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Open Source, Learning, and Patents
Michael FeldsteinApril 23, 2007
Author’s Note:
Adapting to the audience, the sequence of slides presented was changed during presentation. This presentation is in the sequence given.
A recording of the presentation is available and can be reached at ___ (Audio MP3 01:00:00 xxmb).
About me
Who I am not
A lawyer An intellectual property expert Knowledgeable about patents
outside of the U.S. A journalist A spokesperson for my employer
Who I am
An interested party A lifelong educator Involved in educational software for 11 years
A partisan One of the early reporters of the Blackboard
patent and lawsuit Started the Wikipedia page on prior art Translated the Blackboard patent claims into
plain English
Some wake-up calls
Blackboard v Desire2Learn Firestar Software v RedHat Jacobsen v Katzer Washington Research Foundation
v. Matsushita et al Alcatel-Lucent v Microsoft
Basics about patents
Patent vs Copyright
A patent is a temporary monopoly
on an idea (or “invention”)
A copyright is a temporary
monopoly on the expression of an
idea
Reasons for patents
To provide incentive for innovation in the fields of “science and the useful arts”
To provide incentive for sharing of that innovation, to the public good
The issues
Pros and consBenefits Costs
Innovation
Creates an incentive for research and new process/product development
Encourages disclosure of inventions
Impedes combination of new ideas and inventions
Provides an opportunity for rent-seeking
Competition
Facilitates the entry of new (small) firms with a limited asset base or difficulties in obtaining finance
Creates short-term monopolies, which may become long-term in network industries, where standards are important
Transaction Costs
Creates a neatly packaged negotiable IP right
Creates patent risk uncertainty and/or search costs
Creates economic friction Raises transaction costs for
follow-on development
Source: http://en.wikipedia.org/wiki/Software_patent_debate (2 March 2007, 14:43)
The software patent challenge
Tricky: Algorithms are not patentable, but devices that use them are
Controversial: Inventions are often additiveSource: http://en.wikipedia.org/wiki/Image:Software_patents2.JPG#file (30 April, 2006, 00:32)
EduPatents as special cases
The economics of Bb v D2L Estimated litigation costs to Desire2Learn: $1.5
million - $3 million Additional cost for inter partes challenge at USPTO Desire2Learn’s estimated annual revenues: $10
million Desire2Learn’s estimated annual profits: 5%, or
$500,000
Conclusion: The patent litigation will cost Desire2Learn 100% of their profits for 3-6 years or
longer.
And what if they lose?
They pay all litigation costs Plus USPTO challenge costs Plus the royalty Plus treble damages for willful
infringement (some calculate ~$800K/new customer from suit to settlement)
Plus Blackboard’s legal fees
The positions
Views about software patents
Good (and good for you) Generally good, but patent quality
is a problem Bad, but we’ve learned to live with
them Evil, bad, and yucky
Views about EduPatents
They protect innovation Good, but particularly vulnerable to
patent quality problems Open Source should be protected Open Source and its support vendors
should be protected Do more harm than good
Hierarchy of EduPatent Needs
This section drawn in part from Jim Farmer, “eLearning Patents: An Institutional Perspective,” SUNY Wizard conference, November 8, 2006
Safety for users
License from a firm that has a patent indemnity clause
Use Open Source software that has obtained an opinion of non-infringement or licensing agreements
Encourage patent holders to provide guarantees not to sue
Safety for Open Source contributors Contribute to a legal entity; retain a
non-exclusive right to use and distribute
Execute a contribution agreement Maintain records (including copies
of contributions) Publish your records Maintain hard copies if possible
Safety for software projects (especially Open Source) Provide opinion of non-infringement or
design around patents that are being asserted
Publish documentation of design processes, and contributions
Reveal all sources of code Work with patent holders and community
to establish ground rules and “treaties” When necessary, license patents
Safety for innovators
Engage with the community regarding quality of patent applications
Think carefully about trade-offs around patent assertion
Consider non-assertion promises or royalty-free licenses for relevant communities
Consider defensive patents or publication as alternative strategies
The future
What to expect
More assertion of software patents More liquidity in the patent market Some patent reform, particularly
around patent quality The rise of patent indemnification
and insurance as a line of business
Developments to watch
Blackboard v Desire2Learn The Blackboard patent pledge and similar
efforts KSR v Teleflex Microsoft v AT&T Patent reform legislation in House and
Senate USPTO patent application peer review
pilot
Questions?
Michael Feldsteinhttp://mfeldstein.com/[email protected]
For EduPatent Alerts:http://mfeldstein.com/edupatents/