"'The town stands by the LiMux initiative and its strategic decision in favour of open-source solutions,' the mayor said in a statement on the city council's website."

Their legal eagles have to evaluate the patent risk, and meanwhile, I gather a whole lotta politicking is going on to educate on the effect software patents will have on FOSS. The mayor says this:

"'It all depends from now on the European councils and businesses who are interested in open source: they must exert their influence on national governments and on the European authorities.'"

There can be no question that there is a growing awareness that patents can be deadly to innovation in software, and not just to FOSS. I was researching and I came across this submission [PDF] by Zenaan Harkness to the Senate Select Committee on the Free Trade Agreement between Australia and the United States of America.

Here are some snips from it, in which he talks about why patents and copyright laws, unless they are of very short duration, actually hinder innovation and progress in the software industry:

"To whom it may concern:

"I wish to express my grave concern as to the damaging potential to the software industry potentially caused by DMCA-like provisions, copyright extensions and software patents.

"The question to ask is do these foster local industry, and primarily small to medium sized companies, or do such laws, treaties and the like simply prop up existing monopolies that can otherwise no longer compete in today's economy - an economy where the barrier to entry is becoming very low, where an individual or small group can get out there and have a fair go. . . .

"There must be a balance between what society gives up in return for these legislative monopolies, and the supposed benefit that society gains from granting such monopolies. In the software world where the barrier to entry is so low, the grant of monopoly is in many if not all cases, simply a barrier to the learning and further expression of others. . . .

"The problems arise when the term of such monopolies lies well beyond the useful life of that which is created. In the computer software world, that life is very much shorter than in traditional 'media' - in the order of a few years at most. It is beyond any shadow of a doubt that, in the world of software and software development, that the monopolies so granted, due to their relatively huge duration, merely prohibit innovation. . . .

"Essentially, the periods of monopolies granted, if granted at all for software, must be extremely short if they are to benefit society as a whole, rather than simply prop up existing monopolistic companies and old-school business practices that cannot otherwise compete . . . "

The list of all the submissions is online but I found his particularly striking.

Here's another example of trying to educate on the subject of patents for software, this time in England back in 2000, when Edward Welbourne was asked, I gather by someone in the patent office, questions about patents on computer software and ways of doing business. He answered neither should be granted patents, and here are some reasons:

"One of the major phenomena of the present rapid-growth phase of my industry (software) is `incremental innovation' - where one player mimics another and adds some features - which is very vulnerable to `strategic' use of patents; large parts of the industry are already tangled in a web of mutual cross-licensing (which acts as a barrier to entry for new players in the industry) which it would be hard to distinguish from a cartel (had their lawyers not made sure to do the deals in some way definitely distinguishable (to the law, if not to the rest of us) from a cartel).

"I believe a *reduction* in the scope of patents would make it easier for me to do my job (not having to spend half my time looking over my shoulder to check whether I'm infringing a patent when I use my latest ingenious idea), provide consumers with greater choice, facilitate incremental innovation, open up a wider range of business models by which inventors could earn a living (e.g. consultancy, without having to argue about whether they or their client ends up owning the patents), reduce barriers to entry in a wide range of markets - hence encouraging competition, free enterprise and innovation, while serving consumers better. . . .

"Q7. If you have any experience of the US position on patenting software or business methods, how would you assess it?

"Limited experience only.

"The worst part of their system is that judgement of `non-obvious and original' has been slapdash and failed to take account of significant prior art; patents have been granted which are both obvious and blatantly derivative; whole businesses have been set up to exploit this state of affairs, thereby exacerbating it.

"The impact on my employers' business has tended to involve living with the risk that we might be unable to sell our products to folk in the U.S.A. . . .

"One final note: at present, such an enormous number of patents are being granted (especially in the U.S.A.) that it is utterly absurd to suggest that I can check whether a program I am writing (or any other kind of product I could develop) infringes some of them. Furthermore, in many cases, it is not possible to discover whether I infringe without actual litigation and a court ruling; and, even if I do not infringe, my ability to make a decent return in my investment in my program (or other product) is endangered by the prospect that my first-to-market lead will be obliterated by the period when I'm being prevented from trading by a court's injunctive relief for someone who *claims* I've infringed their patent. Where I cannot tell whether I am committing a crime, and where I am unable to prove a counter-suit for malicious prosecution when someone falsely claims I have committed a crime, the law causes exactly such trouble as it is meant to spare me.

"Patents create a climate of realistic fear for smaller players. They are not in any sense necessary for larger players to do well. Some form of scaling back of the scope of patents is needed."

Mr. Wellbourne has also written an essay on why software is different and particularly ill suited to patent protection, and here is a sample:

"First, I note that the reason generally given for providing patents is that they reward inventors, thereby stimulating innovation. In the software industry, there is no lack of innovation - indeed, our customers might with good cause beg us to slow the flood of innovation, which swamps the users of our products in permanent upheaval. Stimulating innovation in the software industry is unnecessary.

"Second, it suffices to examine the patents that the European patent office has been granting - such as the Amazon patent I allude to above, which would appear to cover a business method InterFlora have been using for decades - to see that the patent office is incapable of assessing whether a claimed innovation is indeed novel and non-obvious to practitioners in the relevant field of endeavour: the industry has no faith in the patent examiners' ability to assess these issues (and this applies to every patent office which has granted patents on software, some of which have been doing so for years - it is not just that the EPO's examiners are inexperienced). The essential cause of this is that the software industry is innovating so fast that it is impossible for an examiner to be well appraised of the state of the art - it is, indeed, hard even for full-time practitioners to keep up. Regardless of the reason, the inability of patent examiners to win the confidence of the industry is a material difference between software and those industries which are well-served by the patent system.

"The software industry, without any interference from the patent system, innovates at a break-neck pace: this makes patents both unnecessary and unworkable in the 'software as such' industry."

Here you have two men in the software business, each begging *not* to be "protected" by patents. Are they just starry-eyed idealists, who don't understand business? or have they seen something counterproductive about patents for software? Some MIT economists decided to take a look at the effect patents have on innovation and see if the rationale for granting patents has a reality base. Their paper, SEQUENTIAL INNOVATION, PATENTS, AND IMITATION, by James Bessen and Eric Maskin was published in 2000. I believe even SCO accepts the credentials of MIT. And here is what they concluded after their study:

"The standard economic rationale for patents is to protect potential innovators from imitation and thereby give them the incentive to incur the cost of innovation. Conventional wisdom holds that, unless would-be competitors are constrained from imitating an invention, the inventor may not reap enough profit to cover that cost. Thus, even if the social benefit of invention exceeds the cost, the potential innovator without patent protection may decide against innovating altogether.. . .

"In fact, the software industry in the United States was subjected to a revealing natural experiment in the 1980’s. Through a sequence of court decisions, patent protection for computer programs was significantly strengthened. We will show that, far from unleashing a flurry of new innovative activity, these stronger property rights ushered in a period of stagnant, if not declining, R&D among those industries and firms that patented most. We maintain, furthermore, that there was nothing paradoxical about this outcome. For industries like software or computers, there is actually good reason to believe that imitation promotes innovation and that strong patents (long patents of broad scope) inhibit it. Society might be well served if such industries had only limited intellectual property protection. Moreover, many firms might genuinely welcome competition and the prospect of being imitated. This is because these are industries in which innovation is both sequential and complementary. By 'sequential,' we mean that each successive invention builds on the preceding one—in the way that Windows built on DOS. . . .

"A firm that patents its product in a world of sequential and complementary innovation can prevent its competitors from using that product (or sufficiently similar ideas) to develop further innovations. And because these competitors may have valuable ideas not available to the original firm about how to achieve such innovations, the patent may therefore slow down the pace of invention. . . .

"But whether or not patent protection is available, a firm may well be better off if other firms imitate and compete with it. Although imitation reduces the firm’s current profit, it raises the probability of further innovation and thereby improves the prospect that this firm will make another profitable discovery later on. In short, when innovation is sequential and complementary, standard reasoning about patents and imitation may get turned on its head. Imitation becomes a spur to innovation, while strong patents become an impediment. . . .

"Conclusion -- Intellectual property appears to be one of those areas where results that seem secure in the context of a static model are overturned in a dynamic model. Imitation invariably inhibits innovation in a static world; in a dynamic world, imitators can provide benefit to both the original innovator and to society as a whole. Patents preserve innovation incentives in a static world; in a dynamic world, firms may have plenty of incentive to innovate without patents and patents may constrict complementary innovation. This suggests a cautionary note regarding intellectual property protection. The reflexive view that 'stronger is always better' is incorrect; rather a balanced approach is required. The ideal patent policy limits 'knock-off' imitation, but allows developers who make similar, but potentially valuable complementary contributions."

Richard Stallman presents the following experience:

"In the early 90s we desperately needed a new free program for compression, because the old de-facto standard 'compress' program had been taken away from us by patents. In April 1991, software developer Ross Williams began publishing a series of data compression programs using new algorithms of his own devising. Their superior speed and compression quality soon attracted users.

"That September, when the FSF was about a week away from releasing one of them as the new choice for compressing our distribution files, use of these programs in the United States was halted by a newly issued patent, number 5,049,881.

"Under the patent system's rules, whether the public is allowed to use these programs (i.e., whether the patent is invalid) depends on whether there is 'prior art"': whether the basic idea was published before the patent application, which was on June 18, 1990. Williams' publication in April 1991 came after that date, so it does not count.

"A student described a similar algorithm in 1988--1989 in a class paper at the University of San Francisco, but the paper was not published. So it does not count as prior art under the current rules.

"Reforms to make the patent system work 'properly' would not have prevented this problem. Under the rules of the patent system, this patent seems valid. There was no prior art for it. It is not close to obvious, as the patent system interprets the term. (Like most patents, it is neither worldshaking nor trivial, but somewhere in between.) The fault is in the rules themselves, not their execution.

"In the US legal system, patents are intended as a bargain between society and individuals; society is supposed to gain through the disclosure of techniques that would otherwise never be available. It is clear that society has gained nothing by issuing patent number 5,049,881. This technique was going to be available anyway. It was easy enough to find that several people did so at around the same time.

"Under current rules, our ability to use Williams's programs depends on whether anyone happened to publish the same idea before June 18, 1990. That is to say, it depends on luck. This system is good for promoting the practice of law, but not progress in software.

"Teaching the Patent Office to look at more of the existing prior art might prevent some outrageous mistakes. It will not cure the greater problem, which is the patenting of every new wrinkle in the use of computers, like the one that Williams and others independently developed.

"This will turn software into a quagmire. Even an innovative program typically uses dozens of not-quite-new techniques and features, each of which might have been patented. Our ability to use each wrinkle will depend on luck, and if we are unlucky half the time, few programs will escape infringing a large number of patents. Navigating the maze of patents will be harder than writing software. As The Economist says, software patents are simply bad for business."

And just in case none of the above convinces you, it might interest you to know that patent lawyers are abuzz about a recent decision by the U.S. Court of Appeals for the Federal Circuit to review a patent case, Phillips v. AWH, because they are hoping for some reform, and when lawyers are clamoring for reform of the legal system, you know something is surely broken:

"'I'm ecstatic,' said William Atkins, a partner in Pillsbury Winthrop's McLean, Va., office. 'What the Federal Circuit will tinker with is at the heart of the U.S. patent litigation system. One small modification, and it affects virtually all U.S. patents.'

"'All district judges and practitioners have been tearing their hair out' over how to read a patent claim, said Michael Barclay, a partner at Wilson Sonsini Goodrich & Rosati. 'The problem is that three-judge panel cases have been all over the map. There have been no consistent guidelines.'

"Sometimes courts rely on dictionary definitions, sometimes the language in the patent itself. Barclay said district judges are reversed on claim construction 50 percent of the time, 'so they might as well flip a coin.'"

Flipping a coin means appeals are inevitable, because the loser always knows he has a shot on appeal. No wonder patent cases are so expensive. Chief Judge Haldane Robert Mayer dissented from the court's decision to review Philips v. AWH, because he felt the decision didn't go *far* enough to change the broken patent system, or as he put it, "because I am convinced that shuffling our current precedent merely continues a charade, I dissent from the en banc order."