Paul Allen’s Legacy: Patent Troll

Last month my father’s old boss and billionaire, Paul Allen, announced he was going to give away the majority of his $13.5 billion net worth to charity. Kudos for Paul! When Paul and Bill co-founded Microsoft I wonder if they had any idea how big an impact their company and the resulting wealth would have on the world? In light of this announcement I was shocked to learn that Paul Allen is using four business method patents he owns to sue Apple, AOL, Yahoo, Google, Facebook and eBay for ‘existing’. Why would Paul do this? Does he need the money?

Who is harmed by Paul’s legal actions? First, you and me (assuming you have a 401K). Second, any startup (like ours) who uses web technologies. We need more innovation in the United States, not less. Software patents, like Paul’s, are bad for business, America and the planet. They simply don’t make any sense for software. When the government grants a monopoly for 20 years it should be for something unique or novel – i.e. a machine, a manufacturing process or pharmaceuticals – not an essential programming technique. Brad Feld has been a long time critic of software patents and he does a pretty good job of explaining why they are a bad idea:

• The financial cost of defending yourself against a software patent claim are impossible to overcome. Just to analyze whether the claims being made against you are justified will incur legal fees in excess of $50,000.00, and more than $1 million in legal fees before trial. Yet it costs the price of a postage stamp for a software patent holder to make a legal claim against you. (http://www.wsgr.com/PDFSearch/09202004_patentpirates.pdf)
• Economic research demonstrates that software patents are acting as a drag on the US economy. (http://en.swpat.org/wiki/Studies_on_economics_and_innovation)
• Programmers – those skilled in the art of writing software, would be expected to benefit from, and support the patenting of software. They do not. They uniformly despise them as a limitation on their art.(http://ec.europa.eu/internal_market/indprop/comp/analyses_en.htm)
• Venture capitalist like me, who work with new innovative start-ups can testify that software patents have a chilling effect on the market. (http://en.swpat.org/wiki/Statements_from_venture_capitalists)
• With well over 200,000 software patents having been issued, non practicing entities and hedge funds are buying up tens of thousands of these trash patents and using them to extract hundreds of millions of dollars from US companies. This activity takes the form of a protection racket. (http://www.techdirt.com/articles/20100217/1853298215.shtml)

The WSJ explained how broad Paul’s patent claims are:

Patent Claim: Browser for Use in Navigating a Body of Information, With Particular Application to Browsing Information Represented by Audiovisual Data

Implication: “The specific example in the patent might be for a news aggregator, but the patent could have applications far beyond news. The suit says the defendants are infringing the patent “by making and using websites, hardware and software to categorize, compare and display segments of a body of information.” That quote describes a lot of websites.“

Patent Claim: Attention Manager for Occupying the Peripheral Attention of a Person in the Vicinity of a Display Device

Implication: “AOL, Apple, Google and Yahoo are the only companies alleged in the suit to have violated these patents. But again, the patent is for a tool that is ubiquitous online, particularly on websites that give users real-time news updates.

Alerting Users to Items of Current Interest

Implication: “Theoretically it could apply to anything that uses technology to alert you to something you’re interested in. It’s important not only for news but for e-commerce — think about notices when an item you like is on sale or when a bid has been placed on something you’re watching. This patent is the only one in the suit that all the companies are alleged to have violated.”

Brad should add Paul to the list of folks who should see Patent Absurdity.