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source : http://www.adti.net/penguin.html Patents and
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Penguin This isn’t hobbiest stuff – people are basing their livelihoods and the future of the economy on new models of economic production and need to have adequate legal protections in place. We can’t base the economy on “trust” as we only then find out that there are always untrustworthy elements of our society.” Internet consultant Russell McOrmond
The software patent is viewed by both proponents and detractors of Linux as a serious threat to the well-being, and perhaps the survival, of the Linux community. Ironically, this is not only the view of competitors that are eying Linux customers, but leadership within the Linux community itself. While much of the debate regarding Linux and its accompanying license, the General Public License, or GPL, focuses on the provisioning of copyrights, a growing number of observers point to the growing popularity of software patents as a far bigger concern. To summarize, the General Public License (GPL), the contract/license for GNU/Linux software and other open source software requires distribution of the source code for the original program. If you receive a copy of GPL’ed software, you can use it without worrying about the original author exercising any limitations, fees, licenses, etc. The GPL enables developers to transfer the rights of their work to anyone they would like, for the privilege of having the reciprocal use of GPL’ed work. This feature makes selling GPL’ed software inane because anyone that agrees to the terms of the GPL can also have a copy of the same software with the code - for free. However, the dynamic nature of software patenting, something that cannot be governed directly by the GPL, has made it very difficult for the future of open source development to play out predictably. Some issues being seriously considered in both the proprietary and the open source camps include: 1. The Nature of Open Source Development Open source development still very closely resembles its non-commercial past. Open source developers, like many academics, enjoy freely exchanging their ideas, promoting an almost non-business culture when it comes to idea ownership. It is this interest in free exchange which is the principal fuel to open source activity around the world. Unfortunately however, the belief in free exchange characterizes a core disagreement with models (ie. proprietary software) that strive to own and protect ideas, to later leverage their value in the marketplace. Thus, mixing the open source world and the patent world has all the makings of an explosive relationship. “…Patent and open source software are fundamentally incompatible…”, comments Arnoud "Galactus" Engelfriet, a Dutch patent attorney at Philips Intellectual Property and Standards that has written extensively on intellectual property and technology. “The general opinion regarding patents in the open source community is rather negative. The term "software patent" appears to be almost a synonym for "triviality", he comments.1 2. The GPL in a Patent World The software patent is an animal that governs the process or application of a unique idea that is only manifested by code—but is not necessarily the code itself. In contrast, copyright is text and applies to software code only; while a software patent transcends code. The subsequent relationship between the open source community, the GPL, and software patenting becomes immediately complex. The GPL is only one license. There are many licenses that govern open source software. However, the GPL is central point of contention regarding the issue of software patenting because 1) the GPL governs most Linux distributions, 2) in terms of lines of code, the GPL impacts more open source code than any other license,2 3) the Free Software Foundation, the authors of the GPL, have taken a very aggressive stance against software patents, posting a “Preamble” on their website, that reads: … Finally, any free program is threatened constantly by software patents. We wish to avoid the danger that redistributors of a free program will individually obtain patent licenses, in effect making the program proprietary. To prevent this, we have made it clear that any patent must be licensed for everyone's free use or not licensed at all.3 This statement and other similar actions by the open source community are characteristic of a general effort to encourage software patenting to stay within the “GPL world” and think of patents and copyrights interchangeably. “The GPL is a copyright license, not a patent license”, writes, Dan Ravicher, Executive Director of the Public Patent Foundation. “You can't GPL patents, however, software licensed under the GPL comes with an implied patent license to any patents held by the licensor that cover the software, continues Ravicher.” Russell McOrmond an Internet Consultant comments, “While the GPLv2 is not itself a patent license, it does require that an RF patent license be applied to any patents embedded within it in order to have the copyright works properly licensed.” In sum, a significant issue within the debate whether the GPL can effectively indemnify users of GPL’ed software from both the consequences of patent infringement and the liability of worrying about software patents on GPL’ed code. The logic is that if an owner of a patent releases code to the GPL, he should not be able to sue any user, developer or recipient of that code for patent infringement. Moreover, users of the GPL code are forewarned that they cannot patent ideas reflected in code that they received under the GPL. However, even though there is widespread exchange of both ideas and code within this environment, to-date it has not faced any significant legal challenges to test the resilience of the model. 3. Patent Checks in an Open Source World. There is not a process in place that efficiently screens code for patents before it is contributed to the GPL. There is no master list of software patents held that claim an impact or relevance to open source software. This means that to do a thorough patent check on a software idea, it would have to be done individually or by a law firm. This is not a problem unless, you a downloader does not take potential patent infringement seriously. Unfortunately, some developers download open source under the assumption the software is 100% protected under the GPL’s provisioning for copyright and patent transfer. Obviously this is a significant accident waiting to happen. If any downloaded GPL’ed software used for a commercial application infringes upon a currently patented software product, any number of users and entities could face civil damages. Brian Kahin, writes in the, Software Patent Crisis, “Unlike copyright, independent creation is irrelevant to patent infringement. Every developer is charged with knowledge of all patents. Even if someone is not aware of a patent, he or she can still infringe against it. Furthermore, patent applications and the examination process are confidential, so there are ordinarily several years of patents in the pipeline that no search will reveal. Although no infringement occurs until the patent issues, an inventor may find that a newly awarded patent covers a feature he or she has already incorporated and marketed in a finished product.”4 In fact, many in the IT world already suspect that patent holders with large war chests of both capital and patents are eagerly awaiting an unsuspecting company to develop a product using code that illegally infringes on a patent they hold. There is no reason to believe it would not happen to players developing or distributing open source. The burdensome rigor of checking for patents is an expensive, significant undertaking in the proprietary world. It is unlikely that it will be any less rigorous in the open source world. Ravicher advises distributors and developers, “…To avoid patent infringement, first, seek and retain competent patent counsel. If you can't afford to pay, seek pro bono counsel. Second, educate yourself about patents and how the patent system works. Third, show proper respect for, but don't be overly intimidated by patents.” According to Ravicher, open source developers that are discreet and follow the rules, should be able to avoid the hazards of patent infringement. Likewise, developers that are not, are effectively “rolling the dice”. 4. Relying on Defensive Patents Another problem is that the open source community is heavily relying upon companies in the Linux community to patent software to keep them safe from would-be villains that would go after them or their companies. This practice, commonly referred to as defensive patenting, protects both users and developers of open source. As an example, Red Hat, the largest distributor of Linux software, prominently publishes a notification of its defensive patent policy on their website.5 But the problem of course is that a company could always change its mind…right? A Linux community member could have every intention of not enforcing their patent to encourage development, etc. but at the last minute, have a change of heart. Commenting on the Red Hat notification, McOrmond comments, “…note that this is a "promise" and not a license which would be legally binding…This is consistent with the GPL's requirements, so in my opinion is based on politics and not the law …”6 Ravicher continues on this point commenting, “There's no feasible way to analyze all the GPL'd software in the world and then determine what implied patent rights have been granted therewith. There are some patent holders who have opted to expressly license their patents for use in GPL'd software, including RedHat, Secure Computing, and RTLinux. Nevertheless, this is still basically run on the honor system.” Again, this is relatively a new challenge for the open source community, a challenge that many open source proponents feel they should be immune to because they are advocates of copyright-protected open source software. An open source developer that decided to be diligent, to date, has no resource other than traditional law practices and the USPTO to determine how many or even what software patents impact Linux or other GPL’ed software. Between inevitability and plain-old fashioned bad luck, a collision between a good-intentioned Linux developer and a good-intentioned patent holder is an “accident” waiting to happen. 5. The Problem of Open Source and Hardware Open source development is actively flanking proprietary hardware development. New ambitious open source projects are actively competing with proprietary, patented hardware products that depend upon embedded software. Hardware in many ways is more proprietary than software and is often successful in the marketplace due to closely-held patents. Devices depend as much on software as PC’s do, but this software is non-interchangeable and tied to overall ability of the device. Ironically, open source developers and hardware manufacturers are partnering to produce new products with open, programmable features to compete with proprietary hardware vendors. Examples of open source hardware projects include microprocessors, handheld devices and even printers. In an article ironically titled, “Open Source Takes on Hardware Biz” in Wired News,7 CEO Lampret of Open Core Technologies inadvertently spells out the impending conflict between open source software and hardware companies embracing non-proprietary architecture. Wired writer Amit Asaravala opens up the piece writing, “…Distributed with the belief that technology should be free of patents and licensing fees, open-source software has gone from being a part-time hobby for geeks to an industry-threatening operation over the last decade.” In the interview itself Lampret states, "Hardware has always been very proprietary -- even more so than software…But our system-on-chip shows that open-source technology can compete successfully in the hardware space, especially in embedded applications." As this development precipitates, two unique problems for the open source community are on the horizon 1) If hardware manufacturers begin fearing their patented proprietary devices will be competing with open source device manufacturers, how much longer can we expect to see hardware companies such as Hewlett Packard or even IBM stay friendly with the open source community? How long will it be before these relationships go from cooperative to predatory? 2) In anticipation of open source encroachment in their patented hardware space, hardware developers will only speed their development of aggressive software patents, further limiting the playground for open source development. Lampret’s positive thinking provides the reasoning why the open source model and opatented hardware ultimately conflict, commenting optimistically, “Open-source advocates hope they can achieve the same results in the hardware industry by encouraging device manufacturers to incorporate the blueprints for various OpenCores technologies into their own designs, thus saving them time and money on research and development. This, in turn, is expected to lower the cost of hardware and even boost the development of more open-source software…”. Again, hardware companies are embracing open source to rid themselves of proprietary software, but still achieve their standard profits on sale of their proprietary products. Lampret’s vision is that all hardware inevitably becomes dumb to the core, and can be loaded with “free” open source software; which will subsequently lower the price of hardware even more—something that again would be good for the open source movement, but not necessarily great for original equipment manufacturer, or OEM, profits. 6. Total Cost of Development and Ownership of Open Source Open source is inherently an entrepreneur’s best friend. It is a way for a company to set up a business franchise to sell services for ready-made products with literally no start-up cost. Soon however, the rising tide of software patents around the world will inevitably impact the open source community model the way it impacts the proprietary one. At that point, it is no longer a question of “if”, but a question of “how much”. Open source software clients afraid of being hit with patent suits by rival developers will force its vendors to either sign liability disclaimers and/or produce extensive patent searches, before they agree to use supplied open source code. Ravicher explains, “…searching to see if a patent exists that may cover a certain software program, that would take anywhere from 30-80 hours of patent attorney time. Of course, with complexity, it could take even more time. The cost of searching patents is free through the PTO's (Patent and Trademark Office) website, but patent attorney rates can range from $100-$800 per hour.” Assuming that both sides maximized their diligence, the predatory nature of competition within the private sector still means the probability of defending a multi-million dollar patent suit remains a very real possibility. Brian Kahin writes, “The notoriously high costs of patent litigation must be borne by both sides. Just the discovery phase of a lawsuit is likely to cost each side a minimum of $150,000, and a full trial can cost each from $250,000 to millions. Again, these figures do not include internal staff time, which could easily double the real cost. While a small patent holder may be able to secure a law firm on a contingency basis or sell an interest in the patent to speculators, the defendant has no such options.” Otherwise, open source clients themselves will have to do the patent searches, which will only increase the Total Cost of Ownership (TCO) of open source products. TCO issues will inevitably hit small open source entrepreneurs the hardest. However, with only a few prominent cases, a spike in TCO of open source extinguishes its selling point as “free software” to customers. Such a consequence undoubtedly could cause an implosion in the open source community. 7. Open Source Community Gradually Becomes a Proprietary Community The ownership of property or patents inherently sustains the value of companies. As the valuation of the open source companies becomes more scrutinized by the finance community, two events can be expected. First, to keep investors interested in the value and the future of their companies, open source companies will have to file more defensive patents themselves. To outflank their competitors, some even in the open source community, lawsuits will cause these companies to no longer casually approach patents. Second, at any level, defensive companies will become less inclined to make commitments to hold-harmless patent policies themselves. This trend would inevitably devolve the existence of pure open source software companies. Investor pressure, predatory litigation, etc. will transform open source companies into hybrid proprietary companies, some inevitably into pure proprietary companies while firms without intellectual property holdings will slowly be devalued. An example of this can be seen in the Red Hat 2003 Report to their investors. While the beginning of the document reports, “they have defensive patents that they expect to make very little money from…”, later in the financial statement for intangible assets, they claim over $4,000,0000 in assets attributed to its patents, trademarks and copyrights.8 It is predictable that intellectual property ownership will continue to represent itself in the asset column of both public and private open source firm in the years to come. 8. Losing the Software Patent Argument In the United States, software patents have been active part of intellectual property considerations since 1981. After many years of litigation, the U.S. Patent Law was changed to in effect, allow software patents. In Diamond v. Diehr (1981), a sharply divided Supreme Court upheld the patentability of a process for curing rubber that included a computer program. The majority concluded that programs that did not preempt all uses of a computer algorithm could be patented--at least when used in a traditional process for physically transforming materials.9 Kahin summarizes, “Within the last few years, software developers have been surprised to learn that hundreds, even thousands, of patents have been awarded for programming processes ranging from sequences of machine instructions to features of the user interface.” This background is important. While there has been considerable effort by disappointed parties in both the proprietary and open source camps to end the use of software patents in the U.S., a) detractors are fighting against a tidal wave of resistance from thousands of software patent holders, many with considerable financial resources b) to ultimately win, their case must pass the muster of the U.S. Supreme Court. These two realities make it clear that in the U.S., software patents are here for an indefinite amount of time. Meanwhile, the software patent debate has escalated overseas, where some argue the future of software patents in Europe is actively in play. Foundation for a Free Information Infrastructure, or FFII, one of many prolific groups leading the charge against software patent adoption by the EU has been active organizing experts, software companies, entrepreneurs and even investors to stop the European Union from adopting an amendment to its intellectual property rules that many feel would allow software patents. (For more information, see www.ffii.org.) U.S. based detractors of software patents in the open source community are extremely active in Europe as well, partnering with organizations such as FFII to lobby against software patent consideration. Meanwhile, as a strange twist in the debate, IBM, the biggest proponent of Linux in around the world, is reported by FFII as one of the most active supporters of the EU’s decision to change its rules to allow software patents is receiving ire and criticism from Linux advocates around the world.10 The IBM issue is interesting for two reasons. Soon, IBM will be competing with large Linux-based developers and distributors themselves. As the deployment of Linux increases, it can be expected that IBM will be going head-to-head with its “friends” in the Linux community. It is unquestionable that the biggest irony of all will be when Big Blue resorts to using its war chest of patents against a “friend” in the Linux community. Second, IBM is not only the largest player in the Linux community, but the largest patent holder in the IT community, estimated to be receiving over $1 billion a year in license fees and royalties on its patents. It is unlikely that IBM, the “friend” the Linux will allow the open source community to succeed in its efforts to stall or end software patents in the U.S. or around the world; another reason why the Penguin and Big Blue could be on an unalterable collision course. Other Considerations As always, it is easier to overstate than to understate. A number of members of the open source community believe that the commercial model of open source can coexist with software patents. Ravicher writes, I don't expect a patent case to be brought involving an actual open source project any time in the near future, for the pure reason that there would be little for a patent holder to gain from asserting a patent against an open source project. As I mentioned above, licensing fees and the vast majority of open source software don't mix. The defendant can't settle the case, because doing so would force them to kill the project. It would be a "bet the project" case. Therefore, the only benefit the patent holder can get from asserting her patent against an open source project is to kill the project.” Ravicher continues, “...Further, most patent holders don't want to kill projects with their patents. Rather, they want money. For those types of patent-holders, suing a small guy who (a) can't settle for royalties and (b) has little to no money, makes absolutely no sense. Such a revenue seeking patent holder will go after deep pockets, who will, by the fact they have deep pockets, be able to adequately mount a defense to the patent.” Echoing Ravicher’s belief that the open source community has nothing to fear of software patents, in CNET recently, author Stephen J. Frank wrote, “…With more and more innovation, companies are retreating even in circumstances traditionally justifying license royalties, the prospect that patents could doom open source grows ever more unlikely…[moreover] a community of developers could collaborate to quickly develop a non-infringing work-around. Such threats, added to the high costs of litigation, questionable returns, and the prospect of widespread rejection of open wallets for open source, will likely engender hesitation among most patent owners.11” Nevertheless, Frank’s theory on circumventing patents by creating patent-free alternatives works assuming that “work-arounds” do not challenge software patents with significant breadth, inventive techniques, or too formidable to build around or avoid. Meanwhile, it remains to be seen whether companies with the unquestionable interest of protecting their investors will follow through with either inaction or - actions which are invariably good for the preservation of open source, but leaving them exploited and/or vulnerable in the IT marketplace. Invariably, members of the open source community seem to disagree on something more implicit than software patents, but whether open source firms will be tremendously successful- to rival even the likes of a Microsoft or IBM. Assuming open source companies do not become successful, they will most definitely ward off would be treasure-hunters and patent marauders. But does the bet that they stay small keep the investment community interested in open source? Meanwhile, as members of the open source community become profitable and more successful, the “too small” logic works against itself. As a weird part of fate, the more successful open source firms become, the greater their chances of becoming targets of patent lawsuits. Conclusion A socialist society, explains the Manifesto, "deprives no man of the power to appropriate the products of society." Everybody can own, as private possessions, the goods produced by a socialist society. But a socialist society terminates the power that the bosses have under capitalism "to subjugate the labour of others" by means of the ownership of "private property," whether in the form of global corporations, big businesses, or sweatshops; whether through banking, property speculation, or landlordism – or any of the other swindles by which the capitalist class get an income directly or indirectly from the working class.” The open source community and communism are completely different. But ironically, the miserable failure of socialism in part was due to the refusal of both workers and corporations to depart with property rights, and to ultimately choose instead the rewards of traditional capitalism. In an eerie coincidence, the Manifesto and leaders of the open source community both point to distrust of “bosses” and large corporations as the biggest threat to shared community ownership of property. As Linux continues to assert itself within the private sector, we will soon learn if this cynicism was indeed well-placed. Notes 1. “EU Software Patent Vote Delayed Again”, Mathew Broersma
December 1, 2003 References 1
http://www.iusmentis.com/computerprograms/opensourcesoftware/patentrisks/
“Patent Risks and Open Source Software”, posted October 25,2003 |