Patent Nonsense

Ever since Autodesk had to pay $25,000 to ``license'' a patent which claimed the invention of XOR-draw for screen cursors (the patent was filed years after everybody in computer graphics was already using that trick), at the risk of delaying or cancelling our Initial Public Offering in 1985, I've been convinced that software patents are not only a terrible idea, but one of the principal threats to the software industry. As I write this introduction in 1993, the multimedia industry is shuddering at the prospect of paying royalties on every product they make, because a small company in California has obtained an absurdly broad patent on concepts that were widely discussed and implemented experimentally more than 20 years earlier.

Today, software companies are patenting everything in sight, purely to assemble an arsenal to counter-sue anybody who sues them for infringement. Oracle Corporation has taken a public stand against the patentability of software and has forsworn use of its own patents except to counter-sue in infringement claims. The League for Programming Freedom is working for legislation and/or rule-making which would declare algorithms and software non-patentable. Despite these efforts, the trend toward increased litigation, constraining innovation in the software industry, is accelerating. The U.S. government is using trade negotiations to force other countries to institute software patents in their own markets.

While eliminating software patents would be the best solution, changing the law takes a long time and is uncertain to succeed. I've been trying to puzzle out how the software industry might rescue itself from immolation through litigation and came up with the following proposal.

One idea that's been rattling around my skull for the last month or so regarding the patent mess contemplates an active defensive posture. Whether Amurrcan business could (legally) or would (courage/imagination constrained) do such a thing is another matter, but in essence it's a 1990s replay of how the radio companies untangled their patent mess in the 1920s by cross-licensing all their patents through the newly-formed RCA.

Basically, I've been thinking about using NATO as a model of a patent defence consortium. Suppose a bunch of big software companies (perhaps led by Oracle, who's already taken the point on this) were to form PATO--Patent And Technology Organisation--and contribute all their current software patents, and all new software patents they were granted as long as they remained a member of PATO, to its ``cross-licensing pool''. To keep the lawyers and shareholders from going nuts, the patents would be licensed through PATO but would remain the property of the member--a member could withdraw with appropriate notice and take the patents back from the pool.

Any member of PATO would be granted an automatic, royalty-free license to use any patent in the cross-licensing pool. Thus, by putting your patents in the pool, you obtain access to all the others automatically (but if you withdraw and pull your patents, of course you then become vulnerable for those you've used, which creates a powerful disincentive to quit).

The basic principle of NATO is that an attack on any member is considered an attack on all members. In PATO it works like this--if any member of PATO is alleged with infringement of a software patent by a non-member, then that member may counter-sue the attacker based on infringement of any patent in the PATO cross-licensing pool, regardless of what member contributed it. Once a load of companies and patents are in the pool, this will be a deterrent equivalent to a couple thousand MIRVs in silos--odds are that any potential plaintiff will be more vulnerable to 10 or 20 PATO patents than the PATO member is to one patent from the aggressor. Perhaps the suit will just be dropped and the bad guy will decide to join PATO....

Since PATO is chartered to promote the free exchange and licensing of software patents, members do not seek revenue from their software patents--only mutual security. Thus, anybody can join PATO, even individual programmers who do not have a patent to contribute to the pool--they need only pay the nominal yearly dues and adhere to the treaty--that any software patents they are granted will go in the pool and that they will not sue any other PATO member for infringement of a software patent.

PATO is purely for software patents--presumably a patent office category can be used to make the definition precise. Joining PATO does not compromise hardware or other non-software patents held by a member.

Now what I really like about PATO vs. many of the other proposals I've seen is that I think it has at least a shred of a chance of being accepted by Amurrcan software companies because, at the heart, it requires absolutely no change in the way they're currently operating. Given how difficult it is to get our leading-edge high-tech business leaders to do anything off the beaten path, this is an advantage. Consider:

Today, most software companies are patenting everything in sight purely to cover their asses, without the least intention of enforcing their patents or looking at them as a source of revenue. When sued, they try to settle based on cross-licensing of something in their arsenal with the plaintiff's patent. With PATO, nothing changes--except by joining you're automatically safe against being sued by any other member, and you gain access to a patent pool perhaps 10 or 20 times larger than you own which you can use to beat off any patent weasel who shows up at your door. I've heard talk of ideas like a ``patent legal defence fund'', etc., but I've deliberately left that out of PATO--a member goes on using their existing patent attorneys for getting patents and defence--thus no change of responsibility and no difficult questions about how much members should contribute to the fund based on size, number of patents, etc.

So the only ``big gulp'' in joining PATO is renouncing revenue from your software patents. But what big software company is going around suing people today for patent revenue (as opposed to copyright, look-and-feel, etc., which are not the domain of PATO)? And in any case, a member can simply quit if they change their mind, getting all their patents back.

It seems to me that if, say, three or four of the top 10 software companies became charter members of PATO, the thing would snowball quickly to encompass the whole industry. I mean, if Joe Software, busy writing the killer app of the 90's in his basement, can, for US$25/year join PATO and thus be protected against patent claims from, say, Apple, Oracle, Microsoft, Autodesk, Symantec, and Borland, won't he?