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| Reflections on Intellectual Property Rights, by John H Terpstra |
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Thursday, August 05 2004 @ 06:53 AM EDT
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Reflections
on Intellectual Property Rights
John
H Terpstra, CTO, PrimaStasys
Inc.
There is much
preoccupation with so-called intellectual
property laws. There are businesses that are eager to pursue
litigation almost as soon as new laws are passed. Safeguards in the
form of patent laws, copyright agreements, service mark and trademark laws are being used to achieve special-interest goals that were
perhaps not considered by those who passed these laws into being, but
may well have been considered by those who crafted them. Intellectual
property laws are designed to limit the use of concepts and are
potentially injurious to creativity and innovation.
This
article reflects on vital aspects of the intellectual property
debate. We have a responsibility towards future generations to resist
the abuse of power or privilege. The use of intellectual property
constraints as weapons of business can rapidly degenerate to little
more than the selfish initiative of a special interest group
in an activity that is hostile towards society as a whole. The
application of such force against another business or against
consumers effectively equates to protectionism and interventionist
activity. Insofar that intellectual property laws can be used to
constrain competition, the final effect is to force consumers to pay a
higher price than if free market competition had triumphed. In effect,
the intellectual property debate significantly challenges the freedom
of a nation's citizens. There is a better way; we must follow it.
Intellectual
Property Pursuit is Self-Interest-Serving
The American
dream1
was once driven by a vision in which men and women set out with
deliberate intent to build a society of independent and free
individuals, each set to create a better world. The world of this
vision was built on a hierarchy of responsibilities.
There was
structure and order in the old world. Foundation priorities expressed
in older literature held that foremost in priority is the Supreme
Being who endows us with inalienable rights and to whom total
subservience is due. The Constitution of the United States of America
reflects such ideals. To such as held this view, second in priority
is one's own family, and third in importance is one's fellow man out
of which emerges a great social responsibility.
Perhaps it is
delusion to think that there was a time when American society held a
high and ordered regard for one's neighbor. If such perceptions
indeed were prominent in society at large, it may be argued that
much has changed. Today there is a prevalence of
self-interest-serving activity.
My research on
the subject of intellectual property, a modern concept, has turned up
starkly contrasting facets of the old world. When examining the past
through the looking glass of time, it is a challenge to sort fact
from fiction.
It is not
possible to do justice to those who preceded us in life if we do not
acknowledge the tension between cause and effect, between minority
forces of good that paved the way to our day, as well as the forces
that have created much of what we may be prone to criticize today. It
would be a tragedy if there can be no alternative but to choose one
extreme over another, or to take sides without consideration of the
net balance that existed.
We are able to
criticize evil and the generation that bore it, but of necessity a
nation that has self-respect will pay tribute to the intelligent
forethought and the courageous acts of earlier generations. If we
can not learn from the past, we will pioneer and chart a new course
without the benefit of hindsight to cast light on a dark road.
Not everyone
consciously strives to preserve the old vision. Likewise, very few
are consciously intent on destroying our world. Those who are
consciously working to undermine the assets of a free world ought to
be pitied and must be taken seriously. Society today must stem the
tide of aggressive self-interest and the priorities of special
interest groups above the needs of a healthy social balance. If we
fail to do this future generations will hold us to account.
Reality must of
necessity lie somewhere between extremes2,
mostly in a state of tension between opposing forces and within the
bounds of public norms. There has always been a small minority that
have sought to pursue personal interests at the expense of society as
a whole. It would appear that the degree to which a society will
tolerate the wanton pursuit3
of personal gain, to that extent society as a whole must bear a
burden of consequential damages. In the long run, we best serve our
own interests by helping our neighbor to prosper both personally as
well as in business.
Constant
personal vigilance is the price of freedom4.
It is the effect of this phenomena en masse that either gives future
generations a better world, or in its absence robs it of the assets
it needs.
Creativity
is Intellectual Property
To better understand the issues, we could consider the ancient
origins5
of property laws and how they may apply to product of our minds.
Intellectual property can be nothing more than the product of
thinking men and women; thinking that has creative results.
Intellectual property is a conceptual term that describes the
intangible products of applied creative thinking. It encompasses
knowledge, research skills, as well as applied expertise in a
particular field of endeavor. Rights attached to creative and
productive thinking have been an integral part of British Common Law
since Alfred the Great6,
King of England. The protection of tangible, physical assets is fully
covered by laws against stealing.
When a tangible physical object is stolen, the owner is deprived of
the use of that object. The same can not be said of products of the
mind. Great ideas and concepts can be reimplemented or used by others
without physical loss to the originator. The very point of open
source software is the potential for every concept to benefit the
largest audience that can effectively be reached. Each benefactor has
the ability to improve on the concept and its implementation.
This introduces the problem at the heart of the intellectual property
debate. Taken to its logical conclusion, intellectual property laws
seek to limit the use of concepts. And since concepts lie at the core
of activity of the mind, what controls and limitations might be
pursued next to limit one's thinking?
Alfred's laws stopped short of an attempt to control the thoughts of
men. The pursuit and torture of the reformers in England in the
sixteenth and seventeenth centuries stepped well over the line of
what can be tolerated in a free world. Men and women were burned at
the stake7
for what they may have thought. Are we in danger of repeating this
assault against integrity in the name of protecting the expression
and use of concepts?
Property
in General
Ancient civilizations have records and laws regarding personal
property as well as rights pertaining to land ownership. Hammurabi8
of ancient Babylon codified laws covering property. Bible records
show that Abraham bought land so he could bury his wife9.
Land title in such cases was perpetual, and generations considered the
land as a family possession.
Personal property is a chattel like money, clothes, tools, etc.
Chattels can be used, lost, sold, donated, or traded. They are
portable; land is mostly fixed in place and thus is not capable of
being moved.
In 1066 the Norman, William the Conqueror, defeated Danish King
Harold at the battle of Hastings. To assure the future safety of
England, William introduced the feudal10
system. The feudal system was designed to guarantee the King of
sufficient forces to defend the realm. He appointed Baron land owners
who were made responsible to supply an army. Barons appointed knights
and so on, down to the serfs who worked the land. All land was
considered Royal (Real) estate that could be held through grant of
title. It is from laws that originate from William that today we
refer to Real Estate, or Royal Estate11;
property that exists under title by decree of the Crown or the
Parliament.
We must answer one key question: In what way is the product of a
person's mind like chattels and/or like real estate? Many people
will argue that there can be no similarity and that any attempt to
codify, or to assert classification of, mental products as property
has many attendant dangers. When we consider the abuses of mind
control through history we would be foolish to ignore the nature of
mankind by passing into law controls that are readily open to abuse.
Have we already gone too far? If so, what course is being charted
today?
A History
of Patents
From the fourteenth century, the English Crown granted monopolies in
exchange for payment of a fee. Monopolies were granted for trade in
commodities as well as for some luxury items. Many monopoly holders
were corrupt and records show that bribery and corruption became a
significant problem. Additionally, the monopolies led to price
increases12
that affected the entire supply chain for goods.
By the fifteenth century the city states of Venice and Florence
granted monopolies13
for new inventions.
At
the time of James the first of England, in 1623, the Statute of
Monopolies was passed into law. It restricted the rights of the Crown
to grant monopolies14
solely to new methods of manufacture. The new monopolies were called
litterae patentes, or
letters patent. These grants were made accessible to the public.
Since that time, a patent is a contract (or bargain) between the
assignee (inventor) and the Crown. The inventor (assignee) was
required to reveal all secrets involved in the method of manufacture
in return for which the Crown would grant or permit protection to
restrict others (unlicensed practitioners) from imitating (copying)
the (invented) method of manufacture for a 20 year period. It was
reasoned that the inventor would recoup costs and make a healthy
profit from the invention within that time frame.
The argument in
favor of such patents15
(monopolies) was that at the conclusion of the 20 year period of
validity anyone could benefit by common use of the manufacturing
method. In this way the Crown could claim that the greater public
good was being served by permitting such monopolies.
Significantly,
the first two patents issued in Britain covered a glass blowing
method and a weaving method that were being practiced in Belgium. The
issue of these patents served to restrict free trade, not to protect
the inventors. Intelligent people perform regular audits. In
business, processes and procedures are audited: those that work as
promised are kept and improved, those that fail to deliver the
promise of the sales pitch get thrown out. Has the use and
application of patents been given the treatment it deserves?
Patents for
methods of manufacture are exclusive in that the assignees'
permission is required before use. Patent holders can charge a fee
for permission to make use of the patented process. Therein lies the
value of the monopoly -- the ability to gain income. That value is
asserted by the government-sanctioned right to prosecute. Prosecution
is a negative sanction.
In what way do
manufacturing process methods compare to computer algorithms? How can
one compare a software process, or set of instructions, with a
manufacturing process? Before you rush into saying, "Yes! That's
it! Computer software is like a manufacturing method.", consider
the fact that intellectual property laws are not globally consistent.
In fact, some countries do not respect such laws at all.
Given the lack
of uniformity of the disposition of some nations towards this
subject, one should question the wisdom of creation of laws and
statutes that lie at the edge where enforcement may trespass into the
realm of mind control by placing constraint on what one may think and
do. Certainly, such laws16
will impact how one may make use of conceptual ways of solving a
problem in business or in life.
Patents can be
used to restrict access to the inventor's methods of manufacture. Thus
the ability to exercise control is extremely attractive. The patent
is a lawful mechanism by which an assignee can protect his income and
by which he may intervene in the ability of another person to gain
income from the invention.
It should be
realized therefore, that the pursuit of patents for trivial
inventions may permit abuse of the patent system. Patents are abused
when used in the exercise of lawful power against the necessary
freedom of another person. If the history of mankind does not cause
one to fear abuse of lawful power, nothing can stop such person who
is deliberately intent on mischievous abuse. Could it be that
software patents create potential for menace?
Protectionism
and Interventionism
Protectionism17
is the practice, system, or theory that applies tariffs18
or quotas to limit or to impede the flow of foreign goods and
services into the local economy with the purported intent of helping
local (domestic) producers. When passed into national law, tariffs
are a measure that is presented to the consumer as a means of
protecting the commonweal (public well being).
It is often thought of as a modern practice, though its roots go well
back in time. The British practiced protectionism in that all trade
between colonies had to pass via England so that such trade could be
taxed and regulated. By 1783 America had broken free from England,
but the freedom was short-lived. In 1789 the American Congress passed
its first tariff act. In 1816 and 1824 Congress added protectionist
measures to its tariff act. Then in 1828 she passed the Tariff of
Abominations that extorted up to 49% duty on certain items. America
felt it had to protect its northern businesses against the dumping of
goods from Europe. While this may have helped the New England states,
it undermined the economies of the Southern states.
In
his analysis of the effectiveness of tariff protection measures,
Taussig19
says: "The intrinsic soundness of the argument for
protection to young industries therefore can not be touched by the
conclusions drawn from the history of its trial in the United States,
which shows only that the intentional protective tariffs of 1816,
1824, and 1828 had little effect." It
is well recognized today, that the tariffs of this period forced the
Southern states to purchase manufactured goods from the
northern states rather than import cheaper overseas goods that were
subject to punitive import duties (tariffs). This was one significant
factor in the lead up to the Civil War of 1861-1865. Clearly, tariff
protection did not serve the United States well -- it created bitter
tensions between north and south.
One would think
that the lesson of the history of tariffs would have been well
learned. Sadly, this was not the case as not 70 years later the same
saga was due for a repeat performance. According to the USA
Department of State20:
"The Smoot-Hawley Tariff Act of June 1930 raised U.S. tariffs
to historically high levels. The original intention behind the
legislation was to increase the protection afforded domestic farmers
against foreign agricultural imports. ... The Smoot-Hawley Tariff was
more a consequence of the onset of the Great Depression than an
initial cause. But while the tariff might not have caused the
Depression, it certainly did not make it any better. It provoked a
storm of foreign retaliatory measures and came to stand as a symbol
of the 'beggar-thy-neighbor' policies (policies designed to improve
one's own lot at the expense of that of others) of the 1930s. Such
policies contributed to a drastic decline in international trade."
In
its 2002 Annual Report21
the Federal Reserve Bank of Dallas states: "...
Smoot-Hawley taught us trade's lesson the hard way - protect and
destroy. Today we're learning it the right way - compete and
prosper." Ludwig von
Mises22,
an economist said: "The history of mankind is a long
record of obstacles placed in the way of the more efficient for the
benefit of the less efficient."
As we review the track record of protectionism and interventionism it
is quite apparent that society refuses, to its own detriment, to
accept the fact that every attempt at interference in the free
economy causes hardship and potential economic ruin to the weakest
elements of society. I regard software patents in the same genre as
tariffs, but with potentially more devastating consequences.
The history of protectionism and interventionism should cause us to
question with great angst the motives of those who pursue software
patents. Even the pursuit of copyright claims requires great care,
for even in this can great harm be inflicted upon society. We are in
dire danger of crippling the engine of innovation in a once proud
world.
The
consequences of intellectual property action
In
his paper23,
"The Eagle has Landed -- While America works to protect
intellectual property, everyone else is innovating", Thomas
Goetz makes stunningly lucid observations regarding the drift of
intellectual property pursuit. Everyone who is involved in the
information technology world ought to read his article. He warns:
"The
US is in danger of repeating the mistake, this time with intellectual
property. In the face of new technologies and competition, the US is
toughening patent and copyright protections. It's leaning on other
countries -- and its own citizens -- to play by ever tighter rules. But
if it's not careful, the US will drive its intellectual property
offshore into a shadow world that, like shipping, is replete with
piracy and rogue states."
In
February 2004, Mr. Alan Greenspan, in his address at the
Stanford Institute for Economic Policy Research Economic Summit,
Stanford, California, said: "Rationalizing the differences
between intellectual property rights as defined and enforced in the
United States and those of our trading partners has emerged as a
seminal issue in our trade negotiations." He had begun his
speech with these words: "Market economies require a rule of
law. A society without state protection of individual rights,
especially the right to own property, would not build private
long-term assets, a key ingredient of a growing modern economy."
Long-term
businesses are well aware of the necessity to build long-term assets.
Clearly, the intellectual property question is at the top of the
agenda for many business executives. Goetz is correct though, there
is a distinct state of tension between innovation and protectionism.
The pursuit of intellectual property by way of litigation is no way
to solve the problem where a business is no longer able to innovate,
to invent and to create better business solutions.
A business that
witnesses the erosion of profits at the hand of competition will act
out of self-preservation and may seek the protection of its business
assets. That does not make it right for a government effectively to
help the business to remain inefficient. Instead of providing
protection, clarification should be sought to identify precisely what
must be protected as well as the specific constitutional reasons for
so doing. Such a discovery process may expose the real problem for
which a less draconian solution may suffice.
Profits -
the business challenge
The taking of a
stand in opposition to intellectual property litigation, and abuse
thereof, does not imply a disposition against commercial business
activity. Businesses must operate with the ability to be profitable.
This is in no manner at variance with the health of society as a
whole. In fact, a healthy society implies necessity of profitable
trade so that each member of that society can exchange the products
created, and services provided using each persons particular skills.
Any attempt to limit the profitability of a business would be a most
undesirable interventionist activity.
Interventionism
is the
policy and practice of interfering in the affairs of another
sovereign jurisdiction. The foreign jurisdiction can be another
family, town, state, or country and includes use of government power
to control or influence an economy.
When
governments interfere in businesses there is a loss of creativity and
innovation, efficiency declines and society
ultimately pays an unacceptably high price. The financial failure of
the old Soviet Union and the ideologies that drove it are a classic
example of the failure of government intervention in business.
Much of the
hubris in support of intellectual property litigation asserts the
dependence of business profitability on sustainable intellectual
property. In this debate, it is also asserted that simple algorithms
implemented in software must be protected, and that whoever thought
to obtain a software patent that covers it, or whoever thought of
claiming copyright over the expression of the idea that is
implemented in the algorithm has the right to seek royalties
apparently without bounds.
The assertion
"apparently without bounds" is necessary given the fact
that those who have resorted to litigation are willing to seek court
approval to obtain evidence of an infraction against their property
even where available evidence and due cause for suspicion may be very
limited. In the fullness of time, the facts surrounding these issues
will be determined by the courts. However this is a process that
causes considerable public alarm and is a costly pursuit for all
involved.
As society
advances and competitive forces catch up with a business, would it
not make more sense to invest precious financial resources in a way
that will create more opportunity for the business to find and
satisfy customer needs?
Customer
needs satisfaction
The core purpose
for which a customer buys a product or a service is to meet a
particular need. For example, the purpose of a power drill is to
enable the owner to create the right hole in the right place at the
right time. Someone who purchases a power drill is in effect buying
holes. Likewise, the purpose of all information technology products
is to improve business efficiency and effectiveness. Every process
that is solved using a computer can be done manually, or using older
and presumably less efficient methods. The point of stating this is
to amplify the fact that information technology consumers do not
usually set out to buy a license to use intellectual property per se.
Businesses that
understand their customers needs and that satisfy them efficiently
stand the highest chance of being profitable, particularly if they
can sustain the process. Customer needs satisfaction requires much
more than simply supplying a product. Software in particular requires
user training, a support infrastructure to handle customer concerns,
etc. Even these are not sufficient to keep customers happy. Smart
businesses maintain constant interaction with their customers. They
communicate frequently so as to reinforce the value proposition.
Customer satisfaction results from the persistent and clever use of
communication though all aspects of the total business environment.
When considered
and applied as a whole, the business will sell products and services
as part of a total package. The business will have strategies for
product development, for service enhancement; it will have
strategies for differentiating its solutions offering from
competitors. Smart businesses build sustainable differentiation into
every facet of business operation and will constantly refine them to
maximize the customer's satisfaction level. Marketing theory, practice
and research has shown that when every aspect of the product mix
meets customer needs, a lower priced competitive offer usually is not
sufficient to swing the business to a competitor.
In 1987 a
chemical company that desperately wanted to capture increased market
share offered competitively held accounts a higher level of service
as well as a 40% reduction in product costs. After 6 months they
succeeded in gaining very few competitive accounts. Prospective
customers simply said that they were happy with the solution they
were buying and that even a 40% reduction in price was not sufficient
inducement to affect a change in supplier. Purchasers will pay a
premium if the perceived value of a purchase choice is high enough.
If the perceived barrier to change is too high even a much lower
price may not induce a change of supplier.
Competition is
necessary in a healthy market because it gives a consumer choice.
There will be little real motivation to change supplier when a
consumer has been able to choose from alternative suppliers, and has
found satisfaction of its business needs. Competition provides
alternatives that help consumers to make a more persistent choice.
When customers
believe they have only the choice of a single solution there is a
tendency to continually re-evaluate the solution offering. It is
invalid to say that there was no choice; a choice of one solution
implies the ability to reject that solution and to permit the problem
to persist. My point is this: when choice is limited the practice of
due diligence demands greater review and evaluation. As a result,
there remains a latent desire to consider further alternatives as
they are presented.
Schools of
business have spent the last four decades teaching graduates how to
balance what is called the marketing mix (products, price, promotion,
distribution) so as to give the business maximum leverage in its
markets. Monopoly is a poor differentiator and creates a chasm of
potential dissatisfaction.
Physical
products can be copied, often with great ease. A company's business
strategies, the way it plans to respond to competitive and market
forces, are much more difficult to imitate or to predict. This is
where the real intellectual property of a business should be built.
These factors are far more sustainable than a functional algorithm in
a computer software program.
Questions
abound: Why would a business want to eliminate or reduce competition
through intellectual property controls? Is it remotely possible that
the information technology world has forgotten how to satisfy
customer wants and needs? Has the entire industry perhaps forgotten
customer needs?
I believe it is
more profitable for a business to focus on getting its product mix
and its business hygiene right rather than seek to eliminate
competitors through mechanisms that may seriously undermine a free
society. Intellectual property litigation is an affront to sound
business operation, it is not a wise strategy given an objective look
at history, and is a potential minefield for every business -- a
minefield that can blow up and destroy an industry.
What you
can do
You can help
stop the questionable pursuit of intellectual property by spreading
the message that there are better ways to make a business more
profitable. We must all encourage every business we deal with or
purchase from to be more customer needs-focused. In our buying
practices, we ought to be deliberate about rewarding those businesses
that deserve the purchases we make and withhold a purchase from a
business that fails to meet our needs.
When you refuse
to purchase a product because it, or its producer, failed to meet
your needs, do write that company to make them aware why they have
failed to win your support. It takes only a half dozen notes like
this to get a company to pay greater attention to its consumers. The
entertainment industry could not ignore the fact of a few thousand
letters advising them that consumers will no longer purchase their
wares under the licensing terms provided. A one-month public
moratorium on all purchases could bring the industry to its knees!
The solution to
the problem of monopolization of software intellectual property is
the creation and specification of open public royalty-free standards
for all software.
A private
conference is being held in Phoenix, Arizona, in September to address
this issue. At this I hope to participate in the launch the Open
Standards Alliance. Anyone interested in participating in founding of
the Open Standards Alliance should write to: osa@primastasys.com
Only when
technology can operate on a level playing field can competition
abound. Consumers need competition to keep prices down and to achieve
the environment necessary for better needs satisfaction.
The history of
mankind is a trail of minority action that often triggers events with
catastrophic long-term consequences. Despite this history and the
lessons we ought to learn from it, the present preoccupation with
protection of intellectual property in software, if not checked in
its course, will potentially destroy the American information
technology industry. Protectionism and interventionism stand at odds
with a free market and a profitable business climate. A software
business that can satisfy the needs of its customers in a sustainable
manner without use of coercive forces will not be driven to seek
intellectual property protection.
¤
Copyright ©
John H Terpstra, 2004. A copy of this paper is also available as PDF.
Permission
is granted to copy, distribute and/or modify this document under the
terms of the GNU Free Documentation License, Version 1.2 or any later
version published by the Free Software Foundation; with no Invariant
Sections, no Front-Cover Texts, and no Back-Cover Texts.
To obtain a copy
of the GNU General Free Documentation
License write to the Free Software Foundation, Inc., 59 Temple Place
- Suite 330, Boston MA 02111-1307, USA.
Biographical
Information
John H Terpstra
is CTO/President with PrimaStasys, Inc., a company that mentors
information technology companies and facilitates profitable change in
business practices. He works with businesses to realign information
technology practices with business goals.
He is a member
of the formation committee of the Desktop Linux Consortium, a long
term member of the Samba-Team (a major Open Source project), a well
known contributor and visionary in the open source community with a
very active commercial focus. He is a member of the Open Source
Software Institute Advisory Board. He has worked with the LSB,
Li18nux (now OpenI18N.Org), The LPI, and is a best selling author of:
The
Official Samba-3 HOWTO & Reference Guide, ISBN: 0131453556
Samba-3 by
Example, ISBN: 0131472216
Hardening
Linux, ISBN: 0072254971
OpenLDAP by
Example, ISBN: 0131488732
and has other
books in production.
John has worked
with The SCO Group (previously Caldera Inc.), TurboLinux Inc., in VP
level positions. Prior to moving to the USA in 1999, John founded and
managed Aquasoft Pty Ltd (Aust.) for 10 years. He has a Graduate
Diploma in Marketing (with Credit), UTS Aust. and an Applied Science
Certificate in Chemistry, QUT (Aust.).
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| Authored by: Wol on Thursday, August 05 2004 @ 08:35 AM EDT |
Crikey - first post !!!
Cheers,
Wol[ Reply to This | # ]
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| Authored by: Wol on Thursday, August 05 2004 @ 08:36 AM EDT |
| n/t [ Reply to This | # ]
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| Authored by: entre on Thursday, August 05 2004 @ 08:50 AM EDT |
This is relative to those whom want to help with the patents which need to be
fought on the grounds of prior art, such as the FAT file system. This is where
MS is heading against Linux and the next battle will have to be better thought
out legally. This is a good start article.
[ Reply to This | # ]
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| Authored by: NZheretic on Thursday, August 05 2004 @ 08:55 AM EDT |
| From a 2002
post of mine
From The
Relevance of Adam Smith [frb.org] by Robert L. Hetzel.
With added
commentary by yours truly...
MONOPOLY AND GOVERNMENT
SUBSIDIES: The principal theme set forth in The Wealth of
Nations
is that a country most effectively promotes its own wealth by
providing
a framework of laws that leaves individuals free to pursue the
interest
they have in their own economic betterment. This
self-interest
motivates individuals? propensity to truck, barter, and exchange
one
thing for another and thereby leads them to meet the needs of others
through
voluntary cooperation in the market place:
...man has
almost constant
occasion for the help of his brethren, and it is in vain for him
to
expect it from their benevolence only. He will be more likely to
prevail if
he can interest their self-love in his favour, and shew them
that it is for
their own advantage to do for him what he requires of
them. Whoever offers to
another a bargain of any kind, proposes to do
this. Give me that which I want,
and you shall have this which you
want, is the meaning of every such offer; and
it is in this manner that
we obtain from one another the far greater part of
those good offices
which we stand in need of. It is not from the benevolence of
the
butcher, the brewer, or the baker, that we expect our dinner, but from
their
regard to their own interest. We address ourselves, not to their
humanity but to
their self-love, and never talk to them of our own
necessities but of their
advantages. (p. 14)
Everyone
realises and acknowledges that Microsoft is a business, there
to make a profit
to share with it's marjor stakeholders, from it's
shareholders to it's
employees. However ...
Smith also argues that the harmony
between private goals
and larger socially desirable goals promoted by voluntary
cooperation
between individuals in the market place is interfered with by
monopoly
and government subsidies. In contrast to competition, monopoly
and
government subsidies cause individuals to devote either too few or too
many
resources to particular markets:
....the
private
interests and passions of individuals naturally dispose them to
turn
their stock towards the employments which in ordinary cases are
most
advantageous to the society. But if from this natural preference
they
should turn too much of it towards those employments, the fall of
profit in
them and the rise of it in all others immediately dispose
them to alter this
faulty distribution. Without any intervention of
law, therefore, the private
interests and passions of men naturally
lead to divide and distribute the stock
of every society, among all the
different employments carried on in it, as
nearly as possible in the
proportion which is most agreeable to the interest of
the whole society.
All the different regulations of the mercantile
system, necessarily
derange more or less this natural and most advantageous
distribution of
stock. (pp. 594-5)
Every derangement of the
natural distribution of stock is
necessarily hurtful to the society in which it
takes place; whether it
be by repelling from a particular trade the stock which
would otherwise
go to it, or by attracting towards a particular trade that which
would
not otherwise come to it. (p. 597)
.... sometimes,
because of the overiding profit motive, the end consumer
can be put at
a disadvantage, and the natural model can become unbalanced. This
often
happens in tha case of several types of monopoly...
Smith
describes the actions of monopolists as follows:
The
monopolists, by keeping the market constantly under-stocked, by
never fully
supplying the effectual demand, sell their commodities much
above the natural
price, and raise their emoluments, whether they
consist in wages or profit,
greatly above their natural rate. (p. 61)
The
natural price is the lowest which the sellers can commonly afford
to take, and
at the same time continue their business. (p. 61) Today we
would use the word
competitive for natural. The effectual demand is the
demand of those who are
willing to pay the natural price of the
commodity. (p. 56) Monopoly, as well as
a governmentally subsidized
activity, contrasts with a competitive market where
a commodity
is...sold precisely for what it is worth, or for what it really
costs
the person who brings it to market. (p. 55)
The Wealth of
Nations contains three general kinds of
criticism of monopolies. The
first is that the higher prices in a
monopolized market reduce the welfare of
consumers:
If...capital is divided
between two different grocers, their
competition will tend to make both of them
sell cheaper, than if it
were in the hands of one only; and if it were divided
among twenty,
their competition would be just so much the greater, and the
chance of
their combining together, in order to raise the price, just so much
the
less. Their competition might perhaps ruin some of themselves; but to
take
care of this is the business of the parties concerned, and it may
safely be
trusted to their discretion. It can never hurt either the
consumer, or the
producer; on the contrary, it must tend to make the
retailers both sell cheaper
and buy dearer, than if the whole trade was
monopolized by one or two
persons. (pp. 342-3)
In every country it always is and must be the
interest of the great
body of the people to buy whatever they want of those who
sell it
cheapest. The proposition is so very manifest, that it seems
ridiculous
to take any pains to prove it; nor could it ever have been called
in
question, had not the interest sophistry of merchants and
manufacturers
confounded the common sense of mankind. Their interest is, in
this
respect, directly opposite to that of the great body of the people. As
it
is the interest of the freemen of a corporation to hinder the rest
of the
inhabitants from employing any workmen but themselves, so it is
the interest of
the merchants and manufacturers of every country to
secure to themselves the
monopoly of the home market. (p. 461)
.... like deals made between vendors to set prices, which RAND
"reasonable" licensing systems effectively does.
The
second criticism of monopoly is that it engenders inefficient
management:
Monopoly...is a great enemy to good
management, which can never be
universally established but in consequence of
that free and universal
competition which forces everybody to have recourse to
it for the sake
of self-defence. (p. 147)
For example, Microsoft's Internet Explorer containscurrently 20 unpatched
vulnerabilities
[pivx.com], a disproportionately high number in comparison
to all the
other browers on the market today. Also, because of a general
disregard
for security in the past, many of those same vulnerabilities
are
exploitable though other Microsoft applications.
The third
criticism of monopoly is that it is inequitable
because it increases arbitrarily
the inequality in individuals? incomes:
...The policy
of Europe
occasions a very important inequality in the whole of the
advantages
and disadvantages of the different employments of labour and stock,
by
restraining the competition in some employments to a smaller number
than
might otherwise be disposed to enter into them. (pp.
118-19)
And there is many a CIO
discovering that the new Microsoft enterprise licensing agreement is far more
expensive than before.
Monopoly has always been a
contentious issue in debates on public
policy in the United States. It is
interesting to examine the way in
which the ideas of Smith appear in current
debates over monopoly. In
general, proponents of government intervention in the
market place
argue that monopoly is endemic in capitalism and that its
elimination
requires significant intervention by the government in the
market
place. An opposing group argues that free markets effectively
restrain
monopoly power and that it is in fact government intervention in
the
market place that is chiefly responsible for monopoly. The first
group
assumes that large size, fewness of firms, and operation over an
extensive
geographic area automatically imply monopoly power and thus
supports its
position by citing the existence of industries dominated
by a few large firms
and the existence of multinational corporations.
The opposing group supports its
position by trying to show that where
monopoly power exists it is made possible
by particular governmental
actions, e.g., in the United States by marketing
orders that fix the
price of milk above what it would be otherwise, or FCC
regulations
restricting the growth of cable TV, thereby preventing competition
with
the established networks.
The view of the world suggested in
The Wealth of Nations
is that monopoly power cannot persist
without the assistance of
government. The specific examples of monopoly that
Adam Smith attacked
required the police power of the state for their
maintenance. These
monopolies were of three kinds. One kind of monopoly depended
upon the
mercantilistic system of laws which England used to monopolize
trade
with its colonies: Monopoly of one kind or another, indeed, seems to
be
the sole engine of the mercantile system. (p. 595) Another kind arose
from
the monopoly power granted guilds (referred to by Smith as
corporations), which
allowed them exclusive rights to produce a given
commodity:
The exclusive privilege of an incorporated trade necessarily
restrains
the competition, in the town where it is established, to
those who are free of
the trade. To have served an apprenticeship in
the town, under a master properly
qualified, is commonly the necessary
requisite for obtaining this freedom. The
bye-laws of the corporation
regulate sometimes the number of apprentices which
any master is
allowed to have, and almost always the number of years which
each
apprentice is obliged to serve. The intention of both regulations is
to
restrain the competition to a much smaller number than might otherwise
be
disposed to enter into the trade. The limitation of the number of
apprentices
restrains it directly. A long term of apprenticeship
restrains it more
indirectly, but as effectually, by increasing the
expence of education.
(p. 119)
The government of towns corporate was altogether in the hands
of
traders and artificers; and it was the manifest interest of every
particular
class of them, to prevent the market from being overstocked,
as they commonly
express it, with their own particular species of
industry; which is in reality
to keep it always understocked. (p. 124)
A final
kind of monopoly depended upon tariffs and quotas that
prevented foreign
producers from competing with domestic producers:
The superiority which the industry of the towns has every-where
in
Europe over that of the country, is not altogether owing to
corporations and
corporation laws. It is supported by many other
regulations. The high duties
upon foreign manufactures and upon all
goods imported by alien merchants, all
tend to the same purpose.
Corporation laws enable the inhabitants of towns to
raise their prices,
without fearing to be under-sold by the free competition of
their own
countrymen. Those other regulations secure them equally against that
of
foreigners. (p. 127)
Competitive markets
restrain monopoly because the above-average profits
associated with the exercise
of monopoly power attract new producers
who increase output and thereby lower
prices:
When by an increase in the effectual demand,
the market price of
some particular commodity happens to rise a good deal above
the natural
price, those who employ their stocks in supplying that market
are
generally careful to conceal this change. If it was commonly known,
their
great profit would tempt so many new rivals to employ their
stocks in the same
way, that, the effectual demand being fully
supplied, the market price would
soon be reduced to the natural
price.... Secrets of this kind, however, it must
be acknowledged, can
seldom be long kept; and the extraordinary profit can last
very little
longer than they are kept. (p. 60)
The next section is very
IMPORTANT.
Monopolists can preserve their favorable
position only if
the government prevents potential competitors from entering
the
monopolized activity:
The exclusive
privileges of corporations, statutes of apprenticeship,
and all those laws which
restrain, in particular employments, the
competition to a smaller number than
might otherwise go into them, have
the same tendency...They...may frequently,
for ages together, and in
whole classes of employments, keep up the market price
of particular
commodities above the natural price, and maintain both the wages
of the
labour and the profits of the stock employed about them somewhat
above
their natural rate.
Such enhancements of the market price may last
as long as the regulations of police which give occasion to them. (pp.
61-2)
In fact, the term "intellectual
property" is a misnomer, a more correct term would be intellectual
monopoly.
Patents, Copyrights and even Trademarks are a government
granted
monopoly, they do not occur naturally. That does not mean that they
are
a bad thing per-say, but their use should be dictated by the benefit
to
socitety in general, with approprate limits so their use cannot
be
abused.
These statutes give the power that the ol' Mercantile laws
gave
to those monopolies. There is no true effective choice in the
market. Compainies
like Microsoft are sustaining it's dominate position
in the markerplace by using
a state-constructed and granted monopoly,
which gives Microsoft the monopoly over it's
protocols [microsoft.com], effectively just as restrictive as the East India
Trading Company trading zone monopoly of the Orient.
Free
markets make the formation of monopoly difficult
because monopoly requires the
adherence of all actual and potential
sellers in a market. Self-interest makes
achievement of such adherence
difficult because each seller has an incentive to
undercut the monopoly
price in order to increase his share of the market.
Monopoly power is
increased or made possible if enforced by the government. In
the
following passage Smith refers to the guilds, or corporations, of
his
day:
An incorporation...makes the act of
the majority binding upon the
whole. In a free trade an effectual combination
cannot be established
but by the unanimous consent of every single trader, and
it cannot last
longer than every single trader continues of the same mind.
The
majority of a corporation can enact a bye-law with proper penalties,
which
will limit the competition more effectually and more durably than
any voluntary
combination whatever. (p. 129)
Smith's ideas
appear in current public debate over monopoly. Advocates
of deregulating the
transportation and communications industries by
eliminating or reducing the
power of Federal regulatory agencies argue
that these agencies promote monopoly
by limiting the entry of new firms
and by fixing prices for all producers.
Government regulations enforced
upon all firms in an industry have the effect of
allowing producers to
eliminate competition and to raise prices. At the same
time, lack of
competition reduces incentives for efficient
production.
[ Reply to This | # ]
|
| |
| Authored by: NZheretic on Thursday, August 05 2004 @ 09:03 AM EDT |
| Business methord and software patents are detrimental to the software industry
as a whole, but it is also one of the major driving forces to an interesting
trend amongst most of the major IT vendors. Applying game theory to long term
software industry market, for both open and proprietary vendors, based on
software patents... 1) Small software developers are unlikely to
benefit from the overall balance of payments from licensing of their own and
other vendors software patent portfolios, since other software vendors are just
as likely to hold other software patents that the developer uses in his own
products.2) Larger software vendors are unlikely to benefit from payments
from licensing of their software patent portfolio, as per above small sofware
developers plus the software vendor is likely to hold the lion's share of the
sofware target market, profit from software patent licensing will be much
smaller in proportion to the overall sales of the vendors own products. 3)
Third party intellectual property "holding companies", that do not actively
participate in selling actual software, are the only class of organization that
can benefit from licensing of their software patent portfolios. In most cases
these entities have a very tenuous relationship to the ongoing development of
the software methords patented. Software and business methord
patents do not promote the art and ongoing development of the entire software
industry.
In 1981 US courts ruled that software and business
methord could,
without legislation ot the contrary, be patented. From
1981 to 1989, with a few
exceptions the entire IT industry just ignored
the issue of software
patents.
Challenges and Strategy -Bill Gates Email Memo 1991
http://www.theworld.com/obi/Bill.Gates/Challenges.
and.Strategy [theworld.com]
Category 3
----------
This is a category of challenges we face that I don't
feel are widely recognized.
PATENTS: If people had understood how patents
would be
granted when most of today's ideas were invented, and had taken
out
patents, the industry would be at a complete standstill today. I
feel
certain that some large company will patent some obvious thing related
to
interface, object orientation, algorithm, application extension or
other crucial
technique. If we assume this company has no need of any
of our patents then the
have a 17-year right to take as much of our
profits as they want. The solution
to this is patent exchanges with
large companies and patenting as much as we
can. Amazingly we havn't
done any patent exchanges tha I am aware of. Amazingly
we havn't found
a way to use our licensing position to avoid having our own
customers
cause patent problems for us. I know these aren't simply problems
but
they deserve more effort by both Legal and other groups. For example we
need
to do a patent exchange with HP as part of our new relationship.
In many
application categories straighforward thinking ahead allows you
to come up with
patentable ideas. A recent paper from the League for
Programming Freedom
(available from the Legal department) explains some
problems with the way
patents are applied to software.
The 1991 paper from The League
for Programming Freedom can be found here
http://lpf.ai.mit.edu/ [mit.edu]
As Bill Gates rightly
stated " If people had understood
how patents would be granted when most of
today's ideas were invented,
and had taken out patents, the industry would be at
a complete
standstill today". The Silicon valley revolution would not have
taken
place. From 1991 to 1997, the major software vendors slowly began
build
software patent portfolios and entering into cross licensing
arrangements
and most of the smaller vendors still ignored the issue
entirely.
From
1997 on, driven by the greed of the Venture
capitalists of the DotCom era,
vendors and other groups began gobbling
up businesses based not upon the current
business viability, but the
so-called intellectual property the business held.
Most in the software
industry still ignored these third party parasites, but
larger vendor
also began expanding their software patent
portfolios.
Complex cross licensing arangements are
increasingly
becoming a legal quagmire. Microsoft is facing a number of
lawsuits
from companies which Microsoft did enter into a formal
relationship,
for example Timeline Inc
http://www.theregister.co.uk/content/53/29419.html
[theregister.co.uk]
The SCO Group is also suing IBM based upon the
exact
same class of legal cross licensing relationship that Bill Gates
suggested
as a solution to patents back in 1991.
However
While software
patents remain a
threat to the entire software industry, including Linux, the
patent
issue is pushing many companies, including IBM, HP, SUN, Oracle, SAP
and
Novell are turning to a simpler form of cross licensing arrangement
- the GNU
General Public License, or GPL and LGPL.
Only GPL and LGPL like
so-called "viral" licenses
effectively grants all downstream users the right to
freely use the
sofware. A license that even the largest of patent portfolio
holders,
such as IBM, are adopting to collaboratively develop new
software.
This, along with customer demand, is the major reason that Linux
is
being widely adopted and not one or more of the BSD based
distributions.
[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, August 05 2004 @ 09:05 AM EDT |
http://www.vnunet.com/news/1157113
"Chris Sontag, senior vice president and general manager of the SCOsource
division, said that the company is working on providing an SCO Linux licence
bundled with its OpenServer and UnixWare operating systems."
""If you chose to run a Linux application, and you [had] a licence for
the most recent version of UnixWare, then you can do that," he said at the
SCO Forum event in Las Vegas."
This once again implies that every Linux program infringes their claimed rights.
Not just the Linux kernel.
One wonders if the SCO Linux license is indeed needed to run Apache and Samba on
Unixware.
This is what the above statement imlpies.
They will continue these attacks and mis-statements until the are prohibited
from doing so.
[ Reply to This | # ]
|
| |
| Authored by: OmniGeek on Thursday, August 05 2004 @ 09:16 AM EDT |
It would be useful if we could get our Congresscritters (or more practically,
their staffs, who actually do all the reading anyway) to read this and
understand that we feel strongly about this issue and want them to Do The Right
Thing here (and that we'll vote accordingly). I plan to send mine a hardcopy
with a brief cover letter. If the staff only read the cover letter, something is
still accomplished.
---
My strength is as the strength of ten men, for I am wired to the eyeballs on
espresso.[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, August 05 2004 @ 09:37 AM EDT |
I understand the current USPTO practices are not optimal, and we have to find a
way to change them, but what Terpstra (and everyone fighting to abolish patents
completely) is arguing is of grave concern.
Imagine if you, for example, were the inventor of a revolutionary new mode of
transportation... with an investment of $200M you were able to develop the
flying tricycle and make it 80x more efficient than Mom's SUV. You've done all
the work, including all the failed prototypes and testing, and now are ready to
sell the product. John Doe purchases your first car, reverse engineers it, and
sells a cheaper version for significantly less (something that is protected in
patent laws today). This forces you and John into a price war over consumers,
but the thin margins will never allow you to recover your initial investment.
Sure, it's a great win for consumers because they get it cheaper due to the
price war. But how willing are you to invest $200M if you're not going to be
able to get out of it what you've invested? No amount of saying "it's the
right thing for society" is going to put food on the table.
The abolishment of patent laws in their entirety will only serve to restrict
innovation for major new technologies. A better method is refining the patents
associated with software and algorithms. There _has_ to be a method of
protecting investment, or those with the money to invest and develop technology
will simply not do it. In the end, software may still come out okay (there are
plenty of college programmers cutting their teeth on new ideas), but the big
investments in hardware and requiring lots of capital won't happen...
Would Boeing spend billions of dollars developing a new aircraft if it can be
ripped off the next day and undercut by someone looking to take advantage of
that investment?
PS - Before I'm branded an apologist, I'm not -- I'm actually in favor of patent
reform that would eliminate the underhanded tactics of companies who seek to
destroy competition entirely; however, it needs to be done in a way that
protects other investments, considering that there generally are only a few ways
to accomplish something in software.[ Reply to This | # ]
|
- Reflections on Intellectual Property Rights, by John H Terpstra - Authored by: Anonymous on Thursday, August 05 2004 @ 09:43 AM EDT
- Reflections on Intellectual Property Rights, by John H Terpstra - Authored by: jesse on Thursday, August 05 2004 @ 10:40 AM EDT
- Reflections on Intellectual Property Rights, by John H Terpstra - Authored by: Anonymous on Thursday, August 05 2004 @ 11:16 AM EDT
- If stories about witches were patented we would have no HARRY POTTER! - Authored by: Anonymous on Thursday, August 05 2004 @ 12:14 PM EDT
- Reflections on Intellectual Property Rights, by John H Terpstra - Authored by: Anonymous on Thursday, August 05 2004 @ 12:22 PM EDT
- Reflections on Intellectual Property Rights, by John H Terpstra - Authored by: Anonymous on Thursday, August 05 2004 @ 02:20 PM EDT
- Reflections on Intellectual Property Rights, by John H Terpstra - Authored by: Philip Stephens on Thursday, August 05 2004 @ 02:36 PM EDT
- Reflections on Intellectual Property Rights, by John H Terpstra - Authored by: mikera on Thursday, August 05 2004 @ 03:42 PM EDT
- You are missing the point - Authored by: dlrapp on Thursday, August 05 2004 @ 05:23 PM EDT
- Tell me no more that innovation depends on patents - Authored by: ihawk on Thursday, August 05 2004 @ 06:02 PM EDT
- You missed the point like so many others - Authored by: Anonymous on Thursday, August 05 2004 @ 06:03 PM EDT
- Reflections on Intellectual Property Rights, by John H Terpstra - Authored by: ujay on Thursday, August 05 2004 @ 06:48 PM EDT
- Reflections on Intellectual Property Rights, by John H Terpstra - Authored by: Anonymous on Thursday, August 05 2004 @ 07:43 PM EDT
- Reflections on Intellectual Property Rights, by John H Terpstra - Authored by: StNuke on Friday, August 06 2004 @ 08:30 AM EDT
| |
| Authored by: leopardi on Thursday, August 05 2004 @ 09:50 AM EDT |
| Has anyone noticed that US patent law is being debated in
Australia as a result
of the
Australian Senate debate on the Australia-US Free
Trade Agreement?
[ Reply to This | # ]
|
| |
| Authored by: sphealey on Thursday, August 05 2004 @ 09:57 AM EDT |
If you are reading this essay and are a US Citizen, you might think about
sending John Kerry a polite letter outlining some of your concerns in this area
and asking what his positions are. Followed by a polite response if you have
any disagreements with his positions.
Unfortunately (or fortunately), you can no longer attach a check for $10 to your
letter as the deadline for private contributions has passed.
[If you prefer to correspond with Mr. Bush that is fine too but I think the Bush
Administration's positions in this area are well known by now]
sPh[ Reply to This | # ]
|
| |
| Authored by: clark_kent on Thursday, August 05 2004 @ 09:57 AM EDT |
"There was structure and order in the old world. Foundation priorities
expressed in older literature held that foremost in priority is the Supreme
Being who endows us with inalienable rights and to whom total subservience is
due. The Constitution of the United States of America reflects such ideals. To
such as held this view, second in priority is one's own family, and third in
importance is one's fellow man out of which emerges a great social
responsibility."
My Dad worked at a steel mill for 42 years. My Dad was influenced by this
"old world" thinking. Some of "old world thinking" was bad,
however other parts of it were very good, especially the parts that looked at
the long term, as in thinking ahead for generations upon generations of people
to come. Now I think a majority of the people of the US are struggling past a
few years, in planning, finances, spiritual matters, physical well-being. I
think we, as a nation, are getting snowballed by people wanting to take
advantage for their own selfish purposes, and they use weaknesses in our
government to push their influence, especially with the likes of Microsoft. But
Microsoft is not the only company doing it. There are many, in other markets.
And it is not that we have never had these opportunist types. But they are able
to stay around longer and have a larger influence. I think our weakness shows in
our lack of understanding who this "Supreme Being." Our laws reflect
our Christian heritage. And I am not talking about the bad things done in the
name of Christ. I am talking about things like the defeat of slavery, equal
opportunity, and anti-trust law. Our laws are there to protect us. But it takes
people willing to sacrifice to stand for the Truth and fight against the ones
willing to take those freedoms away. And some of those people whom we place this
vaulable trust of the United States take advantage and become self serving in
their posts. It is about our focus on what is really Truth, and what is
everything else. United we stand, divided we fall. Plain and simple.
I hope I do not offend anyone religiously. However, I believe I am only stating
the facts. Let each belief stand on it's own merits as well as my own words.
[ Reply to This | # ]
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| Authored by: AndyC on Thursday, August 05 2004 @ 09:58 AM EDT |
Not another buyback by SCOX to inflate their share price?!?
($5.08 at 09:42)[ Reply to This | # ]
|
| |
| Authored by: tz on Thursday, August 05 2004 @ 11:07 AM EDT |
The overlooked issue is the "ends". What ultimate goal does the IP
framework serve? Corporate welfare queens? Or to promote the distribution of
knowledge and learning and invention?
The founding fathers didn't create freedom for (excuse the pun) license. It was
for fair competition.
In many libertarian debates, they have no idea of opensource as a third way
between government and the market or corporations (or worse, and alliance
between the two).
I think a lot of drugs, health care, and other biology could be done along the
Free and Open IP model and solve a lot of the problems - not all, but those
where the market might be too small. (Lorenzo's oil?).
[ Reply to This | # ]
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| Authored by: John M. Horn on Thursday, August 05 2004 @ 11:09 AM EDT |
Geez! This is one of the most momentous documents ever posted by PJ. Even some
of the subsequent posts by readers are sage and informative.
The email by BG is also very insightful. In a nutshell, he identifies the
genesis of the patent attack plan against Linux before he knew Linux existed and
at a time when Linus Torvalds was still contemplating the first primitive kernel
and long before Linux was known to the rest of the world.
I have MUST cut and paste John's article and some of the posts just as a future
reminder for me.
Excellent article Mr. Terpstra!
Good work, as always PJ!!!
John Horn
[ Reply to This | # ]
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| Authored by: Anonymous on Thursday, August 05 2004 @ 11:30 AM EDT |
Hearing for SCO's motion to compel, set 10:00 9/2/0 before Magistrate Judge
wells (IBM 211)
IBM's opposition memo (Presumably IBM 212?) should be filed by now
Anybody got a copy? Frank? Al Petrosky (spelling? sorry)? Anybody? Please post
a link if you have it
Thanks in advance
Quatermass IANAL IMHO etc[ Reply to This | # ]
|
| |
| Authored by: Anonymous on Thursday, August 05 2004 @ 11:33 AM EDT |
Did all of you miss this nugget by Bill Gates?
'In many application categories straighforward thinking ahead allows you to come
up with patentable ideas.'
That is, of course, almost verbatim against the wording of what *should* be
patentable.
35 U.S.C. 103 Conditions for patentability; non-obvious subject matter. (a) A
patent may not be obtained though the invention is not identically disclosed or
described as set forth in section 102 of this title, if the differences between
the subject matter sought to be patented and the prior art are such that the
subject matter as a whole would have been obvious at the time the invention was
made to a person having ordinary skill in the art to which said subject matter
pertains.
So, tell me again: how is something which requires only "straighforward
thinking" not "obvious to a person etc."?
It's a pretty clear admission that people out there are gaming the system by
cramming in applications to the USPTO they know *quite well* should not be
patentable (as some "straightforward thinking" is all that is required
to come up with the "patentable" idea), and expecting the USPTO to
drop the ball...
[ Reply to This | # ]
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| Authored by: Anonymous on Thursday, August 05 2004 @ 11:49 AM EDT |
This makes a good question, as it seems that the right to create is being
limited or taken out of the hands of the greater number. I see one greater
impact for the future, that is people being sealed into jobs within a small
handfull of companies & corporations, the library systems will be nothing
more then small limited sources of what one is allowed to read about. What
happens to small business, what happens to people that cannot get one of the few
jobs. As the U.S. and maybe the rest of the world work on a small future for
nothing more then works that 100 years from now will be old books and devices
people will look at and maybe say "they destroyed themselves daddy ?".[ Reply to This | # ]
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| Authored by: Anonymous on Thursday, August 05 2004 @ 12:13 PM EDT |
The patent laws require (among other things) that an invention be truly new and
not obvious. Inventors are required to perform due diligence on these two points
and so swear under oath.
The problem is that inventors lie. They do not perform due diligence in
inspecting the prior art and they fail to test their invention as to being
obvious. They then swear to the contrary under oath. Unless and until there are
mechanisms in place to only patent things and methods that are truly new and
truly not obvious such abuses will continue.
One suggestion is to require inventors to assume liability for their failures as
such abuses are not much different from common thievery.
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| Authored by: Hyrion on Thursday, August 05 2004 @ 12:23 PM EDT |
Reading this brings to mind a question I like to ask people. As a quick
side-note, I've only read the first couple paragraphs. The question
is:
Which is more important, the society or the
individual?
It's kind of a trick question. When people hear
that question, they jump to the conclusion there's only two answers and so
choose among them.
- The society is more important.
- The
individual is more important.
There is, of course, a third
answer.
Neither is more important then the
other.
My line of reasoning is pretty
simple:
Without the individual you don't have a society. Without
the society the individual looses strength.
In my beliefs, Just
laws and Ethical activities are those that have a balance to protect both.
Anything created or done that protects one at the cost of the other should
probably be re-examined. The end result when you disrupt the balance that both
are equally, highly important is that you end up damaging everything. That
includes harming yourself and those around you including loved ones.
Just
some beliefs I hold that I share with those willing to consider
them.
---
There are many kinds of dreams. All can be reached if a
person chooses. - RS [ Reply to This | # ]
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| Authored by: RDH on Thursday, August 05 2004 @ 12:48 PM EDT |
| Mr. Terpstra wrote:
"There was structure and order in the old world.
Foundation priorities expressed in older literature held that foremost in
priority is the Supreme Being who endows us with inalienable rights and to whom
total subservience is due. The Constitution of the United States of America
reflects such ideals. To such as held this view, second in priority is one's own
family, and third in importance is one's fellow man out of which emerges a great
social responsibility."
The Constitution of The United States reflects
no such views as claimed above. The vast majority of the Founding Fathers were
deists believing a Supreme Being was a distant and detached creator. This
country was not founded on a set of religious beliefs: it was founded on the
concept that there is an explicit and implicit social contract that exists
between the people and the government. Please remember the phrase:
"...[D]eriving its {ed.: the goverment's} just powers from the consent of the
governed." The desire to insert a greater sense of importance for religion in
the civic arena, especially Christianity (and this is not entirely a slam), is
wholly eroneous and in contradiction of historical fact. The Founding Fathers
would have shuddered at the mere thought.
Anyay, the issue with patents and
copyrights is that it now threatens the social contract instead of upholding it.
These are now being used as a means to squelch the common good by intefering
with innovation. The dead, white males who gave rise to this country would
groan at the use of copyrights and patents for such a purpose. It is almost
entirely the exact opposite of what they intended.
- RDH
"Question
authority since it is always in question." [ Reply to This | # ]
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| Authored by: Anonymous on Thursday, August 05 2004 @ 12:52 PM EDT |
The USPO (and others) allows patents on the simple and "obvious". And
they have no simple way of correcting their mistake.
This problem is not unique to software.
What can we really do?
1. Educate patent examiners - and pay for more of them. Write to your
representive and point out the problems.
2. Suggest a simple method to challenge patents - free if someone has been
accused of infringement. It should always be the first step.
3. Stop asking for the "abolition of patents". You will be ignored as
crazy people.
The problem is simple: people are greedy.
The solution is hard and problematic, but continual work on the above will
improve things.
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| Authored by: Brian S. on Thursday, August 05 2004 @ 01:23 PM EDT |
Why do I get the feeling from both the editorial and comment sections of the
last two articles that at last the real enemies of F/OSS are being identified
and spoken about.
I know the SCOG court cases will keep us entertained for
months to come.
There have always been rumblings and grumblings about M$ and
their intention. There have always been rumblings and grumblings about the
adverse effect of software patents.
Apart from some small asides, the vast majority of writers have made the real
battle M$ and patents v the world and F/OSS.
Brian S.[ Reply to This | # ]
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| Authored by: k9 on Thursday, August 05 2004 @ 01:46 PM EDT |
| In this excellent book, John Kay analyses corporate success in terms of three
"Distinctive Capabilities" (Architecture, Reputation, Innovation), and
"Strategic Assets". He regards strategic assets as fundamentally different from
the others, because it arises from market structure or regulation, rather than a
genuine distinction between firms.
He divides Strategic Assets into 3 types
:
- natural monopoly
- sunk cost barriers to entry
- licenses and
regulations
And then says "Strategic assets ... raise issues about
the proper conduct of business in ways which rarely arise when competitive
advantage is based on [the other factors]. When distinctive capability gives
rise to superior performance, the private gains ... will generally correspond to
equivalent gains for society as a whole.Where strategic advantages are derived
from legal privilege or market dominance, the equivalence of private profit and
public good may not follow." (op.cit., p.114)
Based on Kay's analysis,
the reason for the difference in behaviour of IBM and SCO is clear. IBM sees its
reputation as a crucial distinctive capability, and will deploy its strategic
assets in ways that enhance that. The "gift" of Cloudscape is a clear example.
On the other hand, by the time SCO embarked on its litigation program, its
reputation for many of the things that matter in the software industry was
pretty low.
The state is (or should be, anyway) concerned with public good,
and so intervenes both to limit the ill effects of structural strategic assets,
and to create them artifically where it is thought public good would flow
therefrom. All "IP" is an artificial strategic asset of this type.
Any
state-granted monopoly should be available only to the extent that it either
generates public good directly, or is needed to enable firms to use or
enhance their distinctive capabilities (thereby presumptively creating
public good indirectly). Thus, trademarks last for ever, because they provide
essential support to reputation and there is a clear public good in avoiding
market confusion. The public-private bargain over patents is a grant of limited
monopoly, in part on the presumption that the patentee will be able to use that
monopoly to enhance its other capabilities.
As the article said, clear
thinking on this sort of thing does not seem to be widespread amongst the
political classes. Just like the theory of comparative
advantage.
It is clear that SCO believe themselves right. Like
protectionists, they may have some success by making arguments which seem
intuitively plausible, and have emotive appeal, but are in fact mostly wrong. No
doubt this is why they want to be in front of a jury.
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| Authored by: Anonymous on Thursday, August 05 2004 @ 03:02 PM EDT |
I, myself, go back to a quote that was posted here a while back:
"I
hope the lawyers among you get my point: Citing precedent is necessary,
essential, and fundamental to the practice of law. Likewise, in the practice of
programming, "citing" code, algorithms, data structures, ideas, standards,
constants, design patterns, et cetera, is necessary, essential, and fundamental
to the practice of our profession. There is no code in existance today that does
not "cite" from previous work by another "owner". This includes (really!)
Microsoft DOS, Microsoft Windows/3.1, Microsoft Windows/95, Microsoft
Windows/NT, Microsoft Internet Explorer, Microsoft Office, Microsoft Exchange,
(all Microsoft products!) Linux, Minux, Unix, Multix, CTOS, IBM/VMS, VMS, Perl,
Java, Python, Lisp, C++, C, ... "
As listed UNIX infringes,
Winodows infringes.
I've been a code-pig for thirty some years, does that mean
that the high school I first learned FORTRAN in can sue my current employer
(State Gov't) for copyright infringment? Let's go up the line: The state owes
the contractor/Fed gov't which owes the privately held bank which owes the
county which owes the City which owes the University which owes the school
district....
I'm ready, bring on the lawyers, I'm still using concepts
that I learned in school.
wb
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| Authored by: Anonymous on Thursday, August 05 2004 @ 03:33 PM EDT |
It all sounded so reasonable until I got to the bit where he says:
The
entertainment industry could not ignore the fact of a few thousand letters
advising them that consumers will no longer purchase their wares under the
licensing terms provided. A one-month public moratorium on all purchases could
bring the industry to its knees!
Man, what have you been smoking?
If you think you can persuade 230,000,000 Americans to stop buying DVDs for a
whole month just to support your cause (however worthy), you have lost all
contact with reality. [ Reply to This | # ]
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| Authored by: mojotoad on Thursday, August 05 2004 @ 03:37 PM EDT |
| Hey PJ --
In an earlier story I'd asked if anyone had ever heard of the
analogy "boxing with waterfalls" before, or whether you'd coined the
phrase.
Coincidentally, I was just reading the (very funny) book Witches
Abroad by Terry Pratchett (one of the Discworld novels).
In it, Nanny
Ogg makes the statement "Might as well try to stamp out a flood."
Hah! By
the way, that is the same Ogg that was the inspiration for the open codec Ogg Vorbis. (Vorbis was a character from
another Discworld book, Small Gods).
Cheers,
Matt [ Reply to This | # ]
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| Authored by: Anonymous on Thursday, August 05 2004 @ 03:45 PM EDT |
Isn't most or all of the discovery considered confidential? SCO seems to be
publicly releasing IBM proprietary confidential information contained in emails
that they obtained through discovery. Is this allowed or is this a violation of
the rules of discovery?[ Reply to This | # ]
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| Authored by: Anonymous on Thursday, August 05 2004 @ 04:22 PM EDT |
If patent policy is about trying to encourage the production of new technology
that is beneficial to society as a whole, the scope/term of the patent (that is,
the monopoly granted) should be "sized" so that the present expected
value of the effort required to produce the technology earlier than it otherwise
would have been produced equals the marginal benefits produced by the
technology, considering, among other things, whether the technology was novel or
not inevitable and the amount of time necessary to commercialize and re-coupe
the research investment. The problems with the current US system are (i) that
it often errs when assessing novelity/evitability (biggest problem), (ii) from
what I understand of the US patent process, patents are granted based on rather
minimal evidence, with the enforcement of the patent being left to the
litigation stage -- such an arrangement is obviously to the disadvantage of
low-cost challengers such as FOSS, and (iii) the term of a patent (20 years) may
be too long for discounted present value analysis of the returns of
commercialization (I would guess that 95% or more of expected returns would be
realizeable within 10 years -- this was an argument used unsuccessfully by
Lessig in Elrdritch). Lobbying efforts should focus on these three issues
(novelity/evitability, procedural posture, and term).
Another point: American companies and the US government are advocating a
"strong" patent policy in the hope of prolonging their superior
position in the world, having achieved key technologies early, but having
outsourced the production of the technologies largely to Asia (that is, though
they can't produce the technologies any longer, they still own them). As a
short- to medium-term strategy this may make sense, but they are ignoring the
risk that Asian economies and companies, having acquired expertise via the
outsourcing (and being the primary producers and employers of scientists and
engineers), will be able to move up the technological pecking order to be the
primary producers of patentably ideas, and thus be the long-term beneficiaries
of US-advocated strong IP laws. Truly a tiger by the tail.[ Reply to This | # ]
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| Authored by: Anonymous on Thursday, August 05 2004 @ 05:57 PM EDT |
I don't think that limiting the abuse of priviledge is going to happen without
some sort of interventionism. The trick is getting the right balance. [ Reply to This | # ]
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| Authored by: jim Reiter on Thursday, August 05 2004 @ 06:30 PM EDT |
What we need is a review period, 3 - 6 months where the
public can inspect every new patent and file a response
regarding the proposed patent before it becomes issued.
Patents should not be issued with unresolved objections
outstanding. [ Reply to This | # ]
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| Authored by: Anonymous on Thursday, August 05 2004 @ 06:46 PM EDT |
People seem to think this article is great. I didn't find it so.
Even
if this article says things that are right, it seems
to me that it violates most
of the rules of effective communication.
It's hard to find the important points,
and the article does little to
summarize or bring things together so that the
reader has something
to grab onto and go away with (in terms of why IP can be a
bad
thing). The wording is overly "intellectual" to the point of being
mostly a
distraction. The article doesn't make points
and reinforce them - instead it
seems to take pride in trying to make
you guess where the writer is going at any
given point in time.
History is great, and we shouldn't ignore it, but
software patents
are inherently different enough from mousetraps that history
of
mousetraps /whatever really doesn't do a very good job of elucidating
what is
wrong with software patents.
If I were going off to fight the (anti)
intellectual property battle, this is
certainly not the piece of paper that I
would take with me to shore
up my case. The main consequence of trying to use
this paper in
such a battle, I think, would be to put everyone to
sleep.
Wally Bass [ Reply to This | # ]
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- As a call to action, very poorly written article, in my opinion - Authored by: Anonymous on Thursday, August 05 2004 @ 06:53 PM EDT
- As a call to action, very poorly written article, in my opinion - Authored by: ihawk on Thursday, August 05 2004 @ 08:55 PM EDT
- As a call to action, very poorly written article, in my opinion - Authored by: Anonymous on Thursday, August 05 2004 @ 09:38 PM EDT
- really? - Authored by: Anonymous on Friday, August 06 2004 @ 01:36 AM EDT
- As a call to action, very poorly written article, in my opinion - Authored by: Nick on Thursday, August 05 2004 @ 11:21 PM EDT
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| Authored by: BitOBear on Thursday, August 05 2004 @ 10:22 PM EDT |
Software is different because it is new. This is not homily (sp?). In the
physical world of physical patents _absolutely_ _everybody_ knows what a wheel
is, what a pully is, what an incline plain is; how you cannot patent the
"block and tackle". That is, every human being knows (to wihtin some
limit) what *CLEARLY* cannot be patented.
What we have people patenting in the software regions are things like:
-- Going into a merchant with whom you have an established relationship,
selecting an item from a shelf, saying "put it on my tab" and then
leaving. This is what the "One-Click Shopping" patent is by analogy.
-- Using a block-and-tackle system to lift a Piano (instead of lifing any other
thing). This is the AT&T "Backing Store" patent, which is a patent
on using regular memory keep a copy of regular memory, so that that memory can
be restored later. The thing that made this "novel" was not the act of
remembering, but the act of remembering "what happened to be on the screen
before a popup window was popped up" so that the window could be popped
down. I saw this technique used by junior-high school students using TRS-80's in
1978. The patent was issued in 1985.
-- Calling someone down in records and asking them to look someting up for you.
This is any number of "client server software" patents. You actually
see a lot of these. People who arn't patenting their database or their
application, but instead patenting the application using client-server models to
communicate between the two elements.
It just goes on an on.
So the first "difference" with software compared to real world patents
is that the things that absolutely anybody would laugh out of the patent
applications "in the real world" but which are getting through
"in the software world" because they are hidden in expansive
verbiage.
And don't get me wrong, this happens in the "real world" too, just not
as often. Not to long ago some guy got an "idea patent" in Austrilia
for... get this... the wheel. He'd just packed it so full of melarky that it
slipped by. you know, (not a quote from the patent) "a means by which
contact forces and impacts cause by interraction with an uneven surface can be
directed through a mesh to a central structural support such that..." (e.g.
legaleze bullshit. 8-)
The second way Software is different is that none of the software can make the
parts of the computer do things that the parts cannot do by design.
Look at the old DesqView (sp?) patents from the mid eighties. These were patents
on using the virtual memory support built into the 286 and 386 to intercept the
direct-to-screen writes common in the IBM-PC programs of the era. There wasn't
anything particularly amazing about doing this, even if they were the first to
do it. See, the brand-new chips let you virtualize any type of memory, and the
screen memory was memory, and the programs were doing memory access...
We already know that, for instance, you cannot patent taking two parts that work
a cerian way and placing them together to continue working in that ceritan way.
Any yet, here is this patent.
Really, think about it:
A means by which a sewing machine, with automatic embroidary functions that
include flower paterns, is employed to repeatedly embroider flowers onto an item
of clothing such that the resulting pattern of embroidered flowers will cause
enjoyment and contentment in the viewer...
A means of applying paint to canvas with a brush or sprayer in a pattern of
repeating flowers such that the resulting pattern...
etc...
not patentable...
The third and final reason that software isn't patentable is that everything you
do on a computer you already do in real life. A computer, by means of its
software, automates repetitive tasks. It is a giant adding machine. And just as
an adding machine is patentable, the people who make the real live physical
parts of your computer enjoy patent protection on thoese parts. The software is
just a spesific use of those parts.
What if accountants held patents on tallying balance sheets?
You could go out and buy the adding machine, but you wouldn't be able to apply
that machine to your business without the express permission of a local
accountant. Not even as a trial run before getting the real certified accountant
to do the real work. You would be enjoined, without a licence, from tallying up
some rough costs on a napkin when discussing a possible new venture with a
prospective partner BECASUE THE ACCOUNTANTS OWN THE EXCLUSIVE MONOPOLY ON ADDING
UP.
That is what is happening with software patents. The "software
companies" *OWN*, not a copyright on the software that you happen to have
bought form them, but *THE* *ACTUAL* *AND* *ENTIRE* *CONCEPT* of "the
spread-sheet" or "one click shopping" or "indexing a
file" (yes, as in the computer equivalent of the little paper tabs on a
folded up piece of cardboard containing memos or whatever) and can ENJOIN YOU
from doing things you already know how to do because you DARE to do it with the
assistance of a machine.
Software Copyright, as in "I wrote it, you pay me for it, or write your
onw" is ok.
Software Patents, as in "I thought about writing it first even though I
didn't write it, so pay me if you want to write it yourself" is not.
Notice that we talk about "writing software" not "inventing
software"; we use "programming languages" and so on. Everything
about software is analogus to the art of writing and drawing, and is naturally
in the realm of Copyright. The Patent thing was started when the AT&T guys
patented "the set-uid bit" in UNIX, but you know what? They built a
piece of hardware and patented *taht*, as a lark.
And now we all burn.[ Reply to This | # ]
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| Authored by: Anonymous on Friday, August 06 2004 @ 07:13 AM EDT |
"There was structure and order in the old world. Foundation priorities
expressed in older literature held that foremost in priority is the Supreme
Being who endows us with inalienable rights and to whom total subservience is
due."
Actually the Founders were mostly not Christians and their concept of
"God" was that of "Nature as God".
Unless you were referring to societies preceding the Founding Fathers. The
context of the above statement was not clear.
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