Microsoft

Microsoft should disengage from the patent wars

It's the consumers who suffer as competition is stifled and products are delayed by a multitude of patent lawsuits. It is time to stop the madness.

I know this will probably never happen, but this is the time of the year when we suspend our cynicism and believe in elves and flying reindeer, so forgive me if I indulge in a little impossible dreaming on a cold December day.

As I sit here listening to songs that extoll the virtues of peace on earth and goodwill toward men, I'm thinking about the lack of goodwill that the patent system has produced within the tech industry.

Apple's lawsuits have resulted in a (now-lifted) ban on sales of the Galaxy Tab in Australia. Motorola Mobility's lawsuits have obtained a similar injunction against the sale of Apple's 3G-enabled iOS devices across Europe. HTC is facing the possibility of having its smartphones banned in the U.S., if a December 14 ruling goes in Apple's favor.

Is this really what the original concept of patent protection was intended to do? It's the consumers who suffer as competition is stifled and products they're waiting for aren't allowed to come to market.

Where's Microsoft in all this?

Microsoft has been involved in its share of patent lawsuits, both as the plaintiff and as the defendant. And they've won some and lost some. In one of the most high-profile cases recently, the company claimed that Android devices infringe on its patents and signed deals with ten companies -- including Samsung, HTC, and Acer -- that reportedly cover around half of all Android devices.

Microsoft itself pays big bucks to license patented technologies from other companies. According to their general counsel, Brad Smith, the company has paid more than $4.5 billion to other companies for licensing fees over the past decade.

Litigation madness

Credit: Department of Justice

When it comes to patents, it seems as if everybody is suing everybody in a shotgun approach that undoubtedly makes the lawyers happy. In the summer of 2010, Microsoft cofounder Paul Allen sued most of the major players in the tech industry (except Microsoft and Amazon) for violations of patents that cover online commerce and displaying information such as news updates and stock quotes on web pages.

The explosion in the number of patent lawsuits really revved up in the 1990s, when the annual number of such lawsuits doubled. And the number of patent suits, just in the mobile handset space, has been increasing by about 25 percent per year. In 2011, there were 294 of those mobile patent lawsuits filed in just one month (August).

In fact, in many cases both parties in a patent suit have filed suits against one another. In the tech industry, it has become common for companies to build portfolios of patents that they can then cross-license to other companies whose technologies they want to use, in effect trading licensing agreements.

It's reminiscent of the old "MAD" (Mutually Assured Destruction) theory of global politics, in which each party is kept in check by the knowledge that the other party has similar weaponry to use against it. So, if you deny me the ability to use your patented technology, I'll deny you the ability to use mine, and we'll both be destroyed (or at least critically hampered).

This "stockpiling of patents" as a defensive measure is often behind acquisitions of companies that wouldn't seem to have much value to the buyer -- but do because of the patents they hold. This was a reason given by Larry Page for Google's acquisition of Motorola Mobility earlier this year.

Here's the problem

If everything continues as is, companies will keep piling up the patents and flooding the courts with lawsuits. Attorneys will keep getting richer, as companies spend more and more money to go after violators of their patents and/or defend themselves against charges that they've infringed on someone's patent. The cost of all this litigation will be passed on to the customers who buy these companies' products.

Innovation will be stifled because only the largest corporations will be able to afford to take the risk of creating new products that may invoke lawsuits. Consumers will have fewer choices -- and less competition may mean higher prices, too.

Meanwhile, devices that consumers and businesses want and need will be delayed or even prevented from going on sale altogether. After Apple secured a ban on the Galaxy Tab in Europe, last week the tables turned and Motorola won a ruling that could ban the sale of Apple's 3G iOS devices in the European market. Taken to its logical conclusion, this "MAD" race could leave us with no mobile devices at all.

What's the solution?

Credit:PS3Blog.net

Remember the only "right move" that the WOPR computer could come up with in War Games (the 1980s movie that was a commentary on the cold war)? After analyzing every possible outcome, the system decided that the only winning move was not to play.

Perhaps if one major player in the tech industry were to be courageous enough to stop playing the patent game, others would follow suit. After all, public opinion is generally negative toward those who sue. Apple, once well-liked by almost everyone, has garnered a reputation as a bully for its barrage of patent lawsuits.

What would happen if Microsoft took the lead in unraveling the tangled mess that the patent system has wrought by declining to sue? Would it start a trend -- or would the company immediately be decimated by enemies who would rush in to infringe on all their patents?

Steps in the right direction?

Last summer, Microsoft did actually take a step to take on the patent laws themselves, filing a case with the U.S. Supreme Court -- which doesn't hear ordinary patent disputes -- to challenge the level of proof that has been the standard for patent litigation, which differs from that of most other civil cases. Microsoft wanted that standard lowered from "clear and convincing evidence" to "a preponderance of the evidence" for proving a patent invalid. Google and (more interestingly) Apple backed Microsoft in the effort. However, the Solicitor General and Attorney General opposed and the Court ruled against Microsoft.

My impossible dream

Credit: pablopicasso.org

Unfortunately, I don't think there's a snowball's chance in the Hot Place that Microsoft will actually do what I'm suggesting. Their patents have been far too lucrative for them to let go of such potential money-makers. Goldman Sachs analysts say Microsoft will take in $444 million from their Android patent fees alone in 2012.

The more likely solution -- if there ever is one -- will be government intervention, in the form of an overhaul of the patent system. Although an "overhaul" bill -- which Microsoft supported- - was signed into law in September, it doesn't really do much to address the problem of excessive litigation, but rather focuses on expediting the patent application process. That could mean even more patents issued and thus (although the bill is said to be aimed at reducing the legal battles) even more litigation.

So I'm not very hopeful that Microsoft (or anyone else) will fix this problem anytime soon. But it's a nice little dream.

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About

Debra Littlejohn Shinder, MCSE, MVP is a technology consultant, trainer, and writer who has authored a number of books on computer operating systems, networking, and security. Deb is a tech editor, developmental editor, and contributor to over 20 add...

10 comments
cdiamond
cdiamond

The damage was done some time ago when Big Pharma insisted that the US government insisted that all countries gave equivalent universal patent coverage for "novel" pharmaceutical compounds. Computing jumped on the bandwagon. Needless to say, that was a very lucrative time for lobbyists. So the US said patents must cover the whole range of technology. And because no-one except the real experts knew what this meant, (and they were told to keep their mouths shut) all the diplomats agreed, because every one of the diplomats give it his own interpretation. Now this is writ in stone.Every country must comply. Even the Chinese (well theoretically anyway). If US wants to change this, it will require a new WTO agreement. The trouble is that if the US wants to change something, the other countries also want to change things. (Just not the same things.) And of course everyone knows how the Senate loves to approve treaties. [You don't? Then read this carefully again.] Of course US could unilaterally opt out. And the Chinese would have a good laugh. That would be a real field day for the lobbyists. As well as the lawyers prosecuting WTO disputes with the USA. (Fortunately they don't work on contingency fees.) The moral to this story is well known to all your readers: DO NOT MESS AROUND WITH COMPLEX SYSTEMS UNLESS YOU KNOW WHAT YOU ARE DOING. (If you know what you are doing, you're ignorant.) The most important key stroke is Ctrl-Z. To change this system back, see above for the rules. And you've still got the Law of Unintended Consequences to get in your way.

nrei
nrei

"Is this really what the original concept of patent protection was intended to do? It???s the consumers who suffer as competition is stifled and products they???re waiting for aren???t allowed to come to market." Yes. The purpose of patents is to give the inventor time to development and market products based on his invention. Without this protection, other companies would be able to use the invention without having to spend any money for the research and development of the invention, and therefore, be able to produce the product for less money than the inventor. If inventors didn't have patent protection, there would be no point in making their inventions inventions public. Either they would remain trade secrets or never see the light of day. The patent system was devised so that inventors would be able to profit from their inventions. In essence, the patent system is a way of bribing inventors to make their ideas public. Patent lawsuits are nothing new. They've been going on for well over 100 years. And the same complaints you've made have been made for just as long. There may be many problems with the current system. But until another way is found to reward inventors for their ideas, we're stuck with it.

dgoodale
dgoodale

I agree completely. It was so much easier 10 years ago when Microsoft would just steal products completely and incorporate them into Windows without paying a red dime to the company that owned the product. I'll always remember seeing The STAC Electronics trademark proudly displayed in the code Microsoft used for compression for several years before STAC Electronics won the lawsuit...but went out of business doing so. Sigh.......the good old days. ;-) With that said, I'm not really sure what the purpose of a patent IS anymore. Obviously, you can steal anyone's product and use it for as long as you like if you have the money to tie up the resolution process in court for years. Now we find that the corollary is true as well. You can stop the legal, valid owner of a product from selling their product using the same, incredibly broken, "Justice System".

chrisbedford
chrisbedford like.author.displayName like.author.displayName like.author.displayName 3 Like

Whose slogan was it back then that went "Innovate, don't litigate"? And why single out Microsoft in the headline when by your own admission Apple are the acknowledged bully-boys of the industry? I can sort of understand - even condone - patenting certain hardware techniques. But even then, HP for instance brag about how many patents they register every year in the printer division alone, but how much better / faster / cheaper / more reliable are their printers than anyone else's? OK they *sell* a lot more but that's probably largely due to marketing and word of mouth. Nothing wrong with HP printers - I'm an HP reseller, and I like the kit - but I'm saying I doubt the slew of patents is what's making them the market leaders. But software patents? Don't be silly, people.

R!nzl3r
R!nzl3r

Then maybe, we wouldn't have had these Apple vs Samsung pattern wars. They were the first to file a patent on it's tablet design, but not the first to design a tablet. Samsung isn't innocent either so now it's just vicous circle where consumers pay the price. I think it's not just microsoft, it's the whole legal system behind pattents. And to make things worse: in Europe we have something like 'Community Design' pattents. If you think USPTO was bad... http://www.osnews.com/story/25056/The_Community_Design_and_you_Thought_the_USPTO_Was_Bad

seanferd
seanferd

is that this is the Microsoft blog.

BALTHOR
BALTHOR like.author.displayName 1 Like

I noticed that Linksys is also there along with 2Wire.

BALTHOR
BALTHOR like.author.displayName 1 Like

I wanted a wireless driver for a USB pen drive Linux.Dell's site had no Linux available.In Linux it says the wireless is disconnected but it shows a signal.You can always hook up a network cable to your router if this happens.The point is Microsoft is the only one and Bill Gates is still the wealthiest man on Earth.Knowing this you would think that somebody would have jumped on the OS bandwagon to compete.

Mark W. Kaelin
Mark W. Kaelin

All of the patent-related litigation is bad for consumers (only lawyers really win), but what should be done about it? Do we need a complete overhaul of the patent laws? Is that a realistic solution?

seanferd
seanferd

Yes, we need a complete overhaul. Strip all the all the added cruft out of patent (and copyright) law, say, 150 years worth, and things will be fine as long as patent examiners get through their thick skulls the concepts of "non-obvious", "prior art", and "frivolous".