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: Tue, 6 Oct 1992 07:13:14 GMT

In article <id.TFST.9F7@ferranti.com> peter@ferranti.com (peter da silva) writes:

>OK, so what if I'm writing software and distributing it on a non-cash
>basis (public domain, shareware, freeware, GNUware, ...)?

Public Domain probably wouldn't be allowed if you were using clearing house
derived materials--you can't appropriate someone else's work and strip
it of their initial licensing, allowing someone else to then pick it
up and sell it for a profit without paying the originator or clearing
house the proper royalty.  But you could use it for your own personal
benefit for free. Freware would have no revenues and since in this
proposed model the fee is based upon annual revenues a freeware
distributor would have no usage fees. Similarly for GNUware (as long
as FSF doesn't collect royalties. By shareware, I assume you mean a
system where payment for use is requested but not enforced.  Here you
would have revenue, and consequently royalties due.  But the amount of
the royalties could be based upon the actual amount received--so if
you don't sell many you don't pay much.  If the money is rolling in,
you would pay more--the same as any other commercial member.

>> very important to acceptance.  Getting that kind of widespread use
>> (via commercialization) may be a societal benefit.
>
>But software patents don't contribute to that use. That's based on
>copyrights, licenses, and contracts.

I've stated elsewhere why I believe that patents may indeed contribute
to such a societal benefit by giving protections that incent
investors. Copyrights are another way as are trade secrets.  The
incentives may be cumulative across all three.  Contracts and licenses
generally rely on one of these three and are merely the means to
mediate some of that protection.

>> >Can you come up with a single example of how a software patent has had
>> >any positive effect? 
>
>Yes. And, by the way, it has to be due to a patent, not a copyright. And
>it has to be demonstrably due to the fact that the software was
>patented.
To whose satisfaction? Since all works of software are also inherently
copyrighted, will you automatically deny ANY offering because they
have both protections? What kind of causal chain would you consider
demonstrably would show this?  Perhaps if I knew I could suggest a
case with that kind of proof.  But if there is no causal chain that
you would accept then I suggest you are not really being open minded
to this, and there is no point trying to pursue this line.  

In any case, I am not trying to PROVE software patents are good. That would
be to take a software patent advocate position, and I don't hold that.
What I am saying is that  software patent advocates have not PROVEN
they are bad.  Basically, I'm undecided about the question.  But I
realize that much though patent opponents think it is unfair, the
reality of our legislative system will require them to prove the
status quo is bad, rather than patent advocates having to prove the
converse. I can sympathize that this is not fair, but opponents will
have to improve their argument if they are to get it implemented and
not just debated.


>> What about a single example of how absence of a software patent had a
>> negative effect? 

>Demonstrate that that's all that stood in their way.

Same as above. I'm not trying to persuade anyone that software patents
are necessarily good, only that it is not unreasonable that they may
have had good results, and that there absence may have lead to bad
results in some occasions. I'm not trying to prove the much more
difficult advocates position, which I agree that even they haven't
done a good job at proving. In my personal opinion there is reasonable
(as opposed to incontrovertable) evidence in favor of some individual patents
(or their lack) benefiting and others hurting society, as well as a
balance of evidence for the more general case of combined benefits and
costs. That doesn't help the software patent advocates in a debate,
but it in lawmaking where status quo has a special preferred position,
it may be sufficient to dissuade lawmakers from fundamentally changing
the laws in question.

>Yes, but how many software patents have been granted? When did they
>really start showing up? How many are out there?

The answer very much depends on what you call a "software" patent.  Is
the Diamond vs. Diehr patent a software patent? Are the XOR and
backing store patents software patents?  If so, it appears that they
have been applied for since the early 70s. Several awards for
"notorious" software patents were in the early 80s.  Nearly half of
the life of the patent is already gone (longer for those awarded in
the 70's) and the combined revenues of all software firms continues to
grow each year, even in the face of a recession. This is not what you
would expect if anti industry pressures were becoming more dominant.
You may hold that disaster is a little farther off.  Legislators may
react by wishing to wait until there is more clear evidence that the
industry is dangerously hurt, and not just theoretically could become
so.  Laws are generally made around very practical requirements with
costs and benefits clearly in evidence, and not so speculattive. Don't
give up the fight because of this, but realize it will be hard to
achieve much progress until the crisis hits; our government is much
more motivated by solving crises than avoiding them.

>> You
>> posit an effect that so far is taking over ten years coming,
>
>It's already started. Look at the XOR patent, and the Pike patent.
This is merely to the alleged cause, the alleged affect is that the
software industry will wither and die. Unfortunately the alleged cause
is demonstrated, but there is counter-evidence for the alleged effect.
You can only predict that it WILL come, not that it HAS seriously
undermined the commercial viability of the industry.

>What is it you're licensing? pixel = pixel XOR mask?
From the licensee's standpoint he is licensing the CAPABILITY to
clearly show a bitmap cursor against a varied background. pixel=pixel
XOR mask is merely the implementation. This is like the difference
between the algorithm and the program. How it does it vs. what it accomplishes.

>And what happens when you distribute the source? You potentially
>contaminate people using a different clearinghouse?
>
>The whole thing is a mess.

If you distribute source, the source would be subject to the licensing
conditions of the clearinghouse--namely that if someone else uses it
and collects revenues a portion is payable to the clearing house.  I
would point out that this is no different from distribution of source
for copyright protected programs.  If I distribute GNU sources, the
recipients are bound by its license agreement if they use it too. I
see no difference whatsoever from a licensing standpoint. (Or are you
claiming that GNU licensing is a mess too?

>Well, you can try not *creating* problems in the first place. I'm
>still waiting for proof that any software patent anywhere has had a positive
>effect for society as a whole.

Well, then you start from a biased position.  I'm trying to start from
a neutral position and trying to see which side has more compelling
evidence. Evidence on both sides is anecdotal and subject to
alternative interpretations.  Financial incentives to capitalists to
encourage innovation has reasonable evidence.  Not incontravertable,
but it is not a big step of the imagination to interpret various facts
about new business formation in the software world that way. There is
some evidence that some patents have been abused in an unfair
competition way (supporting anti-patent positions)--again not
incontrovertable but reasonable).  In any case, I didn't create
patents in the first place.  I was born into a world that had them. I
was born into a world that didn't used to make a distinction between
a step by step physical process recorded on a clipboard, and one
recorded in bits in a general purpose digital computer.  Now you
propose that distictions be made.  If there was a time when software
patents weren't possible that time is long since past.  Rather than
ignore that fact and pretend the US patent system worked the other
way, I am looking at the (new?) status quo and commenting on whether
there is sufficient evidence to get lawmakers to change it. 

>And I'm not saying the legal system is unimportant. I strongly support
>software copyrights, and have had heated discussions with many of the
>people opposed to patents on this topic. I'm simply saying that software
>patents (patents on algorithms per se, as opposed to patents on applications
>of an algorithm to a problem) are solving a non-problem.

I don't believe that patents on algorithms per se are granted or
upheld. I believe that patents that have been granted are only on
applications of those algorithms.  Some patents claim a more broad
application than others. The patent we have been talking about, XOR,
is a good example.  It is a patent about the application of an
algorithm to a particular domain graphical display of cursors in a
bitmapped field.  It doesn't prevent you from using XOR in a truth
table. (There may be other faults to the XOR patent such as
non-obviousness or prior art, but it is fairly clearly  about the
application of an algorithm and not about use of the algorithm itself.

>Also, this distinction between object and application exists elsewhere in the
>patent system (reference my previous message about Watt and the treadle:I can't patent the crank in general, but I can patent the application of the crank
>to steam engines).  Why not here?

Indeed, Why not?  I think it can, should, and does--if you read the
prosecuted cases.
-- 

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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