The Open Road

For those of us who believe that patents stifle innovation, this week brings good news: patent filings are down, as PatentlyO reports. After years of steadily increasing, U.S. patent filings have dropped, perhaps reflecting the bad economy.

Or perhaps an increase in common sense? Nah....

While the PatentlyO blog suggests this is a "crisis," I'm with TechDirt: the only crisis is that it has taken so long for patent filings to decline:

Considering the large number of bad patents that got through over the years, and the resulting flood of applications from others hoping to strike it rich by gaining monopolies on obvious ideas, it should be seen as a good thing that applications are finally dropping.

If anything, we should be wondering why they're not dropping more. Patents were supposed to be given out in the rarest of circumstances, when other incentives weren't enough. Somewhere along the way, those who controlled the patent system seemed to forget this and lose their way.

Let's hope it continues. Patents have their role in the intellectual property regime, but their impact on the software industry is controversial at best, and destructive at worst.

Follow me on Twitter @mjasay.

Open source is not going away. Why should it?

That's a quote from Microsoft CEO Steve Ballmer in Marshall Phelps' new book, Burning the Ships, and it's a question that Phelps tries to answer.

In the course of doing so, Phelps portrays Microsoft as desperately striving to adapt to a new world of aggressive enforcement of intellectual property (IP), but ends up suggesting a rising IP hegemon eager to shape a new world of such enforcement.

It's not pretty.

Phelps is the man who turned IBM's patent portfolio into a $2 billion business (as he reminds the reader several times), but his goal at Microsoft wasn't to generate cash through licensing, he declares. Nor is Microsoft's new IP strategy a rehash of the old world where IP is treated as a negative right (i.e., the ability to protect one's IP from the wiles and avarice of competitors), but rather IP becomes "a bridge to collaboration with other firms."

But this is where the contradictions begin.

Phelps indicates that Microsoft cannot go it alone in the world...then points to statistics that claim 42 percent of the world's IT people depend upon Microsoft technology. Microsoft apparently has done quite well going it alone.

He further agonizes that Microsoft must expand its partnership footprint...even while identifying 640,000 vendors in Microsoft's partner ecosystem that earned more than $425 billion in revenue in 2007. It's unclear, based on his own evidence, how Microsoft is starving its partners and, indeed, Microsoft has always made much of what an impressive partner it is with 96 percent of its sales going through partners.

Phelps berates patent trolls and others for forcing Microsoft to pay hundreds of millions of dollars in licensing fees...but then goes on to explain how Microsoft's new IP strategy has his team on the road constantly signing up new licensees for patent royalties and other agreements.

The money quote comes from Nathan Myhrvold, a former Microsoft executive and arguably now the world's largest patent troll with his company Intellectual Ventures, who declares himself "shocked" by the actions of patent trolls who could "just go and buy a patent and then use it" against Microsoft.

Oh, the irony, given that this is a concise definition of Myhrvold's current business plan and, apparently, Microsoft's.

Indeed, this is where Phelps' IP strategy for Microsoft departs from its stated intent. Phelps writes:

...(I)ntellectual property should always serve the business, not be the business....Microsoft didn't need money (from its patent portfolio)--it had billions of dollars of cash in the bank. Instead, Microsoft needed to transform its relations with the rest of the industry and build collaborative relationships with other firms. So that became the focus of our new IP strategy.

This sounds impressive, and it would be if it accurately depicted how Microsoft has approached the industry with its IP. Instead, Microsoft has spent the past several years menacing the open-source community and others with the threat of its increasingly large patent portfolio, and now claims "more than 500 patent and technology collaboration deals with companies large and small around the world."

I say "menace" because Phelps nearly always talks about these agreements in light of Microsoft approaching a prospective IP "partner." If Microsoft's IP were needed to build such cooperative bridges, presumably more of these "partners" would be approaching Microsoft, rather than waiting for Microsoft's heavy knock on the door.

Novell, as Phelps highlights and which CNET recently noted, is an exception to this rule, having approached Microsoft.

As with Novell, Phelps routinely neglects to mention facts that might cast Microsoft's IP actions in anything less than a warm and glowing light. For instance, he talks up Microsoft's generous decision to share 30,000 pages of technical documentation, conveniently forgetting to mention that the action was spurred by its desire to get out from under the European Commission's antitrust eye. (It didn't quite work.)

But nowhere is Phelps' selective memory more illuminating on Microsoft's intentions for its new IP strategy than when discussing open source. Here Phelps outdoes himself, starting with his characterization of why Microsoft wanted to build a bridge to the Linux world:

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I was talking on Wednesday with Daniel Tunkelang, chief scientist for Endeca, about potential competition his company faces from open source (e.g., Lucene). In response, Tunkelang made an exceptionally interesting point, which I summarize here:

Open source drives innovation by making yesterday's technology a commodity, forcing proprietary vendors to innovate in order to justify their paychecks.

This got me thinking. Patents are short-term monopolies (20 years) designed to give inventors sufficient time in which to recoup their R&D costs and turn a profit. Open source turns the 20-year patent term into two years, if that. As a relentless, ever-growing competitor, open source keeps the proprietary world in check and on its toes to a degree that the industry has never before seen.

This is an exceptionally positive trend for customers. It means that not only will they save money on core technology that yesterday cost a significant amount, but they also benefit from the rush to innovate by proprietary (and open-source) vendors as they seek to deliver compelling, marketable value.

Today, nearly every software vendor faces increasingly stiff open-source competition. Had this been the case 20 years ago when Microsoft Office was developed, we would likely have far more innovation in office productivity technology than we do today. Ditto for Windows desktop, SAP's ERP system, etc.

Fortunately, we now have open source to shorten the shelf-life of complacency in proprietary software. Vendors may find it uncomfortable, but it's good for them and good for customers by accelerating innovation.

There was some distressing news buried in Sean Michael Kerner's look into Novell's and Microsoft's virtualization partnership. The news, however, had nothing to do with virtualization, and everything to do with Microsoft job titles.

This was a product announcement, yet Microsoft resorted to its legal department for quotations??? (Novell, of course, offered up a "senior product marketing manager." It has yet to become a licensing company, and is still focused on thriving as a software company.)

The two Microsoft employees quoted have bizarro job titles:

• Monty O'Kelley, technical director of legal and corporate affairs at Microsoft
• Brent Phillips, senior product manager for intellectual property and licensing at Microsoft

Every big company has a healthy-sized legal department. Microsoft? Well, if it's passing out job titles like this, I'm guessing it has run out of titles like "product marketing manager" and "developer" and is instead doing weird mash-ups between its engineering teams and legal.

When you have someone whose job it is to come up with "intellectual property and licensing products," you've lost your way. Most software companies focus on selling (gasp!) software. Not, apparently, Microsoft.

Down in the Slashdot commentary on an excellent New Yorker article called "The Permission Problem" was this interesting comment, one that resonates with me.

The idea in the New Yorker article is that intellectual property (IP) law perhaps creates more inefficiencies than it resolves by making it too expensive to bother creating around existing IP and by making it apparently too expensive to round up IP owners to get the proper permissions. Against this argument was "Shados'" suggestion that what people really want is weak IP, not no IP:

Give your songs for free! The money is on the tour... Of course, as long as another band doesn't do -exactly- the same songs with a bigger marketing budget (and if everyone does it, ONE of the bands who copy you will most likely be better). Also, that's as long as the video of your show isn't in hi definition 7.1 surround blu ray the day after it for free (or even worse, SOLD by someone else). With absolutely -zero- copyright, its a lot less powerful as a promotion tool. (Now it works because you're only letting indiviuals step in... once corporations can rape your copyright too, things get a little grim). Oh, and without IP laws, people can rip off your name, your logo, everything, and not only sell it as free promotion to you... but make it -theirs- and use it for -themselves-.

If you're really well known... no one will think the "fake" Metallica is the real thing. If you're just starting though? BANG! Gone.

This reminds me of Radiohead's Thom Yorke, who commented to David Byrne that Radiohead's decision to give away In Rainbows could only work because Radiohead has an established brand, one for which people are willing to pay:

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A few months back, I helped to review and edit a book for Van Lindberg and O'Reilly Media called Intellectual Property and Open Source: A Practical Guide to Protecting Code. Over the past 10 years, I've read every open-source legal book written. Lindberg's book is by far the best.

If you've wanted a book that helps to explain complex open-source legal questions in a readable, approachable style, this is it. If you've wanted to know how to write an open-source contract, or whether patents were going to be the undoing of your project, here's your book.

Lindberg is an exceptional writer. Take this opening to his chapter on the GPL:

Almost all of the difficult questions that open source lawyers worry about revolve around the GPL.

The GPL has a lot of things going for it: it is the single most common open source software license; it has brought together a large and vibrant community of developers; it is a brilliant hack.

At the same time, there is no single license that is more mistrusted or reviled than the GPL. Many open source developers refuse to accept or release code under the GPL because it imposes restrictions at the same time as it grants freedoms. I know from personal experience that the GPL gives most lawyers fits.

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And it came to pass in those days, that there went out a decree from [Steve Ballmer-ustus] that all the world should be taxed.

Some capitulated but some, like Red Hat, continue to resist, as eWeek notes. The sad thing is how foolishly consistent Microsoft is on this patent thing. And confused as to what open source means.

Here are just three points that Microsoft is making clear, which are completely wrong (on a number of different levels):

1. Microsoft wants to suggest that all open source infringes its patents, but this is like saying all proprietary software does, too, just because a few companies might. Bob Muglia, SVP of Server and Tools at Microsoft, says:
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