News

Analysis: Patent wars and the end of the software business

• By Gary Barnett
• September 16, 2004

(ANALYSIS) Imagine a post-patent-apocalypse world where no new software can be written because even the most basic software patterns cannot be used without paying a massive fee. And even if you wanted to pay $1 million to incorporate a "For ... Next" loop in your program, you can't transfer the money -- the banks are closed because the software and business processes they rely on belong to someone else.

While patent laws would be repealed and treaties repudiated long before this "patent winter" occurred, patents are still powerful medicine best applied sparingly and with great care. The extension of patent law to cover software raises great dangers for an industry that has become increasingly litigious over the past decade.

Some vendors, notably IBM, have a massive stockpile of patents that help to regulate the industry. The firm has, to date, shown itself to be judicious in its use of patents. But at the recent LinuxWorld conference in San Francisco, IBM issued a quiet warning to the industry. Amid growing concern about the extent to which Linux might infringe on a number of vendor's copyrights, IBM's Nick Donofrio, senior vice president of technology and manufacturing, said, "IBM has no intention of asserting its patent portfolio against the Linux kernel unless, of course, we are forced to defend ourselves."

The recent discussion of patents has centered on open-source software and the deep concerns many observers have that leading open-source software products may infringe on a raft of patents. Much of the debate is focused on Linux, but other leading products, like the Apache Web server, could easily become embroiled.

But I'm a little bemused by the notion that open-source software might be more of a risk to patents than closed-source software. The only reason for this is that it's easier to check an open-source product to see if it infringes on your patents because it is (by definition) easy to download the code and inspect it. Indeed, the fact that you can obtain source code for open-source products makes the claims made by some of its opponents that "open source is a charter to steal code" somewhat ridiculous. It's an odd kind of theft when you're obliged to leave everything you've stolen out on your lawn for the whole world to see and inspect.

Proprietary software enjoys a certain degree of secrecy; if a proprietary software vendor wishes to steal an idea from a competitor, or from the open-source movement, it has to compile the stolen code, effectively "hiding the swag." Ovum believes many proprietary software products are as full of "borrowed code" and patent infringing methods and constructs as any open-source product. As an example, let's examine operating systems.

There are relatively few software engineers in the world smart enough to write operating systems. If you go into the labs at Microsoft, IBM, Sun or HP, you'll be confronted by a bevy of super-brainy geeks. What is interesting is that many, if not most, of them have also worked for one or several of these other vendors at some time. In practice, the pool of "master operating system developers" in the world is so small that they all tend to move between a small number of companies. Knowing that their operating system developers are likely to end up working for a competitor, companies put onerous terms into their employment contracts that prevent developers from copying code and revealing secrets. Obviously, this is a ridiculous thing to expect as their knowledge and experience is precisely the thing that makes them so attractive to the competition.

If proprietary software is every bit as likely to infringe patents and copyrights as open-source code, then it would be wrong to penalize open source simply because those infringements are easier to identify. If Linux does become the subject of a legal battle over patents, then every closed-source operating system should be subjected to the same level of scrutiny. The only significant difference between open-source and proprietary software lies in having someone to sue.

The balance that intellectual property law has to strike is to protect people's right to profit from their efforts and to encourage the development and creation of new ideas and products while ensuring that the system is not abused to the detriment of the world at large.

The software industry is in the middle of a storm that could potentially have disastrous ramifications for IP law. If a global intellectual property war breaks out, the ultimate victims will be patent and copyright holders. Governments will move to prevent IP law from causing damage to their economies by repealing IP legislation and repudiating international treaties if necessary. Our advice to the industry as a whole is to apply IP law carefully and responsibly, or be prepared to face a backlash that could change the game entirely.