The Internet Patent Land Grab
by Tim O'Reilly
June 2000
At about 6 pm on February 29, I published an open letter to
Jeff Bezos of Amazon.com on my web site, www.oreilly.com. I
asked my customers to join me in protesting Amazon's suit
against Barnes & Noble for infringing Amazon's "1-Click"
patent. This event made news, because my company sells
hundreds of thousands of books each year via Amazon, to a
constituency made up largely of serious software developers.
I had decided to take a stand, not because I thought Amazon
was the worst offender when it came to software patents, but
because I thought that I might be able to get Amazon's
attention in a way that I was sure I couldn't with companies
like Walker Digital (Priceline) or IBM that have made
patents a key part of their business strategy. After all,
Amazon is a company that has benefited enormously from the
open standards of the web.
By the time I came in to work the next morning, there were
over 1000 signatures and additional letters on my site, and
over the next 3 days, I received 10,000 letters in support.
After a day and a half, I received a call from Jeff, and
after a long conversation, he agreed to join me in calling
for a closer look at the dangers to the industry in software
patents. (For the full record, see
http://www.oreilly.com/news/patent_archive.html, and http://www.oreillynet.com/patents/.)
As a result of my protest, Jeff Bezos made a number of
suggestions for reform in his own
open letter,
including development of a
prior art database, a public opposition period for new
patents, and a shortening of the term for software patents.
In the months since my initial protest letter, and Jeff's
response, I've spoken with many people about problems and
possible solutions. I claim no expertise in patent law.
However, it's important for those who are involved in the
patent system, to listen, as I have, to those true
innovators whose rights are being trampled by the expansion
of patents to the Internet software sector.
Here's the gist of what I've heard:
The working programmers who are building the innovative
new applications of the Internet--the actual inventors whom
the patent system is supposed to protect--feel threatened by
the expansion of software patents. The Internet industry
was built on open standards, open source, and a great deal
of imitation. Now, the rules are changing, as lawyers and
big companies get involved, and the people who've made this
one of the most exciting and dynamic industries out there
today are worried. As Tim Berners-Lee said to me in email:
"the whole development and standards process ...is in a
precarious state." At least in the Internet industry, and
quite possibly in all of the software industry, the
consensus among actual developers seems to be that patents
hurt rather than harm their ability to innovate.
The patent office and those in Congress who oversee it hear
daily from those who are invested in the expansion of the
patent system. Billions of dollars are at stake. But it is
the responsibility of government to act not just on behalf
of those who lobby them, but the public. The vast majority
of software developers don't believe that the system works
for them. Further, there is a general feeling that the people who
are filing patents are quite often NOT the people who have
actually made substantial inventions. Instead patents are
going to companies that are adding small features to broader
inventions that were put into the public domain, or have
formerly been protected only by copyright. In many cases,
patents are being granted on techniques that are already in
wide use, but have not been patented or published in the
kinds of journals that the patent office searches in looking
for prior art.
Even the individual "inventors" listed on many software
patents often don't believe that the patents are legitimate.
As one developer at a large software company remarked to me:
"I have my name on 9 patents [including a prominent web
patent] and I think all of them are a joke."
One frequently cited problem is that the patent office
doesn't require companies to proactively search for prior
art. While some effort has been put into prior art
databases, in general there seems to be a "don't ask, don't
tell" approach, where companies don't look very hard, and
the patent office doesn't have an affirmative requirement
for applicants to search. What's even worse, it seems as
though there are actual disincentives to knowing about prior
art; because there are penalties if you knowingly ignore
prior art, ignorance is the best defense. Further, once a
patent is granted, there are substantial benefits to the
patentholder, even if prior art is subsequently brought up
as a defense against patent infringement.
In short, unless the patent office makes more rigorous
search and disclosure by applicants a requirement, the
industry is not likely to police itself. Based on some of
Commissioner Dickinson's recent remarks, there may be some
openness to placing this burden on the applicant, and while
such a move is likely to provoke furious opposition from the
patent bar and most applicants, I am confident that most
working developers would applaud that move. Even if the patent office does require patent applicants
to search for prior art, finding it can be difficult,
because there are huge gaps in the record, and so
much prior art is not in searchable databases. However, I
believe it would be possible to harness Internet era tools
to enable public comment on existing and pending patents,
and to provide leads for more formal prior art searches.
Apparently, a recently enacted law requires disclosure of
patent applications seeking international protection 18
months after filing. While a formal "opposition period" is
not likely to be supported by the patent office, I believe
that a grassroots effort to bring relevant prior art to the
attention of patent examiners would have a powerful effect.
As has often been said, sunlight is the best disinfectant. Beyond the prior art problem, though, the courts seem to
have broadened the scope of what is patentable. Internet
software is now sufficiently powerful that many techniques
widespread in the physical world can be transferred to the
Internet by anyone with a minimum of effort. For years,
this was done without the aid of patent protection, on the
grounds that much of what was being done was obvious. Now,
because of favorable rulings by the courts and the patent
office, companies are rushing to patent, with the result
that companies are being granted patent monopolies on
obvious techniques not by virtue of having invented them,
but by virtue of having been the first to file.
There are two classes of offenders:
Companies that are actually trying to take advantage of
the situation, and see the patent land grab as a huge
financial opportunity. Companies that are patenting defensively, lest someone
else take away their right to use their own inventions.
In either case, the system has become a huge tax on
innovation, rather than the spur to innovation the patent
system is supposed to provide, as resources are shifted from
developing innovations to protecting them. Despite the claims of patent advocates that patents
protect the rights of small inventors, the system is tilted
heavily in favor of companies with large patent portfolios.
As one lawyer from a company with a huge patent portfolio
commented to me about Amazon: "They aren't a big company.
They don't have enough patents to play this game." If
Amazon is too small to play, I suspect that the average
small inventor doesn't have much chance of profiting from a
software patent. The only small players who seem able to
benefit are those whose aggressive lawyering allows them
to extract a tax from companies who find it cheaper to pay
a licensing fee than to battle a patent in court. Real
inventors trying to build real businesses on the basis
of technical innovations usually don't have the time or
resources to play this game. While it is difficult to definitively establish
boundaries around "software" or "Internet" patents, it might
be desirable to have a moratorium on the granting of
business process patents as applied to the Internet, just as
there has been a moratorium on Internet taxation. This
would allow the industry and the patent office more time to
understand the scope of the problem and possible solutions.
This is a solution that was recently suggested by Harvard
Law professor Lawrence Lessig in a Wall Street Journal
editorial on March 23, 2000. A patent, once granted, is substantially protected by a
presumption of validity that can only be overcome by "clear
and convincing evidence". Further, in the case of a
challenge, it appears that the patent holder is currently
able to simply amend the patent, with the result being
unappealable. This means that once patents have been
granted, there is substantial risk that companies will be
unable to use common techniques without payments to
patentholders even in cases where prior art clearly exists.
One alternative, recently suggested, is to change the
standard during re-examination from "clear and convincing
evidence" that a patent is invalid to the lower standard
that a "substantial new question of patentability" has been
raised. While there is a fair amount of scorn regarding some
particularly egregious patents, and a low opinion of the
patent office among many industry participants, many of
those who are knowledgeable about the system generally feel
that the patent office is simply strapped for resources, and
within their constraints, do as good a job as they can.
Based on this concern, there is a feeling that additional
resources for the patent office would be desirable.
However, there is some concern that because it draws its
fees from patent applicants, there is an incentive for the
patent office to regard applicants, rather than the public
as its "customers." Regardless of the final solutions, our biggest message
is that all is not well in the Internet and e-commerce
industry. The roots of innovation in what has been, up to
now, an extremely vibrant area of the economy are seriously
at risk. Decisions made -- or not made -- by those
overseeing the patent system will have enormous
repercussions for years to come.
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