"I see patents, software or otherwise, as one of the very low cost ways to build a formidable business tool to protect a marketplace. A patent is lower cost and often more effective than almost any other barrier to entry. This is one mechanism by which small inventors can carve out some value and build a business. Granted, a single patent may cost $10-20K or more, but it is far less expensive than a large marketing campaign, and much more effective at keeping competitors at bay."

I agree with you completely. Convergence of many factors has gradually leveled the playing field for independent inventors. Big predatory companies failed to see these shifts and in their arrogance wrongly appropriated many inventors property.

Companies like Microsoft thought they were invincible. In fact, Microsoft has a reputation for being one of the most effective predators and they have learned the hard way that if those forty companies who have sued Microsoft get their cases in front of a jury Microsoft is getting hosed.

Think about nearly forty infringement cases with collective damages in terms of tens of billions of dollars. Think about the cascading effect on Microsoft's already poor reputation and how that will affect subsequent awards. Is it any wonder that companies like Microsoft are desperate to reform patent law to deny those they have wronged their due?

Now look at this from the public's perspective. On one hand we have big bad Microsoft taking inventions and shipping the value of those inventions to India, and on the other we have inventor-entrepreneurs who build companies, have community ties, and employ the people who are losing their jobs due to Microsoft's massive outsourcing of high tech jobs.

So what is it going to be, will America continue to be land of opportunity where predatory and dishonest companies are held accountable for their conduct or will we allow the likes of Microsoft to socialize America's people's innovation?

I urge all who value the American way to join us to stop this outrageous attempt to impoverish America for their short term profitability.

Ronald J. Riley, President

The Alliance for American Innovation, LLC., www.AAI-USA.org
Direct (202) 318-1595
Also President www.PIAUSA.org & Executive Director www.InventorEd.org

Sorry Russ, but it is you who is completely out of touch with reality now :) If we were really "masquerading", why would UEAPME (represents 11 million European SMEs) and CEAPME (represents 500,000 European SMEs) support our positions? (FFII even became a member association of CEAPME).

Nonetheless, it certainly is true that large companies can also be hurt by the whole software patent mess. Some already saw this a long time ago and simply do not think the hassels are worth it. E.g. Cisco is also plainly against software patents.

Although large companies can mitigate the risks somewhat using defensive portfolios, there is no defence against pure patent holding companies, not even for Microsoft. It's not for nothing that large insurance companies who tried to offer software patent policies during the nineties are now running losses of up to 3000% (says Ian Lewis, of Miller Insurance Ltd -- http://www.millerinsurance.co.uk/)

Of course these large companies want to "optimize" the system further so they can get rid of (or reduce) potential risk factors (all in the name of "patent quality" and "innovation", of course). It is definitely ironic that the environment they created themselves (everything should be patentable) is now backfiring, simply because each software product consists of so many incremental innovations made by so many different players, you are bound to infringe on something from someone. We already noted that in June last year, when they started first complaining (http://wiki.ffii.org/PatentTrollsEn)

It is however naive to think that most small companies are patent holding companies with the potential of getting a couple of cool millions from Microsoft, IBM etc though, and that this potential outweighs the negative effects of patent farming by large companies and the transaction costs associated with the patent system when applied to the software sector.

Regarding your (repeated) claim of how we are weak on economic arguments: I still have not seen any response from you to the (in the mean time again extended) evidence collected e.g. at http://wiki.ffii.org/ConsParl0406En

Of course, acting as if something does not exist if it does not suit your point of view (something you have accused us of plenty of times already, without substantiation either), is very convenient.

Jonas:

The reason why so many companies allegedly 'support' your position is that they are obviously misinformed. The FFII rallying cry is that you don't want the big companies 'stifling innovation' by flexing their patent muscle.

Even though FFII kept saying that the sky was falling concerning these big companies, it never came to pass that the big companies went after the small companies.

Why did the FFII doomsday prediction never happen? It is because it was based on a false assumption.

When the big companies did express their position, they prefer a weaker patent system so that small companies (that you allegedly represent) will have even less power and influence. The big company's position on the issue negates and obviates all of the misleading doomsday preaching by FFII.

Why do small businesses allegedly support FFII? It is because they bought the FFII propaganda based on the fear of the big company's enforcement of their patents.

I suggest that most of the small businesses were party to a reasonable, meaningful dialog, rather than propaganda, protests, and wild theories, they would have expressed their interests in a different way and come to a different conclusion.

Much of my unhappiness with FFII is not that I disagree with their position, but in the fact that they use scare tactics, protests, and baseless assumptions used in their arguments. FFII's methods are more terroristic than democratic.

I don't know how FFII will apologize to all their members explaining how their arch nemesis was behind them all the way.

"Even though FFII kept saying that the sky was falling concerning these big companies, it never came to pass that the big companies went after the small companies."

They already do so, today. It was even already mentioned in a 1997 issue of Bussiness Week (http://swpat.ffii.org/players/ibm/#gajn)

"I suggest that most of the small businesses were party to a reasonable, meaningful dialog, rather than propaganda, protests, and wild theories, they would have expressed their interests in a different way and come to a different conclusion."

They are. They tell their own stories, we don't. Or do you honestly think all the people at e.g. http://www.economic-majority.com/testimony/index.en.php are FFII shills or so, and their real-world experiences are all invented? (maybe we should have patented them in that case)

"Much of my unhappiness with FFII is not that I disagree with their position, but in the fact that they use scare tactics, protests, and baseless assumptions used in their arguments. FFII's methods are more terroristic than democratic."

I see you finally upgraded your insults to the more contemporary variants. In my previous post I referred to tons of reference material (all of it written completely independently from the FFII).

I personally detest the baseless scare tactics used by EICTA companies, where they threaten to move their R&D out of Europe if they don't get European software patents (nevermind they already did so in the past, also from the US, and move to China simply because it's cheaper there and there are more and more well-trained Chinese engineers). See http://www.chinadaily.com.cn/english/doc/2004-12/02/content_396591.htm

They are now even sinking to a new low, making their employees call MEPs directly and have them beg to "protect their jobs". Do you honestly think they would do that if they thought software patents would help small companies more than them? Are they also misguided by us? I think you seriously overestimate us.

FWIW, we organised a conference together with the European Patent Office this week (maybe they're also part of the conspiracy?). See http://www.european-patent-office.org/news/info/2005_05_18_e.htm

What we are discussing is not a black and white distinction between different facts, but we need to understand is which facts, theories, and arguments are of a higher priority, and carry more weight, than the others.

Case in point: there are larger companies exerting their patent portfolio against smaller companies, and that threat exists continually for the small companies.

There are also smaller companies who assert their rights against the big companies.

In the final analysis, the big companies see the second situation as of primary importance, and the first situation as secondary. Thus, they would rather weaken everybody's patent rights over enforcing their patent rights.

FFII has been focused on secondary effects in the marketplace, not the fundamental primary effects.

Balancing and understanding which effects are primary and which are secondary is the essence of the entire business and economic argument between the pro-software patent crowd and the anti-software patent crowd.

I do not dispute the facts, only the interpretation of those facts.

In the final analysis and after weighing which effects are primary and secondary, the big companies have decided that to keep their competitive advantage, they would prefer a weaker patent system. They understand that a strong patent system makes them more vulnerable to innovative startup companies.

FFII has tried to argue the exact opposite: that a weaker patent system makes the big companies more vulnerable.

FFII's myopia on secondary effects has caused them to go down a road that does the exact opposite of what they allegedly intended to so.

BTW, I don't like scare tactics used by either side. However, being able to point out a speck in your enemy's eye does not make the log in your eye disappear.

"FFII has been focused on secondary effects in the marketplace, not the fundamental primary effects."

Our fundamental criticism on software patents stems from the observation in economic literature that the transaction costs of the patent system outweigh the benefits it may have when applied to software. Those are the fundamental primary effects we want to counter.

"FFII has been focused on secondary effects in the marketplace, not the fundamental primary effects."

I have not seen a single shred of evidence that overall, small companies profit more from software patents (mind you, software patents, I'm not talking about patents in general because I simply have not studied the literature on that) than that they lose out.

"FFII has tried to argue the exact opposite: that a weaker patent system makes the big companies more vulnerable."

We are not asking for a "weaker patent system", but for a limit to its applicability. We are asking for an exclusion of software (or rather, pure logic/mathematical/business innovations, usually claimed in terms of their software-implementation in order to be technical/useful) from the patent system.

Microsoft & co are asking for limitations on damages and things like that, not for abolishment of software patents. If you made them choose between no software patents or no extra limitations to damages, I bet they would choose to keep software patents (they'll probably deal with it in a couple of years by having Myhrvold's Intellectual Ventures buy small pure patent companies out, which can then continue to finance itself by license incomes from other companies -- although one could wonder whether this won't become another bursting bubble).

"FFII's myopia on secondary effects has caused them to go down a road that does the exact opposite of what they allegedly intended to so."

I have not seen any evidence of this (I'm not talking about individual cases here, but macro-economically), and economic literature (as well as SME associations) tell me an entirely different story. As I said before, you really overestimate us if you think that we have the power to convince an established SME association representing 11 million SMEs that software patents are bad for them if the reverse would clearly hold.

These people live and breathe SMEs, and have been doing so for years, long before the FFII even existed...

"We are not asking for a "weaker patent system", but for a limit to its applicability."

Yet another excellent example of focusing on a secondary effect and missing the primary one.

You want to eliminate certain technologies from patents, but you don't see yourself as asking for a weaker patent system, at least with respect to your industry of choice. Are you ignoring the elephant in the room?

I think you make my point precisely.

I was referring to the usage of "weaker" in your original blog post, i.e. Microsoft asking for limiting damages. If you see the patent system as some God given right which should be allowed to expand to pretty much wherever certain people might want to obtain patents, then indeed limiting its applicability can be seen as weakening.

"I think you make my point precisely."

You made mine as well, by (once more, I know I'm repeating myself) refusing to address the actual economic issues and considering the patent system as a goal in itself and which is under siege. I think that's the elephant which is preventing you from understanding our supporters and driving force.

We really don't see the patent system as our enemy which must be weakened and destroyed. We're looking at the economy and innovation. And we see that patents don't help there for software-related innovations. So we don't want patents there.

You seem to think we hate the patent system, then went to look for a place where there's some controversy about patents and now are trying to rally a troop to slowly but surely get rid of it.

As I said earlier, if it weren't for the attempt to codify software patents in the EU, I would never have been posting on your blog. I would probably, like many people I assume, only think about patents in the sense of dreaming about making that one super invention, patent it and get rich while sitting on my lazy behind.

It really is not my goal to destroy people's dreams. But in case of software patents, it just turns into a nightmare all too often due to all the incremental innovation, standing on not just shoulders but pyramids (http://haas.berkeley.edu/~shapiro/thicket.pdf), the huge amount of independent players, high transaction costs of patents compared to the low entry cost, standards and networking effects etc

The value of not running the risk to be sued for infringement is just many times greater when considering software development, than the chance that you may win in the patent game (because of the reasons in the previous paragraph, as demonstrated by countless economic studies).

"You want to eliminate certain technologies from patents, but you don't see yourself as asking for a weaker patent system, at least with respect to your industry of choice."

I agree. The proposed so-called patent reforms do weaken ALL patent protections.

Ronald J. Riley,

The Alliance for American Innovation, LLC.,
Grand Blanc, MI 48439
Direct (202) 318-1595

Also President www.PIAUSA.org & Executive Director www.InventorEd.org

Maybe another remark regarding the "weakening": I have already met a few patent attorneys who support our campaign because they actually see it as strengthening the patent system on the whole.

They do not necessarily agree with our thesis that problems with patents on software innovations are due to the inherent nature of said innovations, but they do think that the patent system for some reason cannot deal with software patents, with the following consequences:

a) a huge amount of patents which gets issued, resulting in some kind of patent inflation (the value of individual patents diminishes, especially as defensive tool)
b) emergence of many pure patent-holding companies which threaten their existing clients (which do produce products, possibly not even directly software-related but merely under software control -- software patents have reach also outside the pure software development sector)
c) large companies staging attacks on the patent system (as you note above) because it is starting to backfire to them as well
d) potential usage of the software patents debacle by groups which do want to get rid of the patent system as a whole

(note that the above are not my arguments against software patents, although I definitely agree with b) and can perfectly understand the other fears)

Keeping that part of innovation off limits for patents would probably improve the image of the patent system. And who knows, one day they actually might find solutions for those problems. I do not think that is possible with the patent framework as currently dictated by TRIPs, but who knows...

Anyway, I see myself more as protecting the patent system from collapsing under its ever expanding reach into regions for which it isn't suited (for whatever reason, opinions are quite divided on that count), rather than someone who tries to undermine or destroy it.

I would like to say to patent lawyers that I am happy to live from software programming in Europe, and that I really fear the coming directive.

With software patents, *nobody* can garantee me that I have legal certainty over the lines of codes I write every day, and this conclusion is true for any software produder, big or small.

Someone with a patent can come and kill my project and all my time invested into.

That's reality. Software patents do not protect investment. They only protect patent owners, not the *real producers* like me.

What does 'weak' mean? I think we shall rather focus on 'precise tools'. Patent law is an economic sledge hammer. Wider scope,'more' protection is a weak strategy that plays in the hand of patent attorneys.

I cannot think of anything more cowardly than having something to say but not putting your name next to it.

It may be coward not to use one's real name while stating one's opinion, but it sure is hypocrite to bash on "Anonymous Cowards" while allowing them to post on your blog.

Do you accept thoses posts only for the pleasure of some cheap bashing, or do you have trouble with your blog configuration and are not able to prevent anonymous posts ?

I considered not approving the anonymous postings, but then I figured that the anonymous posting negates their arguments altogether.

However, I am leaning to the side of not accepting anonymous postings at all.