/ Technology

Tech ‘patent wars’ are bad for consumers

Patent on crossword

In recent times the likes of Google, Apple, Microsoft, HTC, Samsung and many more have locked horns in increasingly bitter patent disputes. Does this matter for consumers and what could the long-term implications be?

Even a hardened tech fanatic like me can’t help but groan at patent disputes. Patents are effectively a means of claiming ownership of a particular feature or way of doing something.

And most of the time companies will simply license the use of their patents to others. For example, both Apple and Google license Microsoft’s system for syncing email and contacts on a mobile. Money doesn’t always trade hands – sometimes companies trade the use of each others’ patents.

Sometimes, however, things get ugly. High-profile patent disputes used to be the domain of so-called ‘patent trolls’ – small companies that existed purely to patent ideas and sue those they believed infringed them for a profit. In the past, larger “legitimate” companies normally negotiated with each other and only occasionally came into conflict.

Now, though, the industry’s biggest companies are at each other’s throats, disputing patents left, right and centre. And they’re taking their disagreements public.

At the centre of it all is Google’s “free” Android operating system, which Google now claims is being victimised. Is this true and what does it mean for the man of the street?

Google: Apple and Microsoft are patent bullies

Google recently published a highly unusual attack on Apple, Microsoft and others for what it deemed anti-competitive activity. David Drummond, Google’s chief legal officer, said:

‘Android’s success has yielded something else: a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents… our competitors want to impose a “tax” for these dubious patents that makes Android devices more expensive for consumers.’

His complaints centre on bidding for a large patent portfolio. Apple, Microsoft, Oracle and others formed a consortium to bid for the patents, and outbid Google with a $4.5billion offer. Microsoft is now seeking license fees of $15 per Android device from Samsung, putting a price on what Google offers for free. Google feels this is unfair.

Not the whole story

If you believe Microsoft, however, Google isn’t being entirely honest. In fact, Microsoft claims it invited Google to join the patents consortium, but Google refused. A Microsoft employee went so far as to publish Google’s rejection email. The implication being that Google wanted the patents for itself, rather than sharing them with competitors. .

Further embarrassment has been heaped upon Google in its patent dispute with Oracle, however. Internal emails appear to reveal Google knew it was infringing on patents in Android and chose not to take a license.

This, and the revelation from Microsoft, has led many to accuse Google of wilfully infringing on patents. It’s Google’s fault, they say, and it’s paying the price of a risky non-conformist strategy.

What does it all mean for you and me?

Such disputes might keep the tech commentators busy, but for ordinary consumers, like you and me, it is a complete turn-off. Many of the problems are caused by the US patent system, which is widely regarded as flawed – but why should we care?

Google is correct in saying that these patent battles could lead to higher prices for consumers. Indeed, Microsoft already makes money from every Android phone HTC makes. It’s reasonable to believe this cost has been passed on to you and me.

However, even worse than higher prices, such disputes could have implications for smaller, innovative companies. If it’s so easy to patent ideas and concepts, even if you don’t use them, what are companies who are trying to make innovative products to do when they come up against such barriers?

Google is by no means the innocent party in this dispute, but its squabbles with rivals are symptomatic of a much larger problem; a problem that makes it increasingly difficult for new and emerging companies to succeed, resulting in less choice for consumers.

MetalSamurai says:
6 August 2011

After a little back and forth on twitter earlier I was going to write a short piece on why patents are harmful and actually prevent innovation, but ran out of time.

Instead here are sone links. Read them. Get the Consumers’ Association to campaign against patents, especially the pernicious software patents that many big companies are spending millions on lobbyists to buy the ears of MEPs.



For followup research, just google for each of these terms “patent thicket”, “Lodsys”,”Nathan Myhrvold”, “Intellectual Ventures”, “patent trolls”.

MetalSamurai says:
7 August 2011

And then this morning another meta-article on the subject, full of useful links


Glyn Moody says:
7 August 2011

Great to see “Which?” addressing this. Patents are supposed to be a fair bargain with society. In return for a government-backed monopoly, a company offers the public innovation that wouldn’t otherwise have seen the light of day. That might have worked in the 18th century, but as the smartphone market shows, doesn’t work today.

Most of the patents in question are obvious (that’s why everyone is infringing on them – they are just basic technology that everyone would naturally use), but are being employed by the company that managed to obtain that patent as a way to impose a tax on all the other players.

As well a stifling competition, that means that we, the public, are being forced to pay for something that was obvious. In other words, it didn’t need the monopoly incentive, and it is unfair that we must pay this tax anyway because of the broken patent system that grants such trivial and obvious patents.

Dennis D. McDonald says:
7 August 2011

And, make sure you listen to this episode of This American Life, “When Patents Attack”: http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack

Mark Goodge says:
7 August 2011

Given that yesterday was the 20th anniversary of the web, it’s worth noting that we wouldn’t even be reading this if CERN and Tim Berners-Lee had taken a restrictive approach to intellectual property when they created it. It’s in the public interest to promote innovation by means of an open approach. http://mark.goodge.co.uk/2011/08/happy-birthday-worldwide-web/

Lawrence D’Oliveiro says:
7 August 2011

Patents were never about invention, they were about monopoly. The original “letters patent” were a grant of monopoly from the king for something basic but essential, like the manufacture of salt. With such a grant, you could make a fat profit, and anybody who tried to offer a cheaper alternative would have their operation broken up by the cops. And of course, in return for that grant, the king got his cut.

Later, when Parliament took the power of granting patents away from the king, instead of getting rid of it completely, they added “invention” as the excuse for granting these monopolies.

In short, patents are a hangover from a monopolistic, mercantilist era. They have no place in a Capitalist society.

PeteDA says:
7 August 2011

Patents stifle innovation, development and competition. Software patents doubly so.

Andrew Robinson says:
7 August 2011

The justification usually given for the existence of patents is to ‘protect the little guy’ – the lone genius who has a great idea and founds a company around it – from getting ripped off by big corporations. The problem is that our current patent system has grown into something that actually achieves the exact opposite. It stacks the odds strongly in favour of big corporations who can buy into the sort of patent exchange clubs described in the article. So many broad, vaguely worded patents are being granted that it’s impossible for the little guy to manufacture anything (great idea or not) without the threat of litigation for patent infringement, and patent litigation is such a long, expensive process that the best strategy is usually to give in and pay up, even if you are right.

I suggest readers go to the USPTO website, pick any patent at random, read it, then ask themselves these questions:

1. Do you understand exactly what’s covered by the patent?
2. Do you think it contains only genuine, clever, ideas that nobody else has ever had?

I’m willing to bet that the answers will be no, and no.

Now consider that there are literally millions upon millions of these patents, each effectively being a law that says “you cannot do this”, and answer one more question:

3. Would you feel safe from patent litigation if you started up a small business tomorrow?

I’m not against protecting the little guy, or against rewarding inventors, in fact I’m all in favour of these things that the patent system was designed to do, but the system we have in place at the moment doesn’t achieve those noble goals.

Nigel C says:
7 August 2011

I am a software professional/researcher with a main interest area in compression, and I agree with the article and the previous commenters that software patents are damaging innovation in very harmful ways and need to be abolished as a matter of urgency.

There are many stories I could share where patents strangled the promising startup in its cradle or built a minefield around a new technology and made it practically unusable, but I’ll stick to something that has clearly affected everyone and I know a few things about: compression.

Did you know that the JPEG standard defines two slight variations for compression, one significantly more efficient than the other (Arithmetic coding > Huffman coding by around 10% without loss of quality)? 10% may not sound significant, but consider that we are talking about 10% off the size of each single image downloaded by the billion internet users in the world — an unimaginable amount of bandwidth is being wasted because of patents.

Let me explain. After the standard was published, various patents surfaced claiming “ownership” over the more efficient coding method. Since most developers were worried that implementing that part of the standard would open them to patent attacks, the efficient compression was omitted from implementations. At the same time, note that *nobody* has licensed those patents, including the software giants making Windows, Photoshop and similar, let alone smaller companies and FOSS projects. Most of the patents *may* have expired last year, but at the moment most software still doesn’t support the better coding method.

In other words, the patent monopoly in question has delayed progress by 20 years, and we’re all worse off for it.

Compare this to similar stories about GIF (and patent troll Lodsys), MP3 (Fraunhofer), MPEG (MPEG LA LLC) and so on.

In fact, right now there’s a serious patent threat growing from MPEG LA against Vorbis and Google’s VP8 OSS royalty-free audio/video compression formats. MPEG LA, are a private company with control of a patent pool for licensing things like MPEG 2/4 and H.264 (NB: they have no products, their only “products” are licensing patents and suing) and they are trying to stifle open competition by setting up a minefield against new technologies. So far, they have failed to produce any actual patents, but they are spreading FUD about having dozens of relevant patents ready to use against those formats. To make things worse, we won’t know if their FUD is true until they take someone to court, but as you can imagine that leads to risk and a chilling effect on the uptake of new technologies.

And I could go on. I could talk about the patents on wavelet compression that are blocking tons of possible innovations. Wavelets are basic math that has been around for centuries — but stick the word “computer” or “internet” in there and lo and behold a patent monopoly!

The patent trolls and megacorps should have fun with their patent hoarding and trolling, but the inventors and innovators are suffering. Their activities are a net loss for all of us. Please, help abolish software patents.

Doug Winter says:
7 August 2011

As a director of a small software company, I dread to think how we’d function in the US where software can be patented.

The justification for these sorts of monopolies, just as with copyright, is that it protects the little guy – but as one of those little guys I can tell you how false that is. Every piece of work we do would infringe one patent or another in the US, not because we’re thieving copycats but because it’s almost *impossible* to do anything in technology now without infringing something. Much of what we do is just plain obvious, or is the only sensible solution to a problem, and having this subject to patent is daft.

Monopolies are explicitly anticompetitive and they can only be justified when there is strong evidence of significant benefit to society. There are clear cases where patents can do this, but there are many many cases where patents have caused far more harm for everyone than benefit.

Florian Mueller says:
7 August 2011

@Doug Winter: It’s a myth that software isn’t patentable (or that software patents aren’t enforceable) in Europe. Here’s a list of nine European software patents over which Apple sued Nokiain the UK and in Germany (same set of nine patents in either place):

There are differences in litigation rules and litigation economics between the different jurisdictions. But software is patented in Europe on a daily basis. On my blog I follow those wireless patent disputes in detail and when I see patents in action in U.S. litigation, I frequently check for European equivalents. Most of the more recent patents asserted by large players in U.S. litigation also have European equivalents, and the courts here increasingly refuse to declare them invalid just on the grounds of subject matter (if they invalidate them, they will perhaps do so due to prior art or similar reasons, but not on the basis of software being excluded “as such” from the scope of patentable subject matter under the European Patent Convention.)


Great comments above, though a few give too much ground (assuming that patents have a beneficent origin), happy to see Lawrence D’Oliveiro’s to set the record straight. Though I’d add to his that patents have no place in a Socialist society, either. They are rent seeking, corruption, deadweight loss in whatever context.