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Happy end for RIM ?

27 February 2006 by Ch. Tronche | Comments Off | Filed in IP

Far from it. But the suspense goes on…

RIM Dodges Shutdown Bullet

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Link of the day: Microsoft protects its partners against patent litigation

10 February 2006 by Ch. Tronche | Comments Off | Filed in Software patents

Source: The Register.

Once again we have to question if patents (essentially software ones) are part of the solution or part of the problem.

In short, Microsoft wants to enter the smart phone market. Not only to enter it, but to storm it. To become the Microsoft of the smart phone, the undisputable mammoth.

However, the task is such than even Microsoft can’t do it alone. It needs other companies to build everything that’s necessary and is not an operating system or an application. It wants an ecology of applications for smart phones and PDAs, with Microsoft operating system at the center of the stage, very much like every third-party application for desktop Windows adds value to Microsoft today (and may be lack of appropriate software for Windows server makes avenue for other operating systems in the server world, but that’s another story).
The trouble is that companies (especially technologically saavy ones) are rather cold about it nowadays: they remember RIM vs NTP, RIM in Germany, battles around Qualcomm’s patents and more, and more.

So they don’t even try, and those having patents are the winners: they’ve stopped innovation from their competitors, not because their patents hold, because of superior technology or better product (they seldom build products), but by fear of litigation.

Thus, this isn’t good news for Microsoft. But there’s a solution: protect the small companies from IP litigation with the mighty shield of Microsoft money. This is what Microsoft is proposing.

Two thoughts about it:

  1. Funny time when small companies must be protected against the devastating effects of software patents by the software titan, Microsoft itself. Funny we need this so the locomotive of innovation can resume its course. Weren’t patents supposed to make innovation blossom ? Weren’t patents (not Microsoft) supposed to protect these innovative companies ?
  2. Now, if you’re CEO of such a company, and the company’s good, you know what’s your future: you’ll be bought by Microsoft. For quite cheap. If your product really thrills and Microsoft really needs it, Bill will just takes the shield off for you. He can do it, after all it’s his shield. And you, poor lamb, what will you do ? Fight the patents coyotes or sell yourself to Microsoft to go back to its protective umbrella ? But know that it won’t pay too much for that. It won’t have to. Offering an IP umbrella for free may be a very good investment for Redmond champion.

There was another way to unleash innovation by the way: just drop software patents in the law.

Why patents are bad for software

9 February 2006 by Ch. Tronche | Comments Off | Filed in Software patents

Software patents certainly incur important costs:

  • to get them (cost quite marginal here, if you look at the other costs)
  • to defend them in court
  • you must get an insurance to ensure your company won’t be disrupted by a patent. Actually, this cost is so high in the US (where software patents are routinely granted), that nobody accepts to insure that risk any more, putting the whole economy (producers of software, but also users of software, that is, almost anyone) at risk in a kind of “software patent risk bubble”.
  • they make the software much more costly (see here why).

They’re other cons also:

  • patents are supposed to be a tool to boost innovation. However, the “free / open source” software (which developed outside the patent system) is undisputably the most innovative and dynamic segment of the software industry. Certainly, lack of patents there doesn’t translate into a lack of creativity. Any study in the patent domain that doesn’t take this into account cannot pretend to be serious.
  • Patents are supposed to protect an invention during the “development” phase, that is when going from prototype to mass-production. However, this time is essentially zero-time, zero-cost in the software world: the means to mass-copy the software and distribute it (via internet) not only pre-exist the software, but also have a cost of essentially zero. Contrast this to, say, a drug, where the way from the lab to the mass production can be a research project in itself.

The software patents thus, create no incentive for innovation, is almost useless, and really stifle it by increasing the cost of software, the breath and blood of the 21st century information economy.

Why should we tolerate it then ? Don’t we want innovation and growth ?

The ideas behind patents

3 February 2006 by Ch. Tronche | Comments Off | Filed in IP

We should remember today why the patents, what are the fundamental ideas behind them (as opposed to the way they’re used, that is, the how-tos of patents).

What is a patent ?

A patent is a law-granted monopoly.

Why patents ?

  • Patents are an incentive to create, and as such, a tool for policy makers
    • By granting patent holders a temporary monopoly, they can get better-than-competitive-market profitability, and thus get an incentive in innovating more. This idea’s the basis for economical analysis of patent policies.
  • Patents protect small innovators from being stolen by big business.
  • Patents buy small innovators time to develop their inventions (very much like “moral rights” in the french author rights system)
  • Patents help the diffusion of the knowledge
    • The idea is that, without patents, the inventor may be tempted to keep its invention secret to protect it, thus making the invention lost for the human kind (potentially)

How do you get a patent ?

You fill some papers at the patent office, describing the invention in such a way that someone “skilled in the art” can reproduce it, claiming what’s supposed to be new, what you want a monopoly for, and other informations.

And you pay (important thing).

The office then “examines” the patent. Here, the examination means different things in different countries. In any contry, the patent’s gonna be read by someone, who tries to assert if it’s “reasonnable”. For example, if you try to get a patent for a perpetual motion machine, chances are that your patent will get rejected. Some formal checkings are made, for example I believe that, in the US, patents can only be granted to individuals, not organizations. In some countries, a prior art search is made (the office tries to assert the novelty of your patent). In other countries, there’s no such search, and the burden of the prior art search rests on you, the patent applicant (very much like in the trade mark system).

At some point, your patent gets registered.

What then ?

An important thing is that, whatever the patent office says, any interested party can go to court after your patent registration and claims your patent is invalid because for example, lack or novelty, or infriging a previous patent.

This raises the interesting question of how much money’s a brand new patent worth (close to zero, if you followed this last paragraph).

Plavix may be copied…

25 January 2006 by Ch. Tronche | Comments Off | Filed in IP

Sanofi‘s antri-stroke drug may be copied by Canadian generic maker Apotex (others such as Indian’s Dr Reddy are contending too). Sanofi, however may very well detain a valid patent on the Plavix. What’s the lesson ?

First, Sanofi’s patent may very well be an illusory protection. Apotex may be crushed by Sanofi in a court of justice, or may be not. Certainly, if you’re holding Sanofi shares (as well as Apotex), you should be cautious about what they’re worth.

Second, drugs are paid in many places, at least in part, with public money. Or health protection system, but this is the same. In the end, the state is the ultimate health guarantee for the citizens, and hence picks up the ultimate bill. This is also true when trying to bring health protection in third world countries, where IP may very well looks like a rich country problem, that is, a secondary one.

The bottom line ? Drug patents are weak. Governments want cheap drugs, because they’re out of money to pay for it, be it in poor or not-so-poor countries. Whatever they say, they could withdraw their support as soon as they’re in political trouble on some front they would give a higher priority. And without legislative power behind it, a legally-build monopoly, such as a patent, is a monopoly that can’t be enforced. A beast that shouldn’t valued too much…

"There's an R&D crisis" (in pharma)

23 January 2006 by Ch. Tronche | Comments Off | Filed in IP

Seen on ip-watch, a comment by Ellen ‘t Hoen of Médecins Sans Frontières: “I hope that the CIPIH report also gives clear guidance to both WHO and countries on how to tackle the health R&D crisis while ensuring that essential health products become affordable and available.”

This means there’s a crisis. Is IP the source of this crisis ? Can IP be used as a useful tool to get out of it ?

Beware software patents… and IP in general.

20 January 2006 by Ch. Tronche | Comments Off | Filed in Software patents

Actually, I refuse the vocable “Intellectual property”, which let people think that you can own intellectual stuff the way you own a car. “Exploitation monopoly” is the real word for what they call IP.

Note that I don’t despise these monopolies as a whole (I’m the owner of a few of them myself). Actually, I believe part of the problem is to put things as remote as a trademark, a patent, a song, the recording of the song, etc… all together in the same bag. Having a clear separation of these very differents rights is, in my non-lawyer humble opinion, a real and interesting challenge for the lawyers of the 21st century.