Not to speak of being essential for start-up firms that wanted support from venture capitalists.

Mr Levine, i hope you can accept bellow comments on the points in the letter you link to.

"The financial cost of defending yourself against a software patent claim are impossible to overcome. Just to analyze whether the claims being made against you are justified will incur legal fees in excess of $50,000.00, and more than $1 million in legal fees before trial. Yet it costs the price of a postage stamp for a software patent holder to make a legal claim against you"

Why not then ask for a patent licence in stead of copying ilegaly ? Maybe it is more economic. We all would like to have bread or milk or any other product for free, but since its a crime, we pay for it.

"Economic research demonstrates that software patents are acting as a drag on the US economy"

Considering that software is one of the most powerful and competitive US industries, highly doubtfull. But patents might act a drag to lazy commodity developpers unable to improve the state of the art...

"Programmers - those skilled in the art of writing software, would be expected to benefit from, and support the patenting of software. They do not. They uniformly despise them as a limitation on their art" & "With well over 200,000 software patents having been issued, non practicing entities and hedge funds are buying up tens of thousands of these trash patents and using them to extract hundreds of millions of dollars from US companies. This activity takes the form of a protection racket."

This two points are in contradiction. If the programmers are uniformly aagainst patents, who the hell has applied for well over 200,000 patents ?

"Venture capitalist like me, who work with new innovative start-ups can testify that software patents have a chilling effect on the market"

No doubt the person who writes this letter is a venture capitalist, i would say a great one. From his web page: "Notable companies that Brad has invested in and/or sat on the boards of include Abuzz (acq. NYT), Anyday.com (acq. PALM), Critical Path (CPTH), Cyanea (acq. IBM), Dante Group (acq. WEBM), DataPower (acq. IBM), FeedBurner (acq. by GOOG), Feld Group (acq. by EDS), Harmonix (acq. VIA), NetGenesis (IPO), ServiceMagic (acq. IACI), and ServiceMetrics (acq. EXDS)". A question: did all these acquired companies protected their industrial or intellectual property assets with patents yes or not at the time of the acquisition ? I guess they did. Do you know that IBM, Google are big patent holders (not necessarily software patents). I guess you know. So why do he complains today of a system that was highly benefitial to him in the past ?

In conclusion, as i have already argued in this blog: --the point of patents is not encourage innovation, it is publication of innovation in order to make, first innovation an equal game (every body involved shares the same information) and second an efficient activity (avoiding duplication of work once something has been discovered). --but patent system could be greatly improved deepening the liberal model, that is granting unlimited intellectual property in scope and time, as any other property. In these conditions, patents will not only not kill innovation, but accelerate it so that we reach the technological optimum.

P.s. Beeswax, for the reason explained at the end of this thread,

link here

i won´t answer you. I hope you can understand it.

PooPatentTroll writes:

"The financial cost of defending yourself against a software patent claim are impossible to overcome. Just to analyze whether the claims being made against you are justified will incur legal fees in excess of $50,000.00, and more than $1 million in legal fees before trial. Yet it costs the price of a postage stamp for a software patent holder to make a legal claim against you"

Why not then ask for a patent licence in stead of copying ilegaly ?

Oh my God. Are you really this dense?

Nobody actually "copies illegally" when they run afoul of a software patent. They just have a problem, code a solution that they independently devise with their skills, and then get sued.

The problem here should be obvious: if people are frequently independently reinventing the technique that got patented, then it's not nonobvious enough to deserve a patent. Furthermore, whoever just reinvented it did not do so because of the prospect of getting a patent; they did so to solve an immediate problem and get some software working. So the incentive of a patent is not needed for this particular "invention" to get invented anyway.

Other times they have a problem, use a widely-used library to solve the problem, and then get sued. Of course the library author probably is a reinventor like above. Regardless, the concept of patent exhaustion should apply; the library author might be liable but the downstream users have all acted in good faith and copied from the library author only, with the library author's permission.

Maybe it is more economic. We all would like to have bread or milk or any other product for free, but since its a crime, we pay for it.

If you steal bread and milk from the shop, the shop has been deprived of some bread and milk without compensation. If you independently think up, say, the notion of using a persistent login cookie and a server-side database of billing and shipping information to implement a "buy it now in one step" button on your e-commerce site, you have not stolen or even copied anything from anyone. It's not like you took the "buy it now" button from some other e-commerce site and put it on your own, and now their site no longer has one!

"Economic research demonstrates that software patents are acting as a drag on the US economy"

Considering that software is one of the most powerful and competitive US industries, highly doubtfull.

Is it? I can think of lots of industries that are much bigger.

But patents might act a drag to lazy commodity developpers unable to improve the state of the art...

If you had ever actually done any actual software development, you'd know how stupid you sound when you say things like that.

It's "lazy" to not reinvent every single wheel, from the logic gate and compiler on up to your own image compression schemes, your own memory management system, your own UI widgets, and so on?

Forcing everyone to reinvent everything from scratch would be a drag on the software industry and, most likely, on the entire US economy.

In software, the state of the art is improved either by using existing, commonplace components to build something new by using them in a novel arrangement, by improving on one of them, or by inventing a new component. Patents inhibit all but the third means of improving the state of the art, and when you realize that whole arrangements of components at one level are the individual components at the next, it becomes apparent that patents inhibit the third, too.

"Programmers - those skilled in the art of writing software, would be expected to benefit from, and support the patenting of software. They do not. They uniformly despise them as a limitation on their art" & "With well over 200,000 software patents having been issued, non practicing entities and hedge funds are buying up tens of thousands of these trash patents and using them to extract hundreds of millions of dollars from US companies. This activity takes the form of a protection racket."

This two points are in contradiction. If the programmers are uniformly aagainst patents, who the hell has applied for well over 200,000 patents ?

Lawyers. Greedy corporate executives. Trolls.

Read a software patent sometime. You'll find that it's written in legalese, not computer code of any sort. Programmers do not write them, and those who do frequently do not understand much about programming, though obviously they have consulted someone who does.

"Venture capitalist like me, who work with new innovative start-ups can testify that software patents have a chilling effect on the market"

No doubt the person who writes this letter is a venture capitalist, i would say a great one. From his web page: "Notable companies that Brad has invested in and/or sat on the boards of include Abuzz (acq. NYT) ...

I smell an ad hominem argument coming on. Those bore me. Moving along...

A question: did all these acquired companies protected their industrial or intellectual property assets with patents yes or not at the time of the acquisition ?

Okay, maybe not quite so boring. The answer is simple: patents are often held for defensive purposes, as a deterrent, much like nuclear weapons. Mutual assured destruction. Did any of these companies actually litigate one of their patents, other than in retaliation after being sued?

I guess they did. Do you know that IBM, Google are big patent holders (not necessarily software patents).

Did you know US, USSR were big nuke holders from 1950 to 1990? Yet they never actually nuked each other.

I guess you know. So why do he complains today of a system that was highly benefitial to him in the past ?

Beneficial how? Those companies had to divert funds that could have been spent on R&D, marketing, hiring talent, or whatever on acquiring patents instead so they could deter other patent-holding companies from suing them. Abolish the whole system and the problem goes away.

Ask yourself this. Would it have harmed the United States if, in 1950, someone had somehow abolished the ability of plutonium to chain react? It wouldn't have affected the nuclear power plants -- those use uranium. But all their bombs would have become duds. So would the Soviet bombs, though, so the US bombs would not have been needed any more as a deterrent.

You know what the likely actual result would have been had this somehow occurred?

A big sigh of relief. In both countries.

In conclusion, as i have already argued in this blog: --the point of patents is not encourage innovation, it is publication of innovation

Not needed for software. A lot of software is widely distributed; furthermore, hackers routinely teach each other new tricks, all without needing a patent incentive. Software patents are a fairly new thing; decades of advances in software took place before anyone ever held a software patent.

Open source is a much, much better system for getting software published, including the source code, and thus of ensuring that innovations get published.

in order to make, first innovation an equal game (every body involved shares the same information) and second an efficient activity (avoiding duplication of work once something has been discovered).

Patents spoil both of those things! Patents make it a vastly unequal game. Having more patents gives you an advantage (bigger nuclear stockpile). So does having more money, to buy or license patents and to pay lawyers. As for "everybody shares the same information", everybody effectively has to ignore and not use certain information unless they pay up! That's the same as enforcing ignorance, with the less wealthy being forced to pretend to be more ignorant. That's hardly "everybody shares the same information". Duplication of work is promoted by patents: if you reuse you have to pay through the nose, so it's cheaper to reinvent the wheel, and usually that will end up in practice as reinventing the square wheel.

--but patent system could be greatly improved deepening the liberal model, that is granting unlimited intellectual property in scope and time, as any other property.

You're insane. That would make the situation much, much worse, not better.

In these conditions, patents will not only not kill innovation, but accelerate it so that we reach the technological optimum.

Nonsense. After a few decades of this, you wouldn't be able to so much as sneeze without owing half a dozen different "rights holders" for their "method and technique for catching boogers in tissue paper", "method and technique for avoiding spreading germs", "method and technique for politely avoiding nailing other people with boogers", "method and technique for removing accumulated mucus from the respiratory tract", etc.

P.s. Beeswax, [implied insult deleted]

No. None of the nasty things that you have said or implied about me are at all true.

In response to the first comment: perhaps Mr. Feld is able to figure out whether the companies he was involved with benefited from patents? If the government allowed people to claim ownership of each others house's I'd be in line to file - that doesn't mean I think that such a law is a good idea.

On a more substantive point - Feld's view is pretty typical of venture capitalists. You can spend your time building products or messing around with lawyers. Successful businesses do the first.

Thanks for your answer Mr Levine.

1. "perhaps Mr. Feld is able to figure out whether the companies he was involved with benefited from patents? If the government allowed people to claim ownership of each others house's I'd be in line to file - that doesn't mean I think that such a law is a good idea".

So, Mr Feld had no choice but to benefit from patent system. Maybe. But patent law (intellectual property (IP) in general) is like democracy. It is not that it is good, it is that the alternatives are worst.

2. "On a more substantive point - Feld's view is pretty typical of venture capitalists. You can spend your time building products or messing around with lawyers. Successful businesses do the first".

That´s a problem of imperfect technological markets. With close to perfect technological markets which i claim are possible (see point 3), Coase theorem would apply and nobody will need lawyers anymore.

3. As a patent holder i´ve debated intensively all this issues in this blog, unfortunately with a noisy adversary and the message might have been lost. There are roughly speaking three extremal R&D models:

--Libertarian: No IP combined with Descentralized R&D, that is no State or Public intervention neither for granting property rights over knowledge nor intervention in knowledge production). If i´ve read correctly your book, that´s the system you tend to support

--Liberal (unlimited (hereditary) IP with hard enforcement combined with Descentralized R&D production and marketing through liquid knowledge markets which will emerge once the unlimited IP stablished)

--Communist (NIP combined with central decision R&D production).

Implemented systems in reality are mixed: a very weak IP protection from the state, and production of R&D part private part public. For instance, according to OECD data in USA Public institutions finance around 30% of R&D.

I think most people would agree that, first the present system is unsatisfactory, and second that the communist model is the worst (except maybe in Europe). Some people claim that we must shift form the present mixed system to the Libertarian, which is the best (your book ?). I claim that, as we did in other fields, the Liberal way is the best and we must shift into it.

To summarize, mixed means technological suboptimum, since basic research is done by inefficient public institutions and no liquid technological market arises (this we know for sure), Libertarian equals secrecy´s rule in R&D and in these conditions the market mechanism can not work, while Liberal will give incentives to everybody to publish any new result as soon as they get it (what would be the incentives for secrecy?), and the market price mechanism will lead R&D.

Unfortunately, economic science is not so advanced so that we can decide about this issue theoreticaly or by simulation (with which of the many agent avalaible models ?). I´m heavy workloaded now, if not i would elaborate all this in a more formal setting and try to publish it.

PooPatentTroll writes:

So, Mr Feld had no choice but to benefit from patent system.

Objection: assumes what you set out to prove, namely, that the patent system is beneficial.

But patent law (intellectual property (IP) in general) is like democracy. It is not that it is good, it is that the alternatives are worst.

Prove it.

"You can spend your time building products or messing around with lawyers. Successful businesses do the first".

That´s a problem of imperfect technological markets. With close to perfect technological markets which i claim are possible (see point 3), Coase theorem would apply and nobody will need lawyers anymore.

We need lawyers to adjudicate disputes over physical property pretty frequently. Why do you think "IP" that behaved more like physical property (no time limits, no fair-use exceptions) wouldn't also need lawyers?

As a patent holder i´ve debated intensively all this issues in this blog, unfortunately with [implied insult deleted]

No. None of the nasty things that you have said or implied about me are at all true.

and the message might have been lost.

By that, you mean people might have grasped my arguments demolishing yours, and come to believe the truth instead of your babble?

Oh, how terrible. That's just too bad, PooPatentTroll.

Implemented systems in reality are mixed: a very weak IP protection from the state

It is certainly not "very weak". Unfortunately.

Some people claim that we must shift form the present mixed system to the Libertarian, which is the best (your book ?). I claim that, as we did in other fields, the Liberal way is the best and we must shift into it.

Of course you do, since you actually being right for a change would be outlandishly improbable.

To summarize, mixed means technological suboptimum, since basic research is done by inefficient public institutions

Basic research will always be done by "inefficient public institutions", whenever its cost puts it out of reach of hobbyists, because big business will never invest in basic research.

and no liquid technological market arises (this we know for sure)

Wrong. In the future one will, on the internet. Data and scientific results will be freely available; there'll be an attention/reputation market rather than money being the currency used for this stuff. Add something substantial, and particularly if you beat others to the punch, and you'll get a lot of attention and a boost to your reputation. Unless you turn out to be wrong of course.

Libertarian equals secrecy´s rule in R&D

??

Nonsense. Double nonsense if "libertarian" removes some disincentives to spreading knowledge besides "IP", such as enforceable noncompetes and trade secret laws.

Liberal will give incentives to everybody to publish any new result as soon as they get it (what would be the incentives for secrecy?), and the market price mechanism will lead R&D.

No, it won't. Your proposed system will stifle all R&D very quickly. After an initial gold rush of patenting a lot of formerly unpatentable things, everything will grind to a halt as it becomes impossible to research anything, or even to do much of anything, without paying a gazillion dollars to a huge swarm of "rights holders".

Consider the research-inhibiting effects of Bayh-Dole. Or the BRCA gene patents before they were thankfully overturned. Multiply by a trillion. Now you get the beginnings of an idea of just how terrible your proposal is, PooPatentTroll.

Incentives to publish any new result as soon as you get it? Publish anything and you'll get sued, probably mainly by "non-practicing entities", probably in East Texas. It's already nearly that bad now in some areas, like smartphone technology. Release almost any product in that field and face multiple lawsuits. And don't tell me "don't steal from the poor starving inventors, license all the patents instead"; nobody making smartphones is stealing or even copying from anyone, as a rule, and the patent holders are mostly not licensing their patents except to each other, using the patent thicket to try to create a cartel, and the costs to license the entire thicket would be prohibitive anyway, and the patent holders are big corporations, half of them non-practicing entities, not "poor starving" anythings.

Unfortunately, economic science is not so advanced so that we can decide about this issue theoreticaly or by simulation

Actually, it is, and the unequivocal results of such science are that patents are bad for business and ought to be abolished.

I´m heavy workloaded now, if not i would elaborate all this in a more formal setting and try to publish it.

Sorry, you don't get a reputation boost from publishing a new theory if you're laughably wrong.

If I were you, I'd keep those sorts of ideas to myself from now on.

Beeswax, besides a bunch of wrong arguments you did a rate of only one

"No. None of the nasty things that you have said or implied about me are at all true."

per comment in your last two comments !!

That´s probably a miracle and would deserve that i lift up my boicot to your comments only for once. Sorry, i won´t !

P.s.

But i could not resist to make a post script.

"Basic research will always be done by "inefficient public institutions", whenever its cost puts it out of reach of hobbyists, because big business will never invest in basic research".

Hmmm...supporting NIP + Public Research makes you definitively a communist in R&D (again, i hope you do not consider this correct name for such a reality an insult). Aren´t you really European ?

"We all would like to have bread or milk or any other product for free, but since its a crime, we pay for it."

We pay for it because it is scarce, otherwise we couldn't have it. The legality or criminality of acquiring bread and milk has nothing to do with paying for it. If it was possible to copy milk and bread (effectively creating the matter ex nihilo or perhaps rearranging cheap dirt into milk), a lot of people would do it even if it was illegal.

"who the hell has applied for well over 200,000 patents?"

Considering how illogical an ineffective the legal system is and how tedious and mind-numbing it is to navigate all the bureaucratic absurdities, it is highly unlikely that programmers do. I'd guess it's the lawyers.

"Do you know that IBM, Google are big patent holders"

I'm sure you are aware that many companies use patents not as something "beneficial", but as self defense. The system coercively disadvantages those without patents.

"But i could not resist to make a post script."

Do as I do: I resist the temptation to even read his comments in the first place, so there is no problem in resisting replying to them :)

Samuel,

"Considering how illogical an ineffective the legal system is and how tedious and mind-numbing it is to navigate all the bureaucratic absurdities, it is highly unlikely that programmers do. I'd guess it's the lawyers"

I was refering to the patent holder, the propietor, the one who pays the lawyer for filling it. I suppose it is either an independent programmer either a corporation which has hired a programmer. In both cases the programmer benefits, either directly, either indirectly, from the patent system.

"I'm sure you are aware that many companies use patents not as something "beneficial", but as self defense. The system coercively disadvantages those without patents".

Well a patent, as any property right, as any right indeed, is always defensive. But i understand what are you trying to say, and that´s truth only in some cases. Or are you supporting the view that corporations such as Google (whose business was built entirely over a patent) or IBM the biggest patent producer in the world are against patent system ?

In any case what i´m defending is a system such that, in the worst case, that is in the case of a selfish agent with a very benefitial result for the community, has incentives to publish it as soon as he gets it. Do you know a better one than an unlimited innovation property system ? I agree that the system is not perfect (is there something perfect in the social sciences ?), that it has drawbacks (picaresque patents), but at least it will provide: equal production conditions (everybody involved in research will have the same information), efficient production conditions (the work will not be duplicated by different researchers) and as a byproduct , i claim (since this system has never been tested i can not know it for sure) it will accelerate innovation. This will be welcomed since, if you look through the apparent fireworks, basic research is going too slow. Instance: we are discussing this issue because economic science does not have a good model such that science and not opinion can decide this issue trough science. To summarize again the message: unlimited innovation property is bad, but limited IP or no IP (=secrecy), for the reasons already explained are worst, much worst.

The sad thing is that because there are picaresque patents, the whole system is discredited. People associate patents with the "double click" type and do not know how hard can it be to get some results and how easy could it be, without any protection system, that others benefit from it just copying. Under this conditions most inventors will leave the field. I know it because i´m an inventor, and without the patent system, i possibly would have carried my invention, a by far not evident result that cost me several years and almost close to half million euros (direct costs and oportunity costs included) euros to obtain, to the thumb.

"Do as I do: I resist the temptation to even read his comments in the first place, so there is no problem in resisting replying to them :)"

You never know how to react with such commenters. And i must admit it was fun until the Hawkings disgusting joke.

PooPatentTroll lied:

Beeswax

So, when you said you weren't going to reply to me anymore, you were lying.

besides a bunch of [insult deleted] you did a

No. None of the nasty things that you have said or implied about me are at all true.

"Basic research will always be done by "inefficient public institutions", whenever its cost puts it out of reach of hobbyists, because big business will never invest in basic research".

Hmmm...supporting NIP + Public Research makes you definitively a [insult deleted]

No, it makes me a realist. None of the nasty things that you have said or implied about me are at all true.

Samuel Hora insulted:

Do as I do: I resist the temptation to even read his comments in the first place, so there is no problem in resisting replying to them :)

Well, that explains why you basically just reiterated things that had already been said (by me).

How silly of you. My comments are well worth reading. They just can get a little unpleasant if you are unpleasant to me.

PooPatentTroll lied:

"Considering how illogical an ineffective the legal system is and how tedious and mind-numbing it is to navigate all the bureaucratic absurdities, it is highly unlikely that programmers do. I'd guess it's the lawyers"

I was refering to the patent holder, the propietor, the one who pays the lawyer for filling it.

Ah. Not a lawyer or a programmer then -- a manager.

In both cases the programmer benefits, either directly, either indirectly, from the patent system.

Of course not. Software patents stifle the creativity and general ability of the programmer by turning programming into a legal minefield. That is not a benefit.

Meanwhile, no programmer that I know of is earning royalties from software patents. By and large they just earn a salary; they don't even collect copyright royalties.

"I'm sure you are aware that many companies use patents not as something "beneficial", but as self defense. The system coercively disadvantages those without patents".

Well a patent, as any property right, as any right indeed, is always defensive.

OH RLY? Then WTF was NTP "defending itself" from when it sued RIM? Keep in mind, NTP didn't even have a product on the market, let alone one RIM competed with. In fact as near as I can tell NTP's business model was "sue people and get rich" rather than "provide a product or service to consumers and get rich". That's a cut-and-dried case of using patents as a sword rather than a shield.

Or are you supporting the view that corporations such as Google (whose business was built entirely over a patent)

Wrong. Google's business is built around advertising, and using quality to get and hang onto market share, not "a patent".

In any case what i´m defending is a system such that, in the worst case,

stifles all innovation from now until eternity. Yes, we've noticed. Presumably it's because you're in one or another of the industries being impacted by disruptive innovation in the tech sector and would like to turn back the clock, or at the very least freeze it, so you won't have to innovate again and can rest on your laurels.

Well, tough.

Sorry, but the world doesn't work that way. Your attempts to hold back the clock are doomed to failure; indeed, the Second Law of Thermodynamics forbids you to succeed.

Do you know a better one than an unlimited innovation property system ?

Real property rights in tangible property, rights to the sanctity of one's own mind and body against assaults of any kind, and very little else enforced. A level playing field. A free (as in speech) Internet. A constant churning ferment of competition and oneupmanship between suppliers in the market. Free access to information, to help limit abuse and "markets for lemons" among other things. An educated and physically-safe populace.

it will provide: equal production conditions

Wrong! The rich and holders of existing large patent portfolios will be favored.

efficient production conditions

Wrong! Everyone will be reinventing the wheel. Moreover, with the round wheel patented, the next company to need wheels will invent a square one, and patent it, and the next company will use triangular wheels...

i claim (since this system has never been tested i can not know it for sure) it will accelerate innovation.

Well now at least you're admitting that you might be wrong. The next step of course is admitting that you are wrong.

basic research is going too slow.

It's probably going as fast as it can in the current economy. Remember, basic research is limited by available tax funds, most of the low-hanging fruit have long since been picked, and there are higher spending priorities for governments right now; that, and private industry will almost never finance basic research.

economic science does not have a good model such that science and not opinion can decide this issue

Wrong.

unlimited innovation property is bad

I'm glad you've finally realized that.

The sad thing is that because there are picaresque patents, the whole system is discredited.

No, it's discredited because person A bringing some papers to government office B five thousand miles away can somehow make it illegal for me to arrange some nuts and bolts in my garage in certain ways, at least without my paying person A, even if the nuts and bolts and garage are mine and I think up the arrangement entirely independently.

That state of affairs is just plain ludicrous.

People associate patents with the "double click" type and do not know how hard can it be to get some results and how easy could it be, without any protection system, that others benefit from it just copying.

And why shouldn't others benefit from it?! Their doing so doesn't diminish your benefit. If you invent a better engine and put it in your car so it goes faster and farther on less fuel, someone else copying that engine in their car doesn't make yours suddenly slower again or needing more fuel.

Under this conditions most inventors will leave the field.

No. Otherwise the first thing to ever be invented wouldn't have been fire, or the wheel, or whatever it was, but rather the patent.

I know it because i´m an inventor, and without the patent system, i possibly would have carried my invention, a by far not evident result that cost me several years and almost close to half million euros (direct costs and oportunity costs included) euros to obtain, to the thumb.

To the what?

Well at least you're admitting you're biased. Though I don't see what benefit you'd have gotten from secrecy.

You never know how to react with such commenters. And i must admit it was fun until the [false accusation deleted]

No. None of the nasty things that you have said or implied about me are at all true.