A long time ago when Bill Gates was not yet the world’s richest man and Microsoft hadn’t yet become the giant that it is today, the man and his company had very different views on the patenting of software than they subscribe to now. These views, although well-known to the IT industry, are worth reiterating here because the rest of the world is not so familiar with the radical transformation that has taken place in Gates view and that of Microsoft.
Here’s what Gates wrote in an office memorandum in 1991. “If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today. . . I feel certain that some large company will patent some obvious thing related to interface, object orientation, algorithm, application extension or other crucial technique.”
This was the year after Microsoft launched Windows 3.0, the first of its new operating systems that would become hugely popular across the world. Yet, three years down the line, Microsoft had changed from a kitten that was content with copyright protection to an aggressive patents tiger. In 1991, Microsoft had filed fewer than 50 patent applications whereas last year it was awarded 1,637 patents, almost a 12 per cent increase in the number of patents it received in 2006. According to IFI Patent Intelligence, the rise in Microsoft’s patents portfolio bucked the general trend in 2007 when the number of patents issued by the US Patents and Trademark Office dipped by 10 per cent. Apparently several thousand of the company’s filings are still pending.
All this may prompt the reader to conclude that there is indeed a direct correlation between IPR and growth — and wealth — as the company claims. Not true, says Mark H Webbink, a US Supreme Court lawyer who is a recognised voice on IT issues. Charting the company’s revenues, R&D spending and patent filings from 1985 onwards, he shows that the spike in patent filings occurred long after the Microsoft “had become well established and was being investigated for its monopolistic practices”. Webbink contends that patents did not spur the launch and rapid growth of the mass market software industry. On the other hand, patents have become a threat to software innovation, he warns.
The software industry, mired in thousands of patent suits, now appears to have seen the light of day. A group of high-tech companies that includes Microsoft is in the forefront of a campaign to reform a lax patent system (see “When IT Giants Clash With The Pharma Industry”, June 11).
Unsurprisingly, Microsoft is one of the leading causes for such infringement suits, a case of the company being hoist with its own petard, as critics claim. Take just the last 10 days. The software giant was the star turn in several patent dramas involving companies across the world, and in none of these has it come out too well.
The most stunning verdict was heard on July 29 when Microsoft was ordered to pay Alcatel-Lucent $511.6 million in damages and interest, raising exponentially the $357.7 million penalty that a federal jury had awarded the Paris-based companies in April. In a case that has been dragging for five years, the jury found that the software giant had infringed an Alcatel patent that covers how software users select a calendar date from a menu in certain programmes. The jury also awarded Alcatel-Lucent $10.4 million from Microsoft for infringing a patent related to the use of a stylus on a tablet computer.
Three days later there was more grief. A federal appeals court in Washington revived a case against Microsoft that had thrown out by a trial judge. Here, the company is accused of infringing six patents related to digital imaging that are owned by Research Corporation Technologies (RCT), a technology company based in Tucson, Arizona. The company sued Microsoft in 2001, claiming the printer commands in Microsoft Windows and other Microsoft products infringed the patents. The damages it is claiming are in excess of $ 500 million, according to the RCT attorney.
These patent disputes, as the reader would have gathered, do not relate to major technological breakthroughs. In software, say experts, almost everything is based on the same tiny set of mechanisms and the problems are solved by applying more or less similar solutions. This is why software giants are now pressing for patent reforms.
As for the mouse in the headline, here’s the story. Microsoft, which is usually at the receiving end of patent suits, has filed an infringement case against Primax Electronics of Taiwan for using its mouse technology. Microsoft claims Primax has violated seven of its patents related to two technologies, TiltWheel and U2, which are use in the computer mouse. The interesting point is that this relates to hardware technology, not software.