This month the Patent and Trademark Office reversed the Eolas patent that almost cost Microsoft half a billion dollars. See the extended text or my
Brian Watkins's weblog.
Last year Eolas corporation won a patent infringement lawsuit against Microsoft corporation. The verdict called for Microsoft to pay damages of over half a billion dollars—$500,000,000. And Microsoft also had to dumb down their web browser to nag the user with useless dialogs.
The 1994 patent claimed that Eolas had invented the idea of web browser software using &lsquot;plugins&rsquot; from another company to bring together more than one kind of content. One example would be using Flash to draw animation in a web page. Another is viewing a PDF document (like all the IRS tax forms) in a browser. Yet another would be movies showing up on a web page. Indeed, plugin technology is everywhere on the web.
So Microsoft really was guilty of using the idea Eolas patented. But did Eolas have a right to the idea? To be patented an invention must be both new and non-obvious. But plugins had been used in software for at least ten years before Eolas claims to have invented them. And the technique was far from non-obvious since the basis of it, dynamic linking, had been used for decades.
Ray Ozzie, the inventor of Lotus Notes, has demonstrated the Notes did exactly the same thing Microsoft is supposedly guilty of before Eolas even filed their patent. This is called "prior art" and is considered to invalidate a patent.
And this month the United States Patent and Trademark Office (PTO) has determined that the Eolas patent was issued in error. Microsoft will soon be back in court to reverse the half a billion dollar penalty.
But the problem of fraudulent and abusive patents like the Eolas patent is not solved just because the world's largest corporation has enough leverage to get the PTO to reverse one bad patent. For one thing, regular people don't have millions to spend on campaign contributions to get the political pull to get the PTO to pay attention. And the software industry is beset by these bad patents.
The classic example is the One-Click patent. Amazon filed for a patent on the idea of selling to repeat customers by requiring them to click only one hyperlink per item. Hardly anything in the world could be more obvious and such an idea could hardly be considered an invention. But the PTO tends to issue software patents with little or no review and the One-Click patent was issued. It has been a headache to online merchants ever since because no one wants to spend the money hiring lawyers to fight it.
The PTO has been issuing more and more "business method" and software patents that don't describe inventions but rather ideas about how to market to customers, how to design a web page, and what buttons on a web page should do. There has been a big change since the early 1990s and these new patents are a big mistake. They don't protect real achievements of innovators but instead give one business the right to sue anyone else who competes with them in a large area of business, like web browsers.
I worked for a client once that wanted to offer expert medical advice over the internet to lawyers with medical cases. It turns out that there are patents on any method of communicating for pay between experts in any subject area and clients over the internet. At least one of these patents is broad enough to cover anyone who sends an email to an expert asking if he is available for work.
Indeed, there are few computer interfaces or marketing plans that are not already possibly covered by one of these vague patents. The usual procedure in business today is to ignore those dangers and hope that if you are sued, you can hire enough lawyers to hold off the leaches.
And leaches they are. Companies like Eolas and Walker Digital have a mission of patenting every possible business plan and software technique by filing a series of hundreds of vague and complicated patents for ideas they have never put to work themselves. Those companies don't even run businesses of their own at all, but simply lie in wait for an honest company to come along so they can sue it.
The real danger isn't to Microsoft but to the new small businesses that are the fountainhead of innovation and don't have the money to fight in court or through politics. They have trouble raising money with the cloud of a patent threat over their heads. And we will never know the innovations we lose.
Just imagine if we had allowed the first person with the idea of overnight delivery or organic produce or 30-minute pizza delivery to file a patent and demand that anyone who wanted to enter the business pay a fee to him for twenty years. The patent system is changing to work like that.
The solution is simple. Patents are for new, real technical innovation.
- No more patents should be issued for variations on software interfaces.
- No more patents should be issued for business techniques or organization.
- Existing patents in these areas should be reviewed and invalidated if they do not describe a truly new invention.
Software is supposed to be protected by copyright and not patents. If a new mathematical technique—like a new cryptographic algorithm—is invented, it could still be patented by the rules above.
The software industry is in the doldrums as it is; we must do something about this before we stop more innovation in our economy.