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Patent Trolls & Devil's Advocates

posted on 15th May 2011

So if you're in the tech world you may have heard that several small iOS developers have been sent legal papers by what is commonly known as patent troll, asking for money for a patent that apparently covers In App Purchasing. There are lots of questions, people are angry and as usual patents are being berated.

Patents: The Good

So what are patents? Well their intent is to encourage investment in research and development, by providing a means to prevent others from copying your work without having to pay anything. On the face of it they're potentially great things. A company can spend millions, if not billions, on researching something that vastly improves their products, and their competitors cannot simply copy it and get the benefits without the expenditure.

Now a lot of people seem to think that patents are for stifling innovation, they're a "only we can use this" sort of thing, but often patents are licensed to others, so that others can use the invention, while the inventors get rewards. A good example of this is the MPEG patent pool.

Ultimately patents are meant to be like copyright for inventions. This blog post is copyrighted to me, and I get that for free. But copyrighted things are usually easier to create. Almost anything I can create can be copyrighted, and I can create a lot of stuff with minimal money. It costs far less to write a blog post, a book, a song, a piece of software, take a photo, paint a picture etc than it does to research and develop a new invention. Patents are intended to provide a stronger protection for these more costly things.

Patents: The Bad

Unfortunately, while patents are great and highly beneficial in theory, in practice they have become a hinderance, especially in the US. Patents are far too easy to acquire and they can be awarded for incredibly trivial things. This is a really big issue in software, where people come up with obvious stuff and get a patent on it.

The problem here is that people are able to patent ideas rather than inventions, or rather are able to class ideas as inventions. This is a very dangerous system as someone can just sit there, think something up in 5 minutes, patent it and then sit back and rake the money in, without actually doing anything. Meanwhile those who actual do something worthwhile are left at a disadvantage.

As an example, lets take the Lightbulb. So we're developing the first lightbulbs. It is taking a lot of time and effort and money to build these lightbulbs, test what makes the best filament, what is the best shape for the bulb, what is the best fixture to use, what is the best gas to put in. Eventually we get to the best combination and we go and patent it. Such things are what patents were made for, you've worked out the best way to do something by putting in lots of time and money, and you would like to protect that investment.

Unfortunately, someone else came along a bit early and patented the idea of a light source that is powered by electricity. Now such a thing seems far too broad. Above, we have developed the incandescent light bulb, something specific that takes work. This idea took no work and covers all types of lightbulbs that could be made. This is damaging to innovation.

Ideally if you're patenting something, you should be required to show a prototype, to show that you have been putting time and effort into refining something, rather than just some idea you thought up.

Patent Trolls

Patent trolls are people or companies, who do nothing but buy up patents with the sole intent of going after others. Now these should be made distinct from patent pools, which are often organisations who manage patents from several companies who make stuff, to make it easier to licence patents. Patent trolls often fully own the patents and do nothing with them, and usually didn't even file them in the first place.

In an ideal patent world these types of organisations shouldn't exist. If it cost more to get a patent, in terms of time and money spent developing the invention, then they wouldn't be able to. Also, if patent law place restrictions on selling patents, maybe stating that after purchasing a patent you have to actively use it or you lose the patent, it would stop patent trolls as they would then have to make products.

Lodsys

So finally onto Lodsys. Yes they are a classic patent troll. They make nothing, all they really own are patents and they're going after people asking for money for patents that really shouldn't be patents at all. I mean honestly, patenting the idea of making payments within an app? If it was some specific method of making payments, that offered great benefits and took a lot of time and effort to develop I could understand, but we're talking about the idea of making a payment within an app.

Now this is where I'm going to play Devil's Advocate. Under the law, this patent exists, Lodsys owns it and they are therefore entitled to seek fees for its use. As much as we may disagree with it in principle, it's how things are. Now they could do this a variety of ways, and often patent trolls file infringement lawsuits asking for millions, if not billions in compensation. And they cannot be counter sued because they make nothing so can't infringe on anything.

Lodsys however, have been somewhat more reasonable. They aren't sending out cease and desist letters. They aren't taking people to court (yet). Apparently what they have sent out is a notice saying that they have this patent, they would like to start collecting licensing fees for it.

They could also ask for massive lump sums in order to licence the patent, that could put many small developers out of business. Instead they say they are asking for 0.575% of US revenue, which for most devs would amount to a few 10s of dollars a year, if that. Nobody wants to pay that, obviously, but similarly nobody is going to go bankrupt from it.

I'm not saying that I in any way like what is going on. The reality of the situation sucks, but it is also sadly unavoidable. These are things that shouldn't really be patentable in the first place, but they are and we have to deal with that. I may dislike what Lodsys represents, and that laws in various countries allow them to run such a business, but from all appearances so far, I cannot claim they are evil or unreasonable.

If you would like to send me a comment on this post, send an email to pilky@mcubedsw.com. Alternatively send a tweet to @pilky.