that an injunction leads to the natural market setting the price for licensing, but nothing could be further from the truth. If someone is pointing a gun at your head and negotiating over how much you have to pay to stay alive, that's not exactly a fair and open economic transaction that both parties enter into under their own free will. Claiming that this is somehow a more accurate market is pure folly.
Meanwhile, Microsoft has vociferously argued that despite the trial judge's careful vetting of the evidence, i4i did not establish at trial a firm basis for its damages claim for past infringement. This claim about the speculative nature of past damages sits uncomfortably with Microsoft's opposition to injunctions. Given the complexity of measuring supply and demand for a unique product, it must be true that there is some empirical uncertainty about the precise level of past damages. But if patents are to have value, this uncertainty is unavoidable: A damages award is the only available remedy for infringement that has already taken place.
Again, I have to admit confusion over these claims, which seem to have no basis in reality. It is not "the patent" that has value. It is the product. For sale in the market. And it's the consumer who values it. The fact is that many more people seemed to value a complete package of Microsoft Word. They were not buying it because of i4i's silly and questionable patent. They were buying it because Microsoft Word is a useful product. The difference in sales for Microsoft Word if it had not included XML editing would likely be negligible at best. There is no evidence of damages. If i4i and these lawyers are claiming that the "damages" are i4i's inability to sell its own product, again, that is difficult to square with reality. Competition happens all the time, and it's as good thing. i4i's inability to come up with a product or marketing plan that people wanted is its problem, not Microsoft's.

Also, the lawyers, in claiming that there was "careful vetting of the evidence," conveniently leave out that this was done in East Texas, which has a long history of vetting in favor of patent holders. Don't ask me, ask the bull that TiVo bought.
Protecting i4i's patent protects incentives to invent and the competitive process. In this case, the trial judge wisely offered such protection, while recognizing the court's own institutional limitations, by ordering damages for past infringement and injunctions going forward. While the decision was not a good one for Microsoft, it was clearly in the best interests of society.
Really? So, completely banning the sale of an entire office suite offering because one tiny, rarely used, feature might infringe on some random other company's products is "in the best interests of society"? That seems wholly without support. That would mean making every user of Microsoft's office suite suffer, for the benefit of a small 30 person company that developed a rather obvious concept. How is that possibly in the best interests of society?


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    Anonymous Coward, Sep 24th, 2009 @ 11:43am

    I can't say anything because I don't get it what was microsoft sued for.
    If it was just for the XML part and how a document can be described the prior art should be CSS and HTML where HTML describes data and the CSS forms describe how to present that data and if it was that, how was that somebody patented such basic system?

     

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      Fushta, Sep 24th, 2009 @ 12:37pm

      Re:

      Professors...sheesh

      Necessity is the mother of invention
      Competition is the mother of innovation

      This means if the market needs a certain product, then someone will eventually invent a product that fills that need.
      If you are getting your ass handed to you by the competition, it's time to innovate.

      Patents need not apply.

       

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    iNtrigued (profile), Sep 24th, 2009 @ 11:44am

    Bias much??

    Well first off, I think it is hilarious that they say they closed the comment section for "legal reasons." It is fairly obvious that they just didn't want to respond to criticism.

    But I don't think we should even give them a second thought. Not trying to be Captain Obvious, but everyone involved in this article are from Canada so the bias is blatantly OBVIOUS. And like Mike points out, almost all their points are completely wrong and/or misleading.

    Why are our tax dollars going to such a common sense court battle? I mean, the second a judge looked at this they should have been like, "Next!"

     

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      Trails, Sep 24th, 2009 @ 12:15pm

      Re: Bias much??

      That was probably the globe's doing, not theirs.

       

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      Trails, Sep 24th, 2009 @ 12:18pm

      Re: Bias much??

      In addition, not sure what nationality has to do with it. I'm canadian, I think this is bs. It's not like the us doesn't have its fair share of people demanding more ip protection.

      Suggest you discuss the topics, not make bizarre prejudicial statements relating to people's nationality.

       

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    rw (profile), Sep 24th, 2009 @ 11:45am

    No compensation?

    If there aren't any patents, Lawyers can't be compensated. It has nothing to do with any of the companies involved. The Lawyers only make good money when they can win on of these cases.

     

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    Richard (profile), Sep 24th, 2009 @ 11:51am

    mother of invention

    insisting that patents are "the mother of invention"

    expect a trademark lawsuit from the estate of Frank Zappa...

     

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    Reed, Sep 24th, 2009 @ 11:52am

    A world without word

    I think this case is absolutely ridiculous. It highlights the stupidity that patents have gotten us into, but in a way it is very poetic. I mean honestly Microsoft has a history of bullying companies with their IP into becoming partners or subsidiaries (or just putting them out of business). Why can't it happen in reverse?

    Now that they have come full circle from dissing patents to embracing them it is ironic that this has happened. Their own greed and power grabbing has lead them down this road. They could have shaped the industry to be free and open, instead they get what they put into it - GIGO

    The funniest part of this debate is when major retailers "weighed" in saying there is no alternative to MS word and it would cut into their business if it was taken off the market. Last time I checked there were plenty of alternatives that could be used. Trying to bill Word as the beginning and end of word processing is just plain crazy IMHO.

     

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      iNtrigued (profile), Sep 24th, 2009 @ 12:11pm

      Re: A world without word

      To be fair to Micro$oft, a lot of the competition is based off of M$ Office products. Now whether that is because of their bully attitude or them being the industry's standard is up for debate.

      Personally, I wouldn't shed a tear if M$ Office went away. I would much rather everyone used Open Office, but that could just be because I like the free exchange of ideas rather than a locked down system(aka patents, political-two-party system, etc.).

       

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    Designerfx (profile), Sep 24th, 2009 @ 11:58am

    patents are the issue

    I agree patent law is seriously messed up, and that the East Texas courthouse needs to have all its judges thrown out and get a fresh set in.

    Under the current system however, I4I is correct, so I can understand that. Aside from that though, this would have banned word from using XML markup right?

    I'd like to see this play out simply because MS is the one who trumpets their faith in patents for their own benefit.

    Capitalism: everyone only likes it when it's on their side.

     

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      :Lobo Santo (profile), Sep 24th, 2009 @ 12:10pm

      Re: patents are the issue

      "Capitalism" is the polite word for "market anarchy."

      True capitalism takes no sides--aside from the obvious 'might makes right' advantage which always exists in any anarchic situation.

      TRUE capitalism only exists in the black market. Aside from that, capitalism is a myth, a buzz-word; or to be more precise: it exists in the same manner in which the United States is a democracy (hint: it's not.)

      Our market methodology today is a half-controlled not-quite "free market" system.

       

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        Anonymous Coward, Sep 24th, 2009 @ 1:11pm

        Re: Re: patents are the issue

        "United States is a democracy (hint: it's not.)"

        Correct...kind of. We are a Democratic Republic. In a true democracy, the general public makes all the decisions. In a republic, a select few make all the decisions. In a democratic republic, the general public makes the decision on which select few will make the decisions. Say what you will about corruption -- and I'll most likely agree with you -- but the system is working the way it was designed.

        /soap box

         

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    The Buzz Saw (profile), Sep 24th, 2009 @ 12:05pm

    Uh oh!

    "The reason they don't make sense is because..."

    "The reason is because..."

    GRAMMAR PHAILURE!

    Great article otherwise. ^_^

     

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    The Buzz Saw (profile), Sep 24th, 2009 @ 12:20pm

    Dumb Professors

    The professors ignore a couple other key aspects to any competitive market.

    First off, generally speaking, people try to AVOID entering areas competition unless they truly feel they have a vastly superior alternative that will turn a few heads. Even when a potential product competes with another, the creators will often tweak it just so that it "serves another market" or at least another portion of that market. Competition is good, but most sensible businessmen compete only on certain fronts while trying to isolate their own market as best they can (sometimes simply by targeting some other geographic region to begin sales).

    So much emphasis is placed on the idea, but virtually no emphasis is placed on the execution. Has anyone seen those patent pending hangers for sale on TV? THOSE ARE PATENT PENDING. Those are a joke. I could build those using the K'NEX I have in my apartment. Why are they deserving of a patent? Even if they are somewhat unique, the fact remains that these creators were first to market. They will reap the rewards (if there are any). I highly doubt people would rush out, create an identical hanger, and try to sell it.

    On the other end of the spectrum, if you have a truly distinct idea that is "worthy" of a patent, the idea is probably complex enough to where keeping it a secret would protect the idea until it is time to bring it to market. Once it comes to market, competitors would require a great deal of time to begin offering a superior alternative (and would likely only compete if they felt they could add onto it).

    People patent the silliest things, though. Actually, let me rephrase that: the USPTO awards patents on the silliest things. I read a few patents recently, and many of them were signed by these Arab/Indian names. No disrespect to those cultures, but it's kinda tragic that we outsource the patenting process because of how much junk goes through. We need a common sense committee that takes one look at 90% of these "inventions" and says, "Really?"

    Oh, and software/business-model patents should be banned.

     

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    asdf, Sep 24th, 2009 @ 12:21pm

    I'd like to know why when Microsoft defends themselves, or tries to protect a product they are evil, but when Apple does it, it's all.."good for them, we love apple!" Apple are just as much IP nuts as MS.

     

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      The Buzz Saw (profile), Sep 24th, 2009 @ 12:24pm

      Re:

      Personally, I cannot stand Microsoft. I think it is a rather unethical company, but I really do feel bad for it in this case. This tiny company is exhibiting greed through IP abuse.

       

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      DJ (profile), Sep 24th, 2009 @ 1:20pm

      Re:

      It's the old Jobs vs Gates bandwagon that everyone jumped onto in the 80's/90's still.
      Personally I think it's childish. Pick a PRODUCT you like, and stick with it. There are certain brands out there that I stick to because of their consistency in quality, but if a better mouse trap comes along I switch.

       

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    The Buzz Saw (profile), Sep 24th, 2009 @ 12:23pm

    Reality

    Out of curiosity, does anyone have any links to stories where someone failed to get a patent and crashed financially due to excess/unfair competition? Everyone talks about how patents "protect innovation", but I've never ever heard a story about patents saving the day.

     

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    Chris, Sep 24th, 2009 @ 12:38pm

    Not just Word...

    Some people seem to be all "Well, I don't see what the downside is to losing Word. Everyone should use OpenOffice."

    OpenOffice and iWork both use XML for documents too. It's not hard to imagine, then, that i4i after winning a case against Microsoft could go after Sun and Apple as well.

    It's not beneficial to anyone for i4i to win this trial, except for i4i itself (and its investors).

     

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      pferland, Sep 24th, 2009 @ 2:04pm

      Re: Not just Word...

      wouldn't Google Earth be a target also, I mean you can read and edit/save KML files that are based off of XML. Hell anything that can read and write XML is probably a target, browsers, web apps, the list can go on and on.

       

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    Anonymous Coward, Sep 24th, 2009 @ 1:02pm

    You guys can go to Patentlyo for few articles relating to this subject. They were probably dated about a month ago or less.

    Bottom line, MS has a pretty good chance on appeal, they're not a flight risk, and they can afford to pay the extra damages if things don't go their way. Therefore, the stay seemed to be the proper route for the CAFC to take.

    6

    On another note this is at least a decent patent related article from you Mike, but I am going to have to disagree with you on your whole idea about patents not helping to drive innovation. I think that, for the most part, patents do actually drive innovation by providing an incentive to disclose the innovation. However, you have arts, like this one, where the disclosure amounts to nothing useful and is merely a tool to sue someone. That said though, a whole lot of patents related to manufacturing processes that simply would not be disclosed to the general public if not for patents.

     

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      DJ (profile), Sep 24th, 2009 @ 1:29pm

      Re:

      "patents do actually drive innovation"

      Then I guess there was no innovation prior to patent laws. I guess there is no innovation in countries where there STILL are no patent laws.

      Patents do not DRIVE innovation. Competition drives innovation. Need for recognition and/or monetary compensation drives patents.

      Patents, on the surface, are a good thing. The current laws, especially in the US, need to be completely re-done.

       

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    Griff (profile), Sep 24th, 2009 @ 1:06pm

    So all IP protection is bad ?

    If I innovate to fill hole in the software market and then someone buys one of my distribution CD's, copies it, and sells it under their company name, and I had no legal redress, there would never be any point in me writing any commercial software for a mass market.
    So surely some IP protection is essential for innovation to work.

    (I know, Mr Masnick would suggest I connect with my users by selling them T shirts and making personal appearances. ).

    But if someone looked at my product and it's neat features and basically rewrote it from scratch with identical looking UI and same outward performance & features, I'd probably want some protection for that as well. or else why innovate in the first place.

    If I tried to patent the way I'd added a neat "print preview" option before printing, however, I'd expect the patent judge to throw it out as obvious.

    My main beef with this whole case is that the whole area of XML for WP documents is a huge pile of obviousness. But if the patent is granted, that's all water under the bridge now.
    If MS have infringed, then the punishment has to be a deterrent. To deter these guys means a hefty price tag.

    I don't buy this "how does banning Word help customers ?" It's like saying "how does fining Pfizer more than £2B for repeatedly marketing off label help sick people". The answer is that in the long term they might stop doing it, and sick people will not be deceived as much.

    If you have a legal system that defines this as a crime, then you have to punish and deter, and MS have shown that fines they can clearly afford act as no deterrent.

     

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      Mike Masnick (profile), Sep 24th, 2009 @ 3:14pm

      Re: So all IP protection is bad ?

      If I innovate to fill hole in the software market and then someone buys one of my distribution CD's, copies it, and sells it under their company name, and I had no legal redress, there would never be any point in me writing any commercial software for a mass market.

      Really? Funny, last I checked MySQL (which allowed just that) sold for a billion dollars and is making a ton of money. Red Hat's financials look pretty damn good too. But, according to you, those couldn't exist, since there's no incentive there since anyone can just copy their product and sell it under their own name.

      I would say that point is thoroughly debunked.

      (I know, Mr Masnick would suggest I connect with my users by selling them T shirts and making personal appearances. ).

      Uh, no. But if you can't understand basic business models such as those applied by MySQL and Redhat, I guess it's no surprise that you would misunderstand the business models we talk about.

      But if someone looked at my product and it's neat features and basically rewrote it from scratch with identical looking UI and same outward performance & features, I'd probably want some protection for that as well. or else why innovate in the first place.

      Yes, I mean, that's why there's no innovation at all in software. Xerox invented the GUI and then Apple and Microsoft copied it. But there was never any incentive at all, right?

      VisiCalc invented the spreadsheet, and then Lotus and later Microsoft copied it. But there was no incentive to innovate at all, right?

      Again, you make these claims as if there aren't plenty of real world examples that show you're wrong. There are clearly incentives.

      And just because someone can copy it doesn't mean they automatically dominate the market. Open Office is a near replica of Microsoft Office... and it's free. And it has a much smaller market share than Microsoft Office. According to your reasoning, that's impossible.

       

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    cos, Sep 24th, 2009 @ 1:44pm

    Well, I think i4i (eye for an eye??) is using their patent out of spite.

    Microsoft implemented this thing and ignored the patent on purpose, while throwing the patent holders out. Anything they get they fully deserve.

    Plus, the judge ruled against Ms because their lawyers pissed him off, or smth.

    I don't personally use Office or have any need for it (most people wouldn't do and just don't know it) and would be very interested to see what would happen if they got forced to stop selling it.

     

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    Anonymous Coward, Sep 24th, 2009 @ 1:47pm

    @Griff
    What?

    someone buys one of my distribution CD's, copies it, and sells it under their company name

    First, this would actually be protected by trademark and copyright infingment - not patents. Second, I actually believe that copyright protection in a limited form (say...the original 17 years, although this may be to long in the digital age) is perfectly appropriate. You are rewarded for innovating and when your innovation no longer has that new car smell the rest of us can use it to further other innovations.


    But if someone looked at my product and it's neat features and basically rewrote it from scratch with identical looking UI and same outward performance & features, I'd probably want some protection for that as well. or else why innovate in the first place.

    Did you actually think about this scenario? Especially when it comes to Word? It would take lots of software developers and a huge ammount of money to duplicate the functionality of most software packages; typically, when someone tries this it takes MORE resources than the original. This is because you cannot simple create a piece of software you must attempt to duplicate the underlying architecture in order to achieve the "same outward performance." On top of that, it would take a lot of time, during which your competitors product has captured market share. Now you release a product 1 year later (they have made updates, by the way, which improve the functionality) and expect people to pay for the knock off version? Your product wouldn't be that much less expensive seeing as your production cost was much higher than the original.

    I don't buy this "how does banning Word help customers ?" It's like saying "how does fining Pfizer more than £2B for repeatedly marketing off label help sick people".

    Wow, you knocked that straw man to the ground hard. First, telling doctors to use a medication for the wrong purpose because it is cheaper to produce has BEYOND NOTHING to do with banning a software product for allegedly infringing on a patent. Second, whatever you feel about patent law it is absurd to say that Microsoft did anything wrong or that "they might stop doing it." Do you know anything about software patents? It would be impossible to determine if you are infringing.

    There were over 16,000 computer implemented patents issued in 2008 alone. There is no way to search for software patents; that is not to say you can't search patents, you simply will not find anything if you do. The word XML does not appear anywhere in the patent filed by i4i - actually, a patent lawyer would activly discourage such language because a smiple search for XML would have made it clear that this patent was trivial, obvious, and not original.

    The Supreme Court ruled that software patents were not leagal in 1972; however, using some clever logic lawyers began submitting patents not for software but for software "installed and executed on computing machine." There are several lawyers who have attempted to make the case that patent infringment does not actually occur when the software is written but rather when it is used. A few of these lawyers even considered filing a lawsuit against the users of purchased software in order to make them pay additional fees.

    www.endsoftpatents.org

     

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      Griff (profile), Sep 25th, 2009 @ 5:12am

      Re: It is absurd to say that Microsoft did anything wrong

      I think it is naive to suggest that MS knew nothing about i4i before this hit them. They have people paid to trawl patents for precisely these scenarios. And whether I think they did anything wrong is beside the point. The law (however flawed) has decided that they did, and hence seeks to punish them. It would take lots of software developers and a huge ammount of money to duplicate the functionality of most software packages Not all innovative software huge bloatware. Some cool iPhone apps, for example, could be copied by a talented programmer in under a week. I was arguing theoretically against the extreme position (often taken in this blog) that all protection (copyright, trademark, patent) is bad and that we could have innovation without any of them existing. I think if there was NO protection of any sort against your hard work being ripped off, people would be reluctant to fund innovation up front. But clearly the system we have in place has many flaws. Assuming IP protection DOES exist, I don't think unwittingly infringement should be viewed as an offence, nor should it lead to payments for redress. But once you've been told you are infringing, then you are doing it knowingly. If you respond to a "cease and desist" letter with "prove it" then it is reasonable to bear the plaintiffs costs of proving it if you subsequently are shown to be wrong.

       

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        Matt (profile), Dec 22nd, 2009 @ 2:41pm

        Re: Re: It is absurd to say that Microsoft did anything wrong

        The law is (unfortunately) what it is. Agreed that if you break it, no matter how stupid it is, then you have broken the law. MS should have to pay actual damages.

        Disagree that there would be no innovation without legalized monopolies. Aside from being wrong, that is stupid. It assumes that the only reason people innovate is to obtain a monopoly. To be sure, if the only reason people innovated was to obtain a monopoly, then no one would innovate unless they were rewarded with a monopoly. But the underlying premise is absurd. People innovate because they think _innovation itself_ (not the monopoly on innovation) can help them in the marketplace, or else because of some itch unrelated to commerce.

        IP is a tax, and like all taxes it is inefficient and works to discourage what it taxes. It is a tax on improving existing inventions, because in order to improve them you have to find a workaround. It is a tax on future artistic endeavors, because in order to create you have to find a way to avoid your influences. And it is a tax on society because we have to cede huge chunks of mindspace and public domain back to private actors without receiving any benefit for doing so. When regimes do this with public and private land, they are called totalitarian. When they do it with ideas, they are called Eastern District of Texas.

         

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    Chris Rhodes (profile), Sep 24th, 2009 @ 2:15pm

    Patent Thought Exercise

    While I don't disagree with your conclusion that an injunction against MS in this case makes no sense, I am still not convinced that patents do not encourage innovation, at least in some fashion.

    Certainly, they can be (and are regularly) abused, and used as a club to bludgeon competition (especially with vague, over-general, and/or obvious ideas). I do not agree with this use, obviously, and I believe we need to trim down the IP system considerably, which has become a runaway train in all three major areas (patents, copyright, and trademark). What I have trouble coming around to is the idea of a system without patents at all, and to this end I have devised a simple scenario that I hope someone can use to point out where my thought process goes wrong.

    Let's assume, for the moment, that I have spent the last several years of my free time designing a new product. We'll say it's a new car engine that gets a hojillion miles to the gallon. Whatever. Let's assume that no patent law exists, and anyone is free to copy any design they wish. Now assume that I have completed this engine design, and I want to make some money off of the idea. How do I do it?

    I do not have the facilities to mass produce the engines myself. I could shop the idea around to engine makers who do have the means to make my new engine design, but what is to stop them from saying "Thanks, we'll do that." and then kicking me out the door without any compensation? How do I market my idea without leaving myself wide open, in other words?

     

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      nasch (profile), Sep 24th, 2009 @ 3:02pm

      Re: Patent Thought Exercise

      Most people are not in favor of totally abolishing patents. However, if that did happen it seems like you could present your idea (not the technical details, just its capabilities), and offer to sign a contract that grants you payment conditional on the invention working as promised.

      Obviously you would need a lawyer for when the car company tries to screw you over, but that would be the case with patents anyway.

       

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      Mike Masnick (profile), Sep 24th, 2009 @ 3:10pm

      Re: Patent Thought Exercise

      Let's assume, for the moment, that I have spent the last several years of my free time designing a new product. We'll say it's a new car engine that gets a hojillion miles to the gallon. Whatever. Let's assume that no patent law exists, and anyone is free to copy any design they wish. Now assume that I have completed this engine design, and I want to make some money off of the idea. How do I do it?

      We have amazingly good capital markets these days. If you have such an amazing concept, you would go to some venture capitalists or other private investors and raise money. That's how many of the best startups in Silicon Valley worked.

       

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    Anonymous Coward, Sep 24th, 2009 @ 2:29pm

    "Then I guess there was no innovation prior to patent laws. I guess there is no innovation in countries where there STILL are no patent laws."

    I did not say that there are not other things which drive it as well.

    Never the less, there is still the things that go on behind closed corporate doors which the world would never see if not for patents. And the world benefits from having them disclosed.

    But, on the whole, you are somewhat right in that the current system is pretty bonked and could use a complete rewrite. Problem is though, who's up for writing what it should be? Yeah, that's a pretty big problem.

     

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    Andrew D. Todd, Sep 24th, 2009 @ 3:18pm

    As An Open Source Developer.

    I am probably one of the few people here who have actually written and published open-source software, in the sense of moderately big programs of a thousand lines.

    The most recent sizable program I completed was a program to automatically set up the navigation links for books of many chapters on a website. I had been given the job of putting a such a book, a novel, up on the website. The book consisted of about forty word processor files, one for each chapter, each of which had to be converted to HTML, and all of the HTML files then had to be linked together. Then I had to go back and find and fix all the inevitable mistakes in the links. By the time I was done, I was really, really, fed up. Furthermore, I knew this was not the end of the job, because there were about ten more books coming, as fast as the author could put them through a final rewrite (*). So I wrote a program to do the job. When the additional books came in, I was able to convert and post each one, using my program, in about an hour. This is what Eric Raymond calls "scratching one's own itch." I don't know whether I saved work, but I did save irritating work, which is not the same thing. Having done so, I published the program on the website as public domain. Why not? My dominant motivation was simply not to have to do the same bloody thing over and over again like a bloody machine.

    (*) He had spent twenty years writing the books, but only with the coming of the internet was it feasible to publish them. So the job was backlogged from the beginning.

    This sort of motivation will always insure an ample supply of open-source software. Invention is simply an incident of making stuff. As you work, you solve problems which arise, and that is just another name for invention. Invention has very little necessary relationship to patenting.

     

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    Chris Rhodes (profile), Sep 24th, 2009 @ 3:44pm

    RE: RE: Patent Thought Exercise

    We have amazingly good capital markets these days. If you have such an amazing concept, you would go to some venture capitalists or other private investors and raise money. That's how many of the best startups in Silicon Valley worked.

    But would you agree that it would be quite an uphill battle to get people to invest potentially millions of dollars into an idea that I wouldn't be able share the details of? "I came up with an engine that gets a hojillion miles to the gallon, but I can't share any of the details. Just trust me and invest."

    Because if I were to share the details, what would stop an investor from declining to invest and then creating the startup himself to cut me out of the loop? Sure, I might be able to throw in an NDA or something in an attempt to protect myself, but when a new startup starts producing an engine eerily similar to my design next month, and the investor I pitched the idea to originally just happens to now be a major investor in said startup, how am I to prove that my NDA was actually broken?

    Overall, even if it were possible to work around the issues with other contract law and the court system (the extensive use of which is already major reason against the current IP regime), I would still argue that the lack of patent protection would deter me from spending the time.

    If I love (or am exceedingly good at) designing engines, but I don't love (or am exceedingly bad at) running a company, a no-patent system rather leaves me out in the cold.

     

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      Mike Masnick (profile), Sep 24th, 2009 @ 6:39pm

      Re: RE: RE: Patent Thought Exercise

      Because if I were to share the details, what would stop an investor from declining to invest and then creating the startup himself to cut me out of the loop? Sure, I might be able to throw in an NDA or something in an attempt to protect myself, but when a new startup starts producing an engine eerily similar to my design next month, and the investor I pitched the idea to originally just happens to now be a major investor in said startup, how am I to prove that my NDA was actually broken?

      I hear this fear from people in Silicon Valley all the time, and I've never -- not once -- seen in born out in reality. Investors aren't looking to steal ideas. They're looking to fund great companies. If you really can do what you say, people will fund you.

      If I love (or am exceedingly good at) designing engines, but I don't love (or am exceedingly bad at) running a company, a no-patent system rather leaves me out in the cold.

      Again, not true at all. It's very rare for a startup to have a single founder. Usually you have the guy who's exceedingly good at designing engines team up with a smart business guy.

       

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        Chris Rhodes (profile), Sep 25th, 2009 @ 12:04pm

        Re: Re: Re: Re: Patent Thought Exercise

        @Mike

        I hear this fear from people in Silicon Valley all the time, and I've never -- not once -- seen in born out in reality.

        While it is refreshing to hear that, I do feel that I should point out two things:
        (1) Our system currently allows patents, so the fact that you have not seen this behavior in the current system could be a case of apples and oranges.
        (2) I would prefer that the rights to my work not depend on the goodness of other peoples' hearts. "They probably won't abuse it" might be true, but I wouldn't want to count on it.

        Again, not true at all. It's very rare for a startup to have a single founder. Usually you have the guy who's exceedingly good at designing engines team up with a smart business guy.

        I guess my point was that it seems rather limiting to say that if you design the next revolutionary technology, you must yourself necessarily bring that technology into the physical realm to sell it, else your (potentially years of) work is for naught. That is to say, I believe there is some value in letting innovators sell their ideas whole to people who can actually bring the product to fruition. Of course, that gives rise to the "patent troll" situation we have going on now, which is centered not around protecting innovators, but around squashing or extorting money from innovators who happen to come up with the same solution independently. I'm honestly not sure what the answer to that particular problem is.

        @AC

        You seem to be rather hostile, but I'll give you the benefit of the doubt and assume you were after an actual discussion:

        Who said that you couldn't?

        Well, actually, I did. I was trying to figure out a method by which I could give out the details and still be protected from someone cutting me out of the loop. If you can give me such a method, then the question is answered and my worry is unfounded.

        We have these places where such issues are examined and decided. They're called courts.

        Well yes, as my very next sentence (and your snarky reply) shows. My concern was not whether or not courts existed, but how I would prove that they took my idea in one of those courts.

        So? Sounds like a personal problem to me.

        And it very well could be. If the majority of the people out there see it differently than me, then a lack of patent law would not hamper innovation in general, and my concern is again unfounded and just something I should get over. If, however, the majority of people see it as a deterrent as I do, then I think we would need to take a good long look at things before we just wipe the system out entirely.

         

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      Anonymous Coward, Sep 24th, 2009 @ 10:12pm

      Re: RE: RE: Patent Thought Exercise

      But would you agree that it would be quite an uphill battle to get people to invest potentially millions of dollars into an idea that I wouldn't be able share the details of?

      Who said that you couldn't? It seems to me that you're just making up a strawman there.

      Sure, I might be able to throw in an NDA or something in an attempt to protect myself, but when a new startup starts producing an engine eerily similar to my design next month, and the investor I pitched the idea to originally just happens to now be a major investor in said startup, how am I to prove that my NDA was actually broken?

      We have these places where such issues are examined and decided. They're called courts.

      Overall, even if it were possible to work around the issues with other contract law and the court system...

      Oooh, so you have heard of courts. I guess you were just feigning ignorance.

      I would still argue that the lack of patent protection would deter me from spending the time.

      So? Sounds like a personal problem to me. I might feel "deterred" from working unless I'm getting regular blow jobs, but that doesn't mean the gov't should provide them to me.

      If I love (or am exceedingly good at) designing engines, but I don't love (or am exceedingly bad at) running a company, a no-patent system rather leaves me out in the cold.

      Unless you go to work for a company doing that. What? Get a job? Oh, the horrors!

       

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    Anonymous Coward, Sep 24th, 2009 @ 4:38pm

    @Chris Rhodes:

    Do as others did, they build a functional prototype and show that to the investor and don't explain anything. Many people don't even bother to patent anything before they get the money because they don't have it so patents wouldn't protect no one in that case and don't forget even if you had a patent there is more then one way to do things, patents are awarded based on designs so if your investors see it and can design one functional prototype that uses a different design but accomplish the same thing you are out of luck anyways. That is why people usually say that you have first to secure your invention meaning you have first to imagine all the ways that something can be accomplished and patent each and everyone off them not an easy task.

     

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    Anonymous Coward, Sep 24th, 2009 @ 11:06pm

    Compulsory Selling

    "Just as there are good reasons not to compel citizens to sell or rent out their homes at prices set by judges, there are very good reasons in general to avoid compulsory licensing of intellectual property."

    Here in the US we have "eminent domain" that does indeed provide for the compulsory selling of homes and property and I'm quite surprised that Canada doesn't have something similar. Oh, wait. I just did some checking and it seems that Canada does indeed have something similar called "expropriation". I can't believe that a couple of Canadian law professors would have never heard of it.

     

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    staff1, Sep 25th, 2009 @ 6:07am

    stop the shilling!!!

    "...in an article that mostly spends its time trying to defend the silly injunction (already put on hold) barring Microsoft from selling Word or Office, because it supposedly violates a patent..."

    There is nothing "supposedly" about it. The court ruled they infringed. Therefore, there is nothing "silly" about the injunction. Microsoft knew about this for years and in fact knew of the patent and modified their product to infringe in spite of that knowledge. They asked for it and they got it. Serves them right.

    How much money does Microsoft and their thieving pals pay you to write this trash?

     

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    Gregory, Sep 27th, 2009 @ 11:58pm

    Re: Patent Thought Exercise

    Chris Rhodes:

    Consider the situation you have set up; you have come up with something that patents were supposed to help with from the beginning - something that was not obvious, something revolutionary, something that's going to knock the pants off every other competitor out there.

    Well, one hopes that you've worked out most of the major kinks, and that you've kind of tested it, and now you're looking on making money off it.

    That tells me one thing straightaway: you, sir, are a Grade A certifiable Einstein-class genius.

    In which case, chances are, there are going to be complexities arising from your invention that only you or another certifiable genius would understand. Chances are, you have a few more genius-level ideas rattling about in your head, just like Tesla.

    Chances are, therefore, any VC or angel investor out there would snap at the chance of partnering with you and making an absolute killing - not just once, but several times.

    And don't forget - we're talking about a competitive market here. You exhibit your engine - clap it in a car, give it a pipette's worth of gas and motor all over New York for a day. You have about 100 VC companies sit in and make sure you're not gaming it - heck, have James Randi verify you're on the up and up.

    I guarantee before the day is over you'd be worth millions.

     

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      Chris Rhodes (profile), Sep 28th, 2009 @ 9:06am

      Re: Re: Patent Thought Exercise

      @Gregory

      The idea that stands out to me in your response is that the necessity of obtaining a patent (for an idea to be profitable) is directly proportional to the obviousness of the idea. That is, the most obvious ideas would require a patent to be profitable (by virtue of their ability to be easily understood and copied), while the most non-obvious ideas wouldn't.

      This obviously runs counter to the intended goal of our patent system (issuing patents only for non-obvious ideas), and is probably why our IP system is such a mess.

      Very insightful, thank you.

      (Humorous Note: I can imagine the Catch-22 patent system of the future. If you apply for a patent, it is automatically rejected, since any idea that requires a patent to to be profitable must be too obvious for a patent to be issued. Problem solved!)

       

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