In order to foster the discussion and provide concrete examples, please find attached an interesting article from a Stanford Law School professor about the content industry and its future.

The article gives examples of how artistic fields have changed because of technological developments such as printing press, photography, radio, cable television, photocopier, VCR, MP3 player, among others.

Additionally, it refers to a number of circumstances and business models that could at least provide partial solutions for the industry.

Article: Is the sky falling on the content industries? by Mark A. Lemly, Professor at Stanford Law School Link: http://www.jthtl.org/content/articles/V9I1/JTHTLv9i1_Lemley.PDF

-- DiegodelaPuente - 18 Oct 2011

-- BahradSokhansanj - 11 Oct 2011

Alexey -- Yeah, this is to what I was alluding in my previous comment... That apparently, the only "benefit" of patents to start-ups is as a "signal" to funders that there is something worth investing in (though I suspect they are more attracted to an asset that the could sell off to an entity seeking to expand its patent portfolio for offensive or defensive purposes). And, indeed, as you point out -- for the innovator, not much benefit at all. But isn't the latter who we actually care about? I'm still looking for this example of innovators who are motivated by patents and copyright, who can't get what they really want from just having trade secrets, or couldn't get benefit from end-user innovation empowered by open source software that exceeds any benefits gained from an IP monopoly (and even provides social benefits of expanded invention besides how they contribute to improving the product in question). If the problem is on the funding side rather than the innovator side, then that's a different problem than the one I keep hearing about of "how can we provide incentives for inventors?"

And really, what we should really care about in terms of social benefits is the best product possible that helps all of us innovate and do useful things. That is what will make everyone more productive. VLC Player is awesome, and it helped me save what could have been hours of frustration when I was trying to play the contents of a DVD as a TA on Friday. It's kind of a long story, but R and Perl have been incredibly powerful in terms of their impact on human genome research. Given how many challenges we face as a society and as a planet, we have a lot of work to do, and if we're going to succeed, we can't have a system that literally prevents people from helping to solve problems. The reason why software patents or software copyrights or some software copyright with fair use solution that I don't understand make me really upset is that I can tell immediately that the outcome will be shittier products over all. And all the instruments of power, judicial, political, law enforcement, are being directed towards this outcome.

-- BahradSokhansanj - 09 Oct 2011

All of you bring up good points about problems with the patent system, especially the prevalence of patent trolls and companies stocking up patents to bring on patent wars. I agree that they are some of bad side effects of patents that altogether stifle innovation, rather than encourage it. Congress, like it usually does, was discussing how to solve these problems and punted via the America Invents Act.

What I am trying to say and argue is that we should not categorically exclude software from patent or copyright protection. Even though many entrepreneurs, inventors, and companies are innovating software without the incentives of patents, there are others who are driven. And when companies grow, they care about IP rights as assets and investors care as well. Incentives still play a large role because they help transform and realize a budding idea into practice and the market.

As for patent system itself, it's important to remember that section 101 is set low, and the gates are guarded by more substantive standards in 102 and 103 (novelty and non obviousness). Both test potential patentable inventions against the prior art, which in the case of software, the person having ordinary skill in the art should be quite high if so many smart and innovative makers of software are practicing the art. Normatively at least, the patent system should restrict patents for software. But of course, the PTO is far from perfect and too many software patents are granted still. But that reflects the failings of the PTO and institutions, rather than underlying fault of the patent system itself.

As for copyright, suggests some good arguments why its more limited rights may be apt for software. But consider that software is generally considered functional, which is among the traditional realm of patents. And fair use doctrine, even though it is a factor test, emphasizes the fourth factor, effect on the copyright holder's potential market. That constrains fair use, especially for software and the diffuse market that it plays in. But if enough people and companies innovate and reshape the software market so that it is beyond the control and reach of individual companies, we probably do not need a legislative solution to realize Mia's fair use suggestion.

-- ThomasHou - 08 Oct 2011

Re: "I'll even take anecdotes -- even just one -- of people who have started software businesses or invented software because they knew they'd have a patent or copyright. "

Companies are started all the time without sufficient capital to actually operate or bring a product to market. The innovator has an idea, does an initial tech demo, and then must raise money from institutional investors (venture capitalists, etc). One of the criteria to make a company investable to these players (i.e., make as much money as possible for the people doing the investing), is defensibility against competitors--the platforming that Eben strongly attacked in a previous lecture. Without various barriers of entry, the company will not be investable, and will not receive venture capital. The idea will not be commercialized. The innovator did not make moral decisions about freedom, rather she faced the set of choices available.

I know this because the software company I am starting has pursued a provisional patent solely for the purpose of securing funding. I know that in our business, the patent itself is unlikely to make any meaningful difference.

-- AlexeySokolin - 07 Oct 2011

First, the link Mia provided was fantastic. Second, and in response to the first overall point in this discussion, isn't 20 years too long already? In the world of rapidly evolving tech, only big, fundamental patents might reflect tech that is still useful 20 years after its invention.

More about how the above infographic helps demonstrate why patent protection is stifling rather than encouraging innovation: Consider the possibility that Insert Evil Company Here (IECH) has some tech out in the consumer sector that's massively profitable. They've got the production or whatnot down so well it's 99% profit. Consequence #1: Their R&D may be churning out wonderful new ideas that consumers would adore having in their homes, but they aren't as profitable, so they patent the idea and put it in a closet in case someone else tries to bring it to the market and undermine IECH's enormous market share. Realizing the potential of this strategy (allowing IECH to ride the gravy train of tech #1 for eons), Consequence #2: IECH begins using its massive profits to buy up patents, even at outrageous prices, from tech companies the world over to make sure its closet full of patents is even more well-stocked. The atmosphere is now ripe for innovators to get their pants sued off for anything that might compete with tech #1, all while IECH has no incentive to roll out anything innovative themselves until it displaces tech #1 in terms of profitability.

-- JohnJeffcott - 06 Oct 2011

A few things. First, just because software patents use the magic words "with a computer" doesn't make them any less patents on mental processes -- they're just being written with an artificial formality of language to evade Section 101. A general purpose computer is just a machine for implementing algorithms, and it's the algorithms that are being patented. Second, the absence of software patents doesn't mean that people "innovate for free." I don't really know how to argue about this except to say that lots of innovators have gotten very rich without enforcing software patents. Third, there are large companies that have grown successfully large without software patents (not sure what "large" means in this context).

Finally, re, which is the "better solution." What is the problem? What are we solving with our solutions of copyright or patent or whatever else. How is the problem defined? I'd love to see some empirical data describing the scope of this problem. I would like to see any evidence at all that we need IP for what it's claimed it does, which as far as I can tell is "incentivize innovation," I guess? I'll even take anecdotes -- even just one -- of people who have started software businesses or invented software because they knew they'd have a patent or copyright. Because I can point you to all kinds of people who never expected IP to give them monopoly power (even if they did end up getting patents or copyrights because their university or funders made them) who still innovate, of products that are improved and make more money for their producers because of end-user innovation, of how all sorts of IP formulations end up hindering innovation and introducing inefficiency, etc.

-- BahradSokhansanj - 06 Oct 2011

From what I can surmise based on my budding IP knowledge, I think copyright is a better solution than patent because copyright protection does not extend to ideas or methods of operation that are too functional to be expressive. Reverse engineering is also allowed with copyrighted works, but not with patented works. Copyright could definitely be improved by expanding the fair use doctrine so that its applications to the software realm are more apparent. For instance, eager, altruistic Linux-type developers could push out improvements to popular commercial software without fear of retribution.

Also, here's an infographic on tech companies' patent wars and their stifling effect on innovation.

-- MiaLee - 06 Oct 2011

Responding to Austin's comment, original authors or inventors do care that minor changes off their works are protected and whose IP rights are given to someone else. On the patent side, an inventor of a pioneering product would expect to recoup not just the invention itself, but also the market for products that "proximately" branch off it. Having another inventor monopolize and block the ability of the first inventor to realize the market off his invention would produce less incentive to invent in the first place. Therefore, patents has the doctrine of equivalents to allow inventors to claim infringement on products that are substantially similar. The system realizes the need of broad market rights for inventors to realize profits off their inventions, and thus requires any improvement off a previous invention to itself satisfy the threshold of patentability.

Responding to Bahrad, software patents are not monopolies on mental processes, which are themselves unpatentable per se. They involve application of the mental process to a specific procedure or machine. The protection granted by patent law is on the specific application, usually tied to the machine/computer or transformative effect. Now I agree with you and other authority that many software patents are not worthwhile for the software industry or society. And I think the Fed. Cir. is continuing to mess up Section 101 (patentable subject matter), including computer software. But some patent protection may be desirable for the next new software that can change how we work or use computers. Some software programs that might be created would require enormous time and resources beyond the willingness and ability of individuals who can try to innovate for free. Even though it may sound cynical and against what our class is about, we may need large companies and patent protection to encourage broadly the development of all kinds of software.

-- ThomasHou - 06 Oct 2011

A few points.

1. It sounds like the most compelling argument for why patents are "better" than copyright has to do with the shorter term. Indeed, there is research in which people have tried to determine the optimal copyright term economically, given production and reproduction costs, and have found terms on the order of 14 years and even 2-4 years. But of course, these studies have a huge assumption -- that copyright is economically beneficial at all, an assumption that the authors of the latter work acknowledge and disagree with, and they note that absence of copyright beats any "optimal" term.

2. I have yet to see any research that shows social benefits for software patents -- or even benefits for the software industry. It appears to be redistribution + parasitic loss. I've seen some hand-waving to the effect that patents are useful because they are "assets" that a start-up company can use to attract funding... but no one I know who is really pursuing a start-up cares about this from a development standpoint. (VCs care, because if the start-up fails, they can just sell them off to trolls or companies worried about blocking litigation -- again, totally parasitic on innovation.)

3. There's a really fundamental problem here: a software patent is a monopoly on a mental process -- a thought, an idea, a mathematical formulation that just happens to use a computer to implement. There's no way to "design around" a concept -- you're simply blocked from having that thought and doing something useful for it, or else the coercive power of the state falls on you. Look at this case or this one (I'm linking to blog posts about them, but it's easy to link to the opinion themselves). Now, Rader or Newman would say that, hey, if these are "obvious" thoughts, then the patent is invalid... but in principle, there can be a coercive, state-enforced monopoly.

So, I guess, yeah, maybe patents are better because at least innovation can be taxed and hampered (if not blocked altogether) for 17 years or 20 years or whatever, as opposed to for 99 years or 150 years or however long copyrights last, but in the context of software that is only relevant for a few years (at most), it's still bad. And, in the case of that second case I linked to, Classen, it's verging on a moral abomination.

-- BahradSokhansanj - 05 Oct 2011

http://www.techdirt.com/blog/wireless/articles/20111001/00365416161/patent-troll-says-anyone-using-wifi-infringes-wont-sue-individuals-this-stage.shtml

this is an short article on what's going on with wi-fi patents right now. That he is suing for only small amounts to "force" the other companies to settle instead of hiring a lawyer and going to court demonstrates that the patent system can be used as a weapon just as copyright protection can.

I agree with you saying that patents are harder to obtain, but is that necessarily better? For creative works offering only minor variations on older copyrighted works, copyright protection likely will only extend (if it were to exist at all in the new work) to the original material in that new work, i.e., only the minor changes. Thus, the lower copyright standards don't necessarily create barriers because of the lower substantive standard. That new, minor changes are copyrighted doesn't necessarily create problems for the original creator. While a patent system might make it harder for these minor changes to be protected, that they would be protected doesn't seem to present any problems for the original creator. Maybe someone can comment on this and discuss how minor variations becoming protected can harm the original creator. Other than that, I don't know nearly enough to actually make any claims regarding which is better - copyright or patent.

-- AustinKlar - 05 Oct 2011

Patent protection may be better for the following:

1) Its term is shorter - 20 years from date of filing - rather than the long protection given to copyright (life of author + 70 years, usually)

2) Patent protection is tougher to obtain, with thresholds of utility, novelty, and more importantly, nonobviousness. Although computer software qualifies as eligible subject matter (a process, tied to a machine or transformation), the other thresholds likely limit patentability for many software programs, especially those that are mere copycats or minor improvements of other programs.

3) Blocking patents foster more cross-licensing and improvements than derivative works under copyright. When one inventor creates new patentable software based on another inventor's software, patent law creates incentives for both to cross-license. On the other hand, an unauthorized derivative "author" of a new software program based on a copyrighted software loses all IP rights.

4) Patents encourage open disclosure of claims and how to use and make the computer program. That encourages others to learn about new software and gives them opportunities and the know how to make better software. Copyright, meanwhile, provides little incentives for others to experiment and use new software (besides fair use, which is generally inapplicable for this).

The drawback about patents is the extensive protection, especially in distribution (prohibiting sale and offering for sale). The newly passed America Invents Act will play some role in how patent protection is used for software. For all you IP junkies, do you think patent protection is better or worse than copyright for computer software?

-- ThomasHou - 03 Oct 2011

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