March 24, 2002
Subject: Comments regarding Competition & Intellectual Property
Dear Mr. Secretary,
First of all, I would like to commend the FTC for holding these hearings and soliciting public commentary. There has recently been a growing movement among software development professionals concerned with the anti-competitive effects of software patents and I am grateful for the opportunity to express some of these concerns to the commission.
I am writing as both a small business owner and a professional software developer of 17 years, having obtained both Masters and Bachelors Degrees in Computer Science and Electrical Engineering from the Massachusetts Institute of Technology. My comments are specific to the software industry, as that is the field I am most knowledgeable in, however I suspect they will also become increasingly relevant to the biotechnology and nanotechnology industries as those industries develop over the next few decades.
Over the past two decades I have become increasingly concerned over the number of software patents. Although the patent office does not allow the direct patenting of computer software, the data processes performed by the software can be patented as well as the software implementations in a computer system, which effectively amounts to allowing a monopoly on the software itself and all related implementations, even if developed independently. This has held back the progress of software development research and will continue to slow the growth of technological progress if not corrected. In addition, software patents are detrimental to our economy and cause significant economic hardship to small businesses. They also hurt consumers by restricting consumer choices, often resulting in inferior products by preventing competition.
The intention of Congress with respect to patents was to "promote the progress of science and the useful arts". However, there are several fundamental differences with respect to software-based patents. In the field of computer software, reinvention is commonplace. Programmers will routinely independently duplicate each others work without knowledge of the duplication, simply due to the extremely rapid pace of software development relative to product development in other industries. 20 year patent terms represent a virtually infinite monopoly since many software products are obsolete or redesigned in just a few years as a matter of course. Individual software programs are also protected by copyright, so that even without any patent protection, software would be a lucrative enterprise.
With the increasing numbers of software patents being granted today, an unfair and overly cumbersome burden is being placed on programmers to verify that they are not unintentionally infringing on other patents. To protect themselves from lawsuits, software developers must take a significant amount of time out of their work and spend it instead on searching for relevant patents and interpreting them relative to their work. For some software projects that I have worked on, I have personally spent over 30% of my time trying to ensure that I was not accidentally infringing on a patent, but even with that amount of effort I could not be certain I had reviewed all of the relevant patents. This results in an incredibly large amount of wasted labor, harms our nation's economy and results in less time spent on actual software innovation. As the number of software patents continues to grow, this problem will worsen. It is estimated that there are over 100,000 software-based patents, and because of differences in terminology and language in different subfields of the software industry, even a keyword or classification search cannot possibly narrow this number down to a small enough number of patents to ensure that a small business or independent developer does not infringe on any patent. Since even a single line of code can infringe on several patents, and the typical software project consists of thousands or even millions of lines of code, there is no way for a small software development business to adequately ensure it does not infringe on existing patents.
When the government itself grants software monopolies to companies, though means of patents, it is preventing the free market from working properly through competition and consumer selection and forces consumers to accept inferior products, thus going against most of the growth and innovation that has occurred, without the use of patents, thus far in the software industry. For example, many features are not included on applications running on operating systems other than Microsoft Windows because the company holding patents on those features does not have the motivation to provide applications that run on other operating systems. This often has the affect of limiting consumer choice to a single operating system. The problem is compounded when a standard is adopted that is restricted by patents, such as in the case of the MPEG2 standard used on DVDs. Several large companies with a number of patents covering the technology used their monopoly power to make MPEG2 the standard format used on DVDs. As a result, anyone wishing support DVD playback in their operating system or application program must license a rather large portfolio of patents from these companies. A small business lacks the ability to compete by producing its own DVD software due to patent restrictions yet cannot produce an alternative because it does not have the economic power to have its own technology incorporated into the "standard". Free operating systems, such as Linux, cannot afford to license these patents at all, which means users who require DVD playback or editing capabilities for compatibility with the standard are denied the choice of using an operating system that competes with the large operating system vendors.
Patents routinely discourage competition by raising the costs to market entry. This may not hurt overall economic performance in some industries, but in the software industry, which is characterized entrepreneurs with little or no working capital, it often prevents competition altogether. The result is that products tend to undergo smaller changes and new software advances are often slower to emerge. The pace of the software industry is so fast relative to other industries that this slowdown is not apparent until carefully examined. The lack of competition results in inferior products to consumers and because of the wide applicability of software in modern life can even have impacts on national security.
A single patent infringement lawsuit can destroy a small business or independent software developer, regardless of the validity of the patent or the infringement claim, since most independent software developers and many small businesses cannot afford to defend themselves in court. Large companies with huge software portfolios can and do frequently use these lawsuits to drive their competition out of business.
Although anyone may apply for a patent, independent software developers and small businesses often fail to do so due to the time and expenses involved. Hiring a qualified attorney to pursue a patent application can cost thousands of dollars, and although an attorney is not required, the USPTO itself recommends using the services of an attorney due to the complexity of the patent process. Although a few thousand dollars may not be a major expense for a large company, it is far too expensive for many small businesses and independent software developers who cannot even afford an office. This is particularly important, considering that small software development firms and independent software researchers and developers have been responsible for the vast majority of advancements in the software industry. At the same time, large companies are amassing huge patent portfolios based on trivial "innovations" to prevent these developers from selling their software or even distributing it for free. Furthermore, even if a small business can afford to litigate against a large company, the large company will likely be able to find some patent in their vast portfolio which the small business is infringing on and thus counter sue or force the small business to agree to cross-licensing. As a result, the patent system significantly benefits large companies, but significantly hurts small businesses, and independent software developers. Since much of the innovation in the industry comes from the small and independent developers and academic researchers that have not sought patents, the patent system does not encourage software innovation, rather it impedes software innovation.
The above comments all have so far assumed the validity of the software patents. However, the problem is far worse, since many of these patents should not have ever been granted in the first place.
The US Patent and Trademark Office, in my professional opinion, will never be able to adequately review patent applications for inventiveness and non-obviousness, since the most highly qualified people will go to industry. Furthermore, even if funding to the USPTO is vastly increased and thousands of additional personnel are hired, these problems will persist. Computer science is simply too large and too quickly evolving of a field to provide adequate coverage of prior art and current research. There are thousands of specialized areas within computer science, and a person skilled in the art of task scheduling design will typically be unaware of prior art in the field of language parsing theory or garbage collection, even though all three areas can be important in operating system design. With so many specializations, it is often impossible for many people skilled in some arts of computer science to see what would be obvious to those skilled in other specializations. This undermines the entire patent process, and has led, and will continue to lead to many invalid patents being used. Unfortunately, even with increased funding, there is nothing the USPTO can do to adequately address this problem due to the enormous breadth of research involved.
According to the Small Business Association, small businesses account for more than 99% of the employers in this country. Congress has identified in many bills, including the Small Business Act, the important role that small businesses play in the American economy. Congress has stated that, "The essence of the American economic system of private enterprise is free competition. Only though full and free competition can free markets, free entry into business, and opportunities for the expression and growth of personal initiative and individual judgment be assured. The preservation and expansion of such competition is basic not only to the economic well-being but to the security of this Nation." However, software-based patents erode these opportunities for small entities by preventing competition by small businesses and individuals without large amounts of capital. The result is a significant economic cost to our nation and a denial of many benefits to consumers.
Since we cannot ever hope to adequately address the problems with software-based patents though the USPTO, we must seek other remedies to help ease the undue burden currently placed on small businesses with limited financial resources available for research and litigation. The FTC should recommend to Congress, that software implementations of patented processing be held unenforceable. This would prevent the burden of forcing the USPTO to classify each patent as software-based or not, a difficult if not impossible task due to legal wording choices. Reducing the patent term limit to 3, or at most 5 years, might also be appropriate due to the increasing pace of inventions, and would allow a remedy to apply to non-software industries as well. I hope the FTC takes swift and immediate action to address these concerns, which are vital to our technological progress, free competition, and the economical vitality of our nation.