IT Curmudgeon

On May 2 Andy Grove, founder of Intel and now a special advisor to the industry giant, spoke at the National Inventor's Hall of Fame. What he said excited many longtime observers of the software industry and infuriated many entrenched patent attorneys.

In his speech, Grove compared the current trading of patents as commodities to speculative financial instruments like derivatives. Companies Grove called "non-practicing entities" buy up patents and then wait to sue people who start companies using the innovations named in the patents. Grove called such people "patent trolls." Grove quoted Thomas Jefferson and asked if the current system meets the test of helping the public as it was intended.

Not surprisingly, Grove was summarily condemned by groups of patent attorneys like Dr. Alexander Poltorak, Chairman of AIPR and CEO of General Patent Corporation, who said

"Likening patents to financial derivatives like credit swaps that brought about the financial meltdown and global recession is at best irresponsible and at worst self-serving. It’s like yelling ‘fire’ in a crowded auditorium. It gets people’s attention by inciting fear and panic. Intel is one of a handful of companies that advocate weaker patents and are pushing for significant changes in our patent law.”

Thank goodness for Grove standing up to point out problems with the current system, but I think that the argument between these two is somewhat superficial. The trading of patents on financial markets is not the problem, the fact that patents are issued which are conceptual is the problem.

I would suggest that the system of awarding patents has become so weak that the whole process is in danger of becoming counter-productive to its intent to stimulate innovation.

Take for example Patent Number 6785865. This patent was awarded to Microsoft for having the tab key navigate between hyperlinks in a browser while navigating a web page. The patent application was filed in March of 1997, and awarded August 31, 2004.

The problem with this patent, and there are dozens of examples like this, is that it was integrated into many browsers at the time that the application was filed, including Lynx, Netscape and others. Such a technology is known as a "prior art". According to the law, if an invention is a prior art, the patent is invalid. Many such patents are issued because the patent office is under-funded and under-staffed. When this happens, the guy with the biggest lawyers can win through intimidation, courtroom maneuvering, or a war of financial attrition.

Patent number 7231590 was issued to Microsoft (I am not intending to pick on them, but the examples are easy to find) for visually highlighting numeric information on a web page, such as changing the color or putting a box around it. Issuance of patents of this type is dangerous both because of the prior art issue, but also because the patent is "conceptual" rather than "technical."

When Robert Fulton patented various aspects of the steam engine, inventors were expected to show how the invention would be made. Other inventors could improve upon the invention and apply for patents that improve on the original design. This process awarded the original inventor with protection and also stimulated innovation.

A patent that is issued based on what I call a "conceptual idea" does not allow innovation, it stifles it. You may have an opportunity to design a radical new accounting system that delivers documents to clients electronically, and guess who might show up for a piece of the action?

Some people cite this problem and advocate eliminating all patents in the software industry. I disagree with such extreme measures, but I think we should deeply consider adequately funding the patent office, and updating their procedures so that concepts such as "sending messages electronically" cannot be patented.

Meanwhile, if you are starting a software company, hold on to your money until someone shows up to sue you for using a concept someone may have patented as a general idea in the early nineties.