Date: Thu, 2 Mar 2000 12:22:09 -0500 (EST)
From: Gregory Aharonian 
Message-Id: <200003021722.MAA09448@world.std.com>
To: patent-news@world.std.com


    --  CRITIQUE OF STALLMAN'S BOYCOTT OF AMAZON

Greg -
Here is an article I wrote recently on the Amazon Boycott for my institute's
magazine, Fraser Forum.  It appears in our current March issue.  I am
assuming you operate a news service on Internet patents.  Is it possible
for you to distribute this article.  All I ask is that its source be
identified.

Should we Boycott Amazon.com for Its Internet Patents?

Owen Lippert,
Director, Law and Markets Project
The Fraser Institute, Canada

The recent bombarding of the Yahoo, HMV, E-Bay and Amazon.com web sites with millions of "requests" comes amidst growing tension between the Internet's hacker and e-business communities. This is not to suggest a connection, but a climate. One of the most heated topics of disagreement involves the patenting of business practices used on commercial web sites. Things heated up last December when Richard Stallman, president of the Free Software Foundation, called for a boycott of Amazon.com, the highly successful on-line bookseller. Amazon's cyber-sin? It patented "One-Click Shopping", its method for shopping on-line. Not only did Amazon patent it, the company actually defended it by suing another on-line bookseller, Barnes & Noble, for alleged infringement. Amazon has secured a preliminary injunction. The boycott has attracted some support, though how much is hard to tell. Who's right? Who's wrong? And why?

First, Mr. Stallman, President of the Free Software Foundation and an early Linux proponent, confused the issue by imprecisely describing just what Amazon had patented. In his Linux Today article, he appears to accuse Amazon of having patented software, specifically a "cookie", a small bit of computer code downloaded into your computer when you visit web sites. Amazon's One-Click cookie tells the company who you are - if you've bought before - eliminating your having to re-send your address and credit card number. In fact, Amazon patented its method of using cookies to identify previous buyers, not the technology for doing so.

Mr. Stallman accuses Amazon of plotting to monopolize an idea so simple and fundamental that the failure to disseminate it freely will slow the growth of e-commerce. To Mr. Stallman, such action, even if legal, is unethical, if not downright immoral, hence the call to boycott. He also criticizes the scope of all such Internet patents. The US Patent and Trademark Office (USPTO), he argues, uses too low a standard in granting patents for business practices. He sees such "inventions" as neither new nor non-obvious, two of the three patent criteria. As for the third, usefulness, he asserts that software in general is most useful as non-proprietary knowledge.

For the record, Amazon holds a legally valid patent. It demonstrated to a patent examiner's satisfaction that the One-Click idea was new, that it was not obvious from what was known more than a year before the date of application, and that it had a use. To invalidate the patent, all someone has to do is prove that the idea was known or in use a year before Amazon's patent application filing date of September 12, 1997. Computer friends contend prior examples abound. Indeed, the USPTO's own web site appears to use a form of "One-Click Shopping".

Is Amazon's behaviour, nevertheless, unethical? No. When Amazon's founders took other people's money to build a business, they promised to act in the interests of their investors, short of breaking the law. They had, at least, to try to patent one of their business innovations before somebody else did. Amazon CEO, Jeffrey Bezos, may agree personally with Mr. Stallman. Yet, he would breach the trust of millions of shareholders if he gave away company resources for reasons other than to improve its business. If Amazon has done nothing unethical, there is no justification for a boycott, a protest form usually reserved for high moral causes, not disagreements over patent scope.

Are Internet-related business practice patents by their nature too broad? Only the USPTO grants them, and really only since 1994. Patent offices in Canada, Europe and Japan do not - yet. Mistakes have ocurred when new industries have started to patent their technologies. Fortunately, we have courts to deliberate these questions, though over time. The US Court of Appeals upheld a patent process in July 1998, but it will be a long time before we can ask, "Is that your final answer?"

Settling patent questions with lawsuits may seem inefficient, but it works. If only a few potential infringements exist, Amazon will pursue them in court. If thousands of infringements possibly exist, the cost of litigation becomes prohibitive. The fact of so many infringers reflects upon the appropriateness and practicality of the original patent.

Is Mr. Stallman correct that software development would proceed faster without patents? Probably not. Essentially, he's arguing that software be treated the same as, for example, physics. It should exist in a public science environment in which discoveries are immediately published and information shared freely. Private science, even with proprietary knowledge, has a strong case to be as innovative, if not more, than public science. Money motivates. Market demand as much as a desire to make "cool stuff" has fueled the improvement of software. Microsoft's Bill Gates deserves no less technical respect than Linus Torvalds, creator of Linux.

Beyond which is the stronger incentive, money or peer cheers, lies the more relevant question of "Who funds the fun?" Taxpayers, for the most part, fund theoretical physics because no one else will. If business will fund applied software development, then the taxpayers shouldn't have to. Yes, it might be fun to write code for code's sake, but programmers have no stronger case than architects or engineers. Patent protection helps to ensure business will invest in software research.

The real challenge with business patents on the Internet is the same as with all things in binary code. If anyone can copy anything cheaply and easily, enforcing a patent is like herding cats, lots of cats. Digital patent enforcement will require a combination of better technology and deeper understanding of the benefits of robust intellectual property protection. Hackers can and should lead the way in both. Mr. Stallman's Amazon boycott is a click in the wrong direction. The way forward lies between no visits and a million bogus visits. 

Owen Lippert
Director, Law and Markets Project
The Fraser Institute
Suite 200 134 Sparks St.
Ottawa, Ontario
K1P 5B6

phone: (613) 565-0468
fax:   (613) 565-3020
e-mail owenl@fraserinstitute.ca
http://www.fraserinstitute.ca


Date: Fri, 3 Mar 2000 03:00:34 -0500 (EST)
From: Gregory Aharonian 
Message-Id: <200003030800.DAA20739@world.std.com>
To: patent-news@world.std.com

Greg - Here is a criticism of Lippert's defense of Amazon - Bob


                                       ==
Owen Lippert (OL below)
Director, Law and Markets Project
The Fraser Institute, Canada
owenl@fraserinstitute.ca

Dear Mr. Lippert -

I read your critique of R. Stallman's call for a boycott of Amazon and
I think you missed the boat. This isn't surprising, somehow the mere
association of an idea with Richard Stallman causes an opposition that
leads to illogical thinking. Regardless of the merits of Mr. Stallman's
position, you have made so many incorrect assumptions in your logic that
I felt compelled to attempt to correct at least some of them.

In addition, the loosely veiled association of the recent DoS attacks
with Mr. Stallman's proposal, or the opposition many people have to
Amazon's inappropriate enforcement of an almost certainly invalid patent
is uncalled for.

Sincerely,

Robert Dezmelyk (RD below)
robertd@pointing.com

Should we Boycott Amazon.com for Its Internet Patents?

OL writes: For the record, Amazon holds a legally valid patent. It demonstrated to a patent examiner's satisfaction that the One-Click idea was new, that it was not obvious from what was known more than a year before the date of application, and that it had a use.

RD responds: Under our legal system the patent is granted a presumption of validity, but no one knows (except perhaps those who filed the patent) whether it is valid or not. Demonstrating to a patent examiner's satisfaction that an idea is new, non obvious, etc. is a very low threshold. Any reader of Greg's newsletter knows that most recently filed software and business process patents have had but the slightest scrutiny applied to them, and the examiners regularly grant patents without even a rudimentary review of existing art or any real knowledge in the subject area.

OL writes: To invalidate the patent, all someone has to do is prove that the idea was known or in use a year before Amazon's patent application filing date of September 12, 1997. Computer friends contend prior examples abound. Indeed, the USPTO's own web site appears to use a form of "One-Click Shopping".

RD responds: Yes, that's all one has to do. But the expense of doing so is enormous, and the patent holder can sue others with impunity, creating great economic cost for the defendants regardless of the merit of its case or its patent. If as you friends contend prior examples abound then the PTO should never have granted the patent. If that is the case then quite possibly the people who applied for the patent knew that as well.

OL writes: Is Amazon's behaviour, nevertheless, unethical? No. When Amazon's founders took other people's money to build a business, they promised to act in the interests of their investors, short of breaking the law. They had, at least, to try to patent one of their business innovations before somebody else did. Amazon CEO, Jeffrey Bezos, may agree personally with Mr. Stallman. Yet, he would breach the trust of millions of shareholders if he gave away company resources for reasons other than to improve its business. If Amazon has done nothing unethical, there is no justification for a boycott, a protest form usually reserved for high moral causes, not disagreements over patent scope.

RD responds: You're wrong here. First off, in many of these software and business process patents the applicants cite little or no prior art, and yet they have signed a statement, under oath, that they will disclose all art they are (or become) aware of, and that they have diligently searched. I think we can both agree that making a statement under oath that you looked real hard and couldn't find any prior art seems rather unethical if everyone else can find the prior art without much (or any) effort at all.

RD continues: Secondly, as a businessman nobody says you have to patent anything, particularly if you didn't invent anything. Finally, and most importantly, just because a governmental entitity wrongly grants you a right doesn't mean it is ethical to exploit it. Let me give you an example removed from the mindset of the patent world. Assume for a moment that I file a registration of a deed in your local registry of deeds. Somehow, due to the negligence of a clerk there my deed is mixed up with yours and I now have a deed on file for your property. By your theory I should just go ahead and evict you from your home, and hope I can win in court when you sue for the return of your property. But surely you wouldn't consider that ethical action on my part would you? Even if it would improve my balance sheet and please my stockholders?

OL writes: Are Internet-related business practice patents by their nature too broad? Only the USPTO grants them, and really only since 1994. Patent offices in Canada, Europe and Japan do not - yet. Mistakes have ocurred when new industries have started to patent their technologies. Fortunately, we have courts to deliberate these questions, though over time. The US Court of Appeals upheld a patent process in July 1998, but it will be a long time before we can ask, "Is that your final answer?"

RD responds: Yes, and in the mean time consumers will fork out tens of millions of dollars due to the added costs generated by the carelessly granted patents.

OL writes: Settling patent questions with lawsuits may seem inefficient, but it works. If only a few potential infringements exist, Amazon will pursue them in court. If thousands of infringements possibly exist, the cost of litigation becomes prohibitive. The fact of so many infringers reflects upon the appropriateness and practicality of the original patent.

RD responds: No, it just drains millions of dollars away from consumers and transfers it to lawyers and expert witnesses. (And we do that kind of work, so I face both the cost and the benefit).

OL writes: Is Mr. Stallman correct that software development would proceed faster without patents? Probably not. Essentially, he's arguing that software be treated the same as, for example, physics. It should exist in a public science environment in which discoveries are immediately published and information shared freely. Private science, even with proprietary knowledge, has a strong case to be as innovative, if not more, than public science. Money motivates. Market demand as much as a desire to make "cool stuff" has fueled the improvement of software. Microsoft's Bill Gates deserves no less technical respect than Linus Torvalds, creator of Linux.

RD responds: No need to speculate about this. Software patents didn't exist to any significant extent until the mid 1990s. So all you need to do is compare the rate of progress and innovation in the computer software industry during the period before software patents and now in the period since software patents. Lets think of a few of the things that were developed without the incentive of software patents:

Just what great innovations have occurred since the mid 1990s that occurred as a result of the patentibility of software? Has the rate of fundamental innovation increased? Are their more new products and technologies? No. If anything the rate of fundamental innovation has slowed, and much more money, time and intellect is being directed to using the technology developed before software patents came into prominence. The data shows exactly the opposite of your conclusion - and you don't need to say "probably" when you look at the reality of what happened.

With respect to your comment regarding Bill Gates and Linus Torvalds, perhaps you've been reading too much Microsoft PR. Mr. Gates is a brilliant businessman. Everyone knows he is not noted for technical innovation. His company bought most of its core technology, and is renowned not for its innovation but its ability to rapidly adopt, market and exploit other's innovations.

OL writes: Beyond which is the stronger incentive, money or peer cheers, lies the more relevant question of "Who funds the fun?" Taxpayers, for the most part, fund theoretical physics because no one else will. If business will fund applied software development, then the taxpayers shouldn't have to. Yes, it might be fun to write code for code's sake, but programmers have no stronger case than architects or engineers. Patent protection helps to ensure business will invest in software research.

RD responds: Wrong again. Just think about how much business invested in software research before software patents became prominent. Plenty - thats how all those innovations occurred. In fact you had to spend more since the pace of innovation was faster. Now as monopolies prevail there is much less incentive to innovate, and in fact the widespread presence of patents - many totally invalid and wildly broader than they could or should be - reduces investment in software research.

OL writes: The real challenge with business patents on the Internet is the same as with all things in binary code. If anyone can copy anything cheaply and easily, enforcing a patent is like herding cats, lots of cats. Digital patent enforcement will require a combination of better technology and deeper understanding of the benefits of robust intellectual property protection. Hackers can and should lead the way in both. Mr. Stallman's Amazon boycott is a click in the wrong direction. The way forward lies between no visits and a million bogus visits.

RD responds: Not true at all. Due to the way US law operates patent enforcement is much easier than copyright enforcement and there are no exclusions for fair use. There are lots of ways someone can make a legal copy of a copyrighted work, and many rightful limitations on the rights of the copyright holders. Not so with patents. The problem we all face is not legitimate, reasonable patents, but the vast sea of invalid patents that will clog our courts for years and cost tens to hundreds of millions of dollars to clean out. The result of the negligence of the patent office is an environment that stifles innovation, leads to monopolization, and a business environment of extortion and rent seeking instead of competition and innovation. At this point the best solution is for Congress to change the law so that patent holders who lose infringement suits have to pay the costs of the defendants. That would put a damper on those folks that want to use their invalid patents to harass their competition.