From: mcgregor@netcom.com (Scott Mcgregor)
Subject: Re: Patents:  What they are.  What they aren't.  Other factors.
Organization: Netcom - Online Communication Services (408 241-9760 guest)
Distribution: usa
Date: Mon, 5 Oct 1992 22:24:42 GMT

In article <RLK.92Oct3100609@underprize.think.com> rlk@underprize.think.com (Robert Krawitz) writes:

>etc.  You didn't say anything about what sorts of programming projects
>you've worked on in a technical capacity, but it sounds like most of
>your recent experience has been on large projects rather than smaller
>onex.

I've worked on systems in a technical capacity that ranged from a few
1000 lines to a few 10,000 lines of code that I was personally
responsible for.  I've managed larger projects (a configuration
management product), >100,000 lines, consulted on the Government
Guarranteed Student Loan System (> 1,000,000 lines) and managed
development of part of the Atherton Software BackPlane (> 1.25M
lines). However most of that work was on "Tool Integrations" which are
stand alone applications in the 1-10K range. I would say that more of
my work has been small applications and utilities in nature than has
been systems, but there has been some of each, of large, medium and
small sizes.

>I have no experience managing software businesses, negotiating licenses,
>etc.  I'll freely admit that my experience has been in writing and using
>software.

There is nothing wrong with having limited expertise in manageing
software businesses, negotiating liceses, etc.  Writing and using
software can be quite enough to make an enjoyable life.  However,
I brought this up, because while people who program a lot can comment
credibly on the amount of algorithms in their code, they may be
overestimating the difficulty of licensing, or the necessity of
certain legal steps if they haven't had much experience with
negotiating a license or with choosing a business law strategy. A lot
of the proposed reasons for scrapping software patents, and for
claiming that software is different from other disciplines seems to be
based upon assumptions about licensing and business law--that many of
the authors appear to have less expertise with. I think this is what
weakens their argument, and why I keep suggesting that they improve
their claims there because they aren't near as creadible to someone
with licensing and business management experience.  This is all the
more important if the speakers are trying to make public policy rather
than just state opinions because Legislators, PTO, and judges are more
likely to consult people with this kind of background and not just
programmers before making a decision.


>Once again, I don't believe that Lotus would be particularly happy with
>the FSF using its (Lotus's) spreadsheet patent to cut into Lotus's
>sales, even if the FSF were to realize zero revenue.  Rather than trying
>to extract damages, Lotus would simply try to put the FSF out of
>business.  That way they wouldn't have to worry about competition.  

Lotus might not be happy with it, but might have to put up with it to
get the benefit of the rest of fees from licensees (such as Microsoft
or Borland) who might be making much more money and having more effect
on Lotus's bottom line.  Business is full of such tradeoffs. Lotus
might even actually be a big supporter of FSF if they use gnuemacs a
lot. I don't presume to know. But if Lotus has it out for the FSF,
they have many legal and extra-legal ways to do so. Sticking to the
legal ways, Lotus could claim that authors of FSF code had broken
Lotus's license agreement--reverse engineered protected trade secrets
and contaminated the FSF code.  Mind you this might be an entirely
false claim, but it could lead to an injunction agains the FSF, tie up
a lot of its people, etc. It could drag on for a long time. You don't
have to be able to win a case to file in this country.  You can still
cause a nuisance if that's what you want to do with your time. (Of
course, the flip side is true too, FSF can be a nuisance to Lotus by
a frivolous suit). You don't need patents to do this. There are lots
of other laws you can use to generate such a suit. Any time you
distribute any product you make, whether for sale or for free, whether
software or physical item, you open yourself up  for the possibility
of a suit.

So why aren't there more such suits?  Is it because software patents
are new? But what about in other industries where patents are old? Why
aren't more individuals in those industries regularly pestered in such
ways? I think that the reason has nothing to do with patents, but has
more to do with why people are in business, what a court case can do
for you, and anti-trust lawas.  In general, most businesses are in
business to make or sell a product.  Anything that distracts a lot
from that major goal is not eagerly pursued. Nuisance suits take a lot
of energy and so generally aren't pursued unless very lucrative (which
in general means a $1M organization, not an individual). Second, a
court case can maybe get you an injunction or maybe some damages--but
if the person you are sueing doesn't have much resources you're not
likely to get awarded very big damages or be able to collect them even
if awarded.  Simply stopping the other guy may not be sufficient for
you to recoup the sales you lost--they may just choose not to buy
anything--so for this reason companies are more likely to sue other
companies with money, rather than foundations like the FSF, or
individuals.   Lastly, if your practices against your competitors are
too sharp (either by sueing them or in other ways) you risk a criminal
anti-trust suit being filed against you.  That's much more serious.
Whether you have a patent or not is likely to be immaterial to the
justice deparment or courts. One of the reason that AT&T and IBM so
widely license patents is for this reason.

> Same way that non-profit radio stations still have to pay royalties.
Whether a patent clearing house would choose to have th FSF pay
royalties is up to its members. One big difference between non-profit
software firms in general and the FSF in particular is the cost for
the software they charge.  A non-profit software organization might
still charge money for its software, but only to recover expenses.
The FSF might give away software for free. If revenues are based upon
sales price  * volume then the FSF might have a big volume but zero
price and be exempt.  Or maybe they do have to pay some amount based
upon volume. Public radio in the U.S. asks listeners to contribute to
cover their costs. Would you not be willing to send in a few dollars
to help the FSF risk free access to thousands of software patents?

>Well, I don't see why for-profit organizations should receive help over
>non-profit organizations.

I don't either, I think that the focus of benefits for the clearing
house shouldn't be on for-profit vs. non-profit, but for member (vs.
non-member) organizations and individual.  The clearing house should
benefit its members (by simplifying and reducing the costs of
licensing). The benefit to society is that it continues to get the
benefits of the puported benefits of the patent system for a much
lower utilization of societal resources. (If you don't believe that
there are ANY benefits to patents you probably don't care--if you
believe that the balance of cost to benefit is wrong this goes to
improving things in through same benefits at lower cost.)


-- 

Scott L. McGregor		mcgregor@netcom.com
President			tel: 408-985-1824
Prescient Software, Inc.	fax: 408-985-1936
3494 Yuba Avenue
San Jose, CA 95117


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