Comment by revel | Hacker News Reader

Comment by revel | Hacker News Reader

The unfortunate reality is that the 20th century legal code is ill equipped for dealing with software firms. Up until about 1980-1990 it didn't matter all that much, but tech firms are now the largest, fastest growing and most powerful companies in the world. We can't punt on these issues any more.

There are 3 forms of IP protection: copyright, patents, and trademarks. The crux of the issue is that, for software, copyright protection is too weak and patents are too strong. So called "stupid patents" are a symptom of this issue, but not the cause. Software ideas don't work well under either of these existing protection models. Further, software patents are especially broken since they've deviated from their originally intended purpose of helping fledgling inventors launch their creations without larger firms stealing their work. Now every large firm has an arsenal of allegedly "protective" patents that can be swiftly mobilized to crush upstart competitors. Similarly, patent trolls can sit on the sidelines and exact royalties far beyond the economic value that their inventions contribute. Bluntly, there needs to be a new form of IP protection to deal with this reality -- this isn't to say I have any strong ideas of what this form of protection should be, just that these are the characteristics of the problem.

The same core issue is starting to become apparent in anti-trust law. These laws are inappropriate for tech firms because they don't scale like traditional businesses (how do you deal with an industry with super high HHI but massive barriers to entry and no easy way to split up existing competitors?), but that's a topic for another thread.

I don't agree with your analysis that copyright is too weak.

Copyright was helpful in an age of boxed products, but is now largely irrelevant in an age of SaaS.

But in an era of SaaS, trade secrets law seems like more than enough to defend a company's IP.

If you invent a new data storage system, as another comment suggests, you can protect it quite effectively with trade secrets if you start a data storage SaaS.

IANAL, but trade secrets law also seems to provide some protection against reverse engineering even if you ship a boxed product: http://cdfirm.com/pitfalls-to-the-defense-of-reverse-enginee... Though it's not iron clad and varies by jurisdiction.

Personally, I'm much more comfortable with trade secrets law being iron-clad, rather than patents existing.

Copyright and trade secret is too weak. How do you protect, e.g., video encoding techniques with copyright, where public disclosure is necessary for interoperability? Patents worked really well to create an interoperable world of content and players from MPEG-1 to today. Or the software algorithms sitting in your WiFi chipset. Someone has to pay for all this R&D, but for the technology to be interoperable it has to be disclosed.

Putting the technology in a pool and charging implementors for patent licenses is a good way to do that. In my opinion, it’s better than depending on Google to bankroll all these things with their advertising money printing machine (VP9).

I don't think MPEG is a good argument for patents; I don't think we should be patenting protocols. The idea that you can't interop without a patent license seems like complete bullshit.

Interested parties will still do development on these technologies, even without patent rights. Everyone still needs to sell the next version of their product.

And honestly, I would trade protocol protections to get rid of all the bullshit patents which outnumber anything meaningful at least 1000:1.

MPEG isn’t just a bit stream format. The magic is the encoding techniques. That is very hard to protect without patents, because the techniques are exposed in the bit stream formats. And ideally you want to have a reference implementation with source code so you can get lots of high quality interoperable implementations. Same thing with the algorithms underlying WiFi and LTE. Trade secrets don’t help because you can’t have interoperability without making it public. Copyright doesn’t help. The software is the easy part. It’s capital intensive to develop the algorithms.

Interested parties would develop these technologies, but they wouldn’t make them open. Where are the alternative models for developing something like MPEG? There is the Google/VP9 model, which is to bankroll the R&D it with advertising dollars. Then there is the BBC/Dirac model with public funding paid for by a mandatory tax. To me those models are worse and less sustainable.

IMO industry leaders have pressure to reinvest their profits in R&D and put it in their new products, regardless of whether they can get patent protection for them or not.

I'm not an expert in codecs or wireless protocols, but afaik most wireless telephony standards are practically trade secrets, requiring payment of tens of thousands of dollars to even read the spec.

And I can't say I'm really a fan of the situation where people are forced to buy Qualcomm chips because they hold key LTE patents which they're managed to get people worldwide to agree to use.

But one thing I do know about standards is that they often trademark their name, and then require certification and payment for use; it should be relatively straight forward to setup industry bodies like this where you cannot use the trademark Bluetooth without paying into the body, which pays for R&D.

Sure, you have to get creative and you can't just sneak something you patented into a standard and land in a billion dollar monopoly, but frankly, I'm not really crying for Qualcomm and co.

[EDIT]: By way of analogy: we don't let newspapers patent facts, even if they are the first to report them. This makes it hard for news orgs to protect their content, and while it was easier for news orgs pre-internet, Reuters, AP, NYT, BuzzFeed are all doing well. There's no need to prop up every industry.

> IMO industry leaders have pressure to reinvest their profits in R&D and put it in their new products, regardless of whether they can get patent protection for them or not.

This has obvious free-rider problems for things like new video streaming protocols. Why contribute to the development of next generation codecs, for example, if you can just copy the most successful solution of your competitors and get 80% of the benefit for none of the cost?

(I say 80% because the competitor's solution will presumably not be totally optimized for your business needs)

> IMO industry leaders have pressure to reinvest their profits in R&D and put it in their new products, regardless of whether they can get patent protection for them or not.

They do. What they don’t have is any incentive to open up that R&D for competitors to use unless they have a way of monetizing it. Selling a patent license is better than many of the alternative such monetization models (e.g. Google’s model of developing Android for free so it can slurp down all the data pushed through Android phones).

As to standards essential patents—-the whole point is that you don’t have to buy the product from the same company that did the original R&D. You can buy someone else’s chip, and the original technology developer still gets compensated with a royalty. This is a system that works really well in a whole host of areas everyone depends on. MPEG, WiFi, LTE, Bluetooth, DDRn, PCI-E, all of these ecosystems are mediated by patents. Companies spend a lot of money developing the technology, then implemented who generally don’t have the expertise to develop this sort of technology themselves pay licenses to implement the standards essential patents. It works and it’s way better than the alternatives.

Patents are effectively a mandatory tax, just mostly paid to private companies.

Yes, it’s a tax paid by the people who profit by making compatible implementations of technology to the people who spend money developing the technology. It’s an honest bi-lateral exchange of money for property rights.

I'm curious as to why you feel copyright is too weak. It's pretty effective at preventing competitors from ripping you off and although customers are often a different story it already has hit the limits of enforcement ability on that front.

Copyright can't protect ideas, only specific expressions of them. If my code contains a brilliant and truly novel idea for efficient data storage, you're free to write your own code implementing that idea without violating my coyright.

Yes, and that's kind of the whole point - the world is better off if everyone is able to write their own code implementing better, more efficient data storage without worrying if someone else might have done that before them. It's important to note that patent laws are created not for the benefit of creators but for the benefit of the general public - the public gives creators "temporary monopolies" only because and only to the extent that these protections are expected to provide appropriate incentives to the creators that benefit everyone else in the long run. The question is about which particular cases warrant the state to enforce an artificial monopoly, a restriction on what technology others (including other creators) are able to use in their business. If a particular protection gives no benefit to the wider community, that protection shouldn't exist.

Patents solve a problem where inventors might reasonably choose not to distribute improved products widely because they're unable to ship them without revealing how they work. We want them to sell these inventions to wide markets without delay, so issuing time-restricted patents is useful to achieve that goal. As other posters stated, shrinkwrap software has the same issue (so patents might be useful for this scenario) but SAAS does not; you're going to use the brilliant and truly novel idea for efficient data storage anyway, and if other people would be restricted from doing so then that makes the society to use inferior technology with no good reason.

However, there is no incentive for entrepreneurs to take risks in your world. The existing patent system, as set forth in the Constitution, Article 1, Section 8, provides that incentive.

The world of reality?

Conversely, if I write some bubble sort+ code at work I can’t make use of it at home and have to rewrite it from scratch because employers own all the code we write, even when it’s not even remotely in the scope of the business and is just groundwork bordering on boilerplate.

+ hopelessly contrived just to make a point.

I’d like to see something like patents but with an affirmative defense if you prove independent invention.

> There are 3 forms of IP protection: copyright, patents, and trademarks

Technically, trade-secrecy is in that list too

4 forms. Trade secrets are intellectual property generally managed by state law.

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