Tuesday, 14 May 2013

New Zealand to Outlaw Patents on Software

Guest post by Dale Halling 

According to Kiwi Blog, which calls this “A good move from the Gov’t on patents,” there is a new Patent Bill that will prohibit patents on software.

Logically, this suggests that there is something special about software that is incompatible with patents. In order to determine this, we first have to have a clear understanding of what software is and what a patent is.

A patent is a property right that a person earns by creating a new invention. But what is an invention? An invention is anything created by man that has an objective result. This definition clearly delineates that inventions are not things in nature, or things occurring naturally. An invention, also, is not everything created by man. For instance, a painting or a song are creations of man, but they do not have an objective result. Songs and paintings fall into the category of aesthetic creations. Their goal is to elicit a subjective response and people will react differently.

An invention has an objective result. For instance, a controllable heavier than air powered craft, such as the Wright brothers invented has the objective result of controllable powered flight. Software is a set of written instructions that are converted by a compiler (interpreter) into a wiring scheme that opens and closes transistors. Software that is not converted into instructions is just a bunch of bad writing.

Now that we have a clear definition of a patent and of software, we can examine whether there is something special about software that would cause it to not be patentable. The written instructions of software do not have an objective result, not unless they converting into a wiring scheme. Therefore, software code is not patentable. No country has patent laws that apply to software code. The way this is normally stated is that software per se is not patentable.

If this was all the New Zealand bill was proposing, we could stop here. But all indications are that the proposed law would not allow patents for inventions in which software was used to wire an electronic circuit. As any electrical engineer knows and software developer should know, solutions to problems implemented in software can also be realized in hardware, i.e., electronic circuits. The main reason for choosing a software solution is the ease in implementing changes, the main reason for choosing a hardware solution is speed of processing. Therefore, a time critical solution is more likely to be implemented in hardware; while a solution that requires the ability to add features easily will be implemented in software.

Software is just a method of converting a general purpose electronic circuit (computer) into an application specific electronic circuit. If software is not patentable it leads to absurd results. For instance, if I design a pacemaker using logic circuits, it is patentable. However, if I use a microcontroller to do the exact same thing, it is not patentable.

Software per se is not patentable. Executed software is just a way of wiring an electronic circuit. Electronic circuits have objective results, are a creation of man and therefore an invention. There is no logical reason to distinguish between software-implemented inventions and other inventions. This bill is based on emotion or an anti-property rights agenda or both.

Dale Halling is a rarity among bloggers. In addition to his law degree, he hold a BS in Electrical Engineering and an MS in Physics. He is an attorney specialising in intellectual property, and the author of the book “The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation.”

29 comments:

  1. I think this argument is nonsense.

    Not so much for it's reasoning but because it isn't addressing the issue.

    If one were to agree that computationally useful instruction sets were an invention worthy of patents one would not be agreeing that software patents as they exist in reality are good.

    Because what passes for a patent these days is not precise enough to be a computationally useful instruction set.

    A description of a process to be achieved in software is insufficient to be called an invention of useable software. It is just an idea some one has to implement in code and once that's done it's the implementation that is the useful invention.

    So one does not have to take a position on the appropriateness of software patents to take issue with an argument that supporting patenting something that is not a working implementation is an error.

    If it can't run it isn't useful software.

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  2. I think this is a *good* move.

    Software *already* has protection via licenses. It does not need patent protection as well.

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  3. Reform is certainly needed to deal with patents which are vague or too broad, but we're throwing the baby out with the bathwater here.

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  4. I am so computationally illiterate that no Software for Dummies book ever printed could hope to reach down to my level. However, a key word is apparent in this post. Writing.
    If something is written, say an electronic language that instructs hardware, and is original, could it not be copyright and have the same protection against others publishing or plagiarising?

    George

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  5. A patent is not a property right earned by creating a new invention. That is nonsense and wrong. I hope is this was not written with deliberate intention of committing deception on readers.

    A patent is the award of a limited commercial monopoly and special legal priviledge by government to an application by a supplicant. Any particular application may or may not be successful. The government decides according to its own machinations. Patent is not called into existence by the creation of a new invention and is not a property right. It is a legal permission granted after petition for same by supplicant.

    Amit Cim PhD

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  6. A patent is not a property right earned by creating a new invention. That is nonsense and wrong. I hope is this was not written with deliberate intention of committing deception on readers.

    You may have missed this blogs philosophical position often supporting Ayn Rands arguments that there is such a thing as intellectual property and patents should be a property right.

    In brief the argument derives from the observation that the very idea of ownership is an intellectual exercise and can be applied to anything of value including intellectual effort.

    Whether or not one accepts the argument is beside the point to me of the issue of software patents because patents are not constructed and implemented in a way to make them relevant to it.

    The patent process protects speed and skill at manipulating beauracracy and litigation skills as it is constituted today and does not require a valuable invention to be used to suppress competition and extort wealth so the argument to the very validity of patents as ownership of intellectual creation of wealth is moot.

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  7. All but one comment fails to actually address the fundamental questions and it fails to address it in a fundamental manner. Property rights are the result of creation, they are not monopolies. Inventions are a creation of man and therefore subject to property rights.

    Not one comment actually addresses the fact that banning software logically requires the banning of all patents on electronic circuits. It appears that logic is beyond the anti-patent crowd.

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  8. Couldn't agree more Amit Cim and Fentex, patent law has become just another way for monopolies to avoid competing on the free market.

    Making software non-patentable is a good first step, hopefully more industries follow

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  9. BTW George, software already has copyright protection because it is written work

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  10. Sam, Amit, Fentex et al, unlike Mr Halling here (or myself in earlier posts which are linked here through the tags) you've posited no argument for your assertion that patent law is a monopoly, you've simply asserted without evidence that you or anyone else should feel free to take, at your whim, another person's invention. Another person's *property*.

    This is very much NOT beside the point. It IS the point.

    There is a word for that sort of behaviour.

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  11. Peter-

    Patents (as I understand them) are by definition government-created monopolies; they grant an inventor exclusive rights to produce/use/sell/etc their invention, therefore giving them a monopoly over said invention.

    You claim I believe I have the right to take any invention, but this is a straw man. It's still illegal to copy software, but the outcome it produces can be replicated, allowing innovations to build on one another.

    My objection to over-reaching IP laws can be perfectly summed up by the (otherwise rather baffling) paper you link to on your blog (http://mises.org/pdf//asc/2003/asc9simpson.pdf) in an attempt to discredit externality theory:

    "...people would have to compensate the owners of the first fast-food restaurant that used a drivethrough window, the first airline that gave out frequent-flyer miles, the first store owner who came up with the idea to allow customers to buy merchandise on layaway, and the first cook to create a great recipe."

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  12. @Sam, no you don't understand them. A patent is no more a "monopoly": than are the title deeds or deeds of ownership to your house, your car, or your work of art.

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  13. Well maybe if a title deed to a house or car mandated that no one could own a similar one...

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  14. Sam, in fact that is perfectly irrelevant, and as Adam Mossoff points out,
    “This claim is profoundly mistaken. For much of its history, a patent was defined by Congress and courts in the same conceptual terms as property in land and chattels, as securing the exclusive rights of possession, use and disposition.” .

    What is fundamentally protected by any form of property protection, from title deed to patent deed, is the value you have in your property--value you've either created yourself, or traded for value you've created. It's yours, and wouldn't exist without you.

    So as Austrian economist George Reisman points out, protection of that value does not constitute a monopoly.

    “Patents on new inventions, copyrights on books, drawings, musical compositions, and the like, and trademarks and brandnames, do not constitute monopolies. True enough, they reserve markets, or parts of markets, to the exclusive possession of the owners of the patents or copyrights, or trademarks or brandnames, and they do so by means of the use of [the government’s] physical force inasmuch as it is against the law to infringe on these rights.
    “None of these rights represent monopoly, however, because none of them is supported by the initiation of physical force. In all of these cases, the government stands ready to use physical force in defence of a pre-existing property right established either by an act of personal creation or by the fact of distinct identity.. .
    “The fact that the government is ready to use force to protect patents and copyrights is fully as proper as that it stands ready to use force to protect farmers and businessmen in their ownership of their physical products [or once used to] and to come to their rescue when they are set upon by trespassers or attacked by robbers [or once used to].”

    Further:

    “The existence of patents and copyrights, and trademarks and brandnames, like all other protection of property rights, serves to increase the supply of goods and service—by making it possible for those who are the cause of the increase to benefit from the improvements they make. It thus serves to reduce prices and to increase everyone's buying power as time goes on. [What patents and copyrights protect comes under the heading of something new that is more efficient: namely new more efficient methods of satisfied in other ways, by different goods. . . Even if the price does not drop at all for the time being, the reinvestment of profits made by virtue of the cost-cutting improvement will operate to increase production and reduce prices somewhere else in the economic system.]
    “Contrary to [the case with] monopoly, patents and copyrights, and trademarks and brandnames operate to increase supplies and reduce prices, while their abolition would result in the opposite. Indeed their existence must be considered a requirement of the freedom of competition, and their abolition as constituting the establishment of monopoly! Their existence upholds the fundamental freedom of individuals to be secure in their property and to compete on that basis. TGheir abolition would reserve markets to the dull and incompetent by means of the the initiation of force against the intellectual property of those who had new ideas and something better to offer. Their abolition would thus serve to establish the monopoly of the dull and incompetent by forcibly depriving the intelligent and competent of the benefit of their intelligence and competence, and thereby forcibly excluding them from the market.”
    - George Reisman, ‘Patents and Copyrights, Trademarks and Brandnames, Not Monopolies,’ in Capitalism

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  15. Fentex

    Ahh. I understand what you mean. But I am also still disappointed in the inaccuracy of the idea the author prepared and made.

    Amit

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  16. That's a seriously well thought out reply, I apologise for my somewhat trollish last comment.

    It seems we agree on a number of points:

    - that patents "reserve markets, or parts of markets, to the exclusive possession of the owners of the patents". This is what I meant when I used to term monopoly.
    - that innovation is crucial to economic success, and should be encouraged.

    We do seem to disagree on the definition of a monopoly, which you define (via Reisman) as protected through physical force. As far as I can tell this is not a standard definition, so you can see how a misunderstanding could occur.

    I also disagree that treating IP just as you would other property rights results in maximum innovation. This would require patent rights existing indefinitely, which would, in the words of Ayn Rand:

    "lead, not to the earned reward of achievement, but to the unearned support of parasitism. It would become a cumulative lien on the production of unborn generations, which would ultimately paralyze them. Consider what would happen if, in producing an automobile, we had to pay royalties to the descendants of all the inventors involved, starting with the inventor of the wheel and on up. Apart from the impossibility of keeping such records, consider the accidental status of such descendants and the unreality of their unearned claims."

    Would you have patent rights be perpetual?

    Reisman's analysis ignores the fact that patents make innovation more expensive, as an innovator has to pay (monopoly) compensation to inventors whose work he has built upon. Also, costs are increased through the government bureaucracy required to decide what's patentable, patent searches, and lawsuits. Surely this is the sort of waste libertarians should be trying to avoid?

    I mean shit, the wiki for the Ludwig von Mises Institute states that modern libertarians consider the property intellectual property to be "self-contradictory". Check it out (http://wiki.mises.org/wiki/Intellectual_property), it's a pretty good article.

    Ideally, I'd like an intellectual property system where inventors are compensated for the value their invention brings to society, allowing for the fact that, given time, someone else would have made the breakthrough. I'm sure a political scientist/economist could come up with a market to determine what this value is.

    Completely off the top of my head, I'm imagining an Kickstarter-style system where an innovator posts the outcome of their invention, and interested parties (including the govt) pledge money towards the invention's method being released into the public domain. The innovator can accept at any point, but the catch is that if another innovator comes up with the same invention in the mean time, their monopoly over the idea would cease, and either innovator (but not both) would be eligible for the compensation. This should make the compensation correspond to the invention's level of innovation or novelty (with this being measured by how long it would take for another party to develop the same invention).

    Who knows if that would work! But in the mean time, I'd advocate a shorter patent lifespan, maybe down to 2-5 years (after commercialisation) depending on the pace of the industry. Finally, patents should expire if not being exercised, as nothing could be more disruptive to innovation.

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  17. Well, I think it is critical issue and people have different opinion on this but more important thing is the majority.
    Laptop Repair Melbourne

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  18. Peter Cresswell

    You write this

    " you've simply asserted without evidence that you or anyone else should feel free to take, at your whim, another person's invention. Another person's *property*."

    What I wrote does not include any of that. You made it all up.

    Why do you write lies about what I write? That just makes you a liar. What a dishonest thing to do. What I did write is available for readers to see. It does not include what you are putting.

    If you want express disagreement with what I wrote there are civilised ways to do that. You failed. It is a disappointment.

    Amit Cim PhD



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  19. Not one comment actually addresses the fact that banning software logically requires the banning of all patents on electronic circuits

    I dispute this conclusion, as did the many people who expressed the opinion that the wording of the act in question made it unclear what it was meant to encompass. The phrase "as such" was clarified in the legislation for the express purpose of making it clear that it would encompass devices that include but are not solely software.

    The recent discussion, addressed in the legislation, was dominated by consideration of what would be protected and language that satisfied most participants was found that does select some devices without encompassing all software without excluding all electronic circuitry.

    You've posited no argument for your assertion that patent law is a monopoly, you've simply asserted without evidence that you or anyone else should feel free to take, at your whim, another person's invention. Another person's *property*.

    Though people argue and this blog apparently exists in part to promote the philosophy that invention is property it is not in law. In law it may, or may not, be granted legal privileges.

    So while a person holding the position that it is may fervently and passionately assert that it is property in a legal context no matter how thorough and rigorous their reasoning they are incorrect. It is a legally protected privilege treated differently to property.


    Not that this is an argument I've made here before (I think) but I have disputed the claim that it isn't a monopoly.

    A patent is no more a "monopoly": than are the title deeds or deeds of ownership to your house, your car, or your work of art.

    Exactly, they are the same kind of monopolies. Disagreement lies in the of the word.

    It is a monopoly in the same way ownership of property is a monopoly on that. It is not a monopoly by a narrow and no doubt useful definition employed in certain circumstances but when people speak of patents being a monopoly they mean it restricts control to a sole entity.

    The word has more meaning than the narrowest of academic ones employed by some.

    In some contexts it is the name of a game, in others a technical definition of trade control, most often it is one entity in control.

    It isn't much of an issue to argue over as it does little but distract from the core issue of whether or not intellectual invention creates a property right. If that argument is settled then what is left is merely mechanical issues of how best to implement it.

    you've simply asserted without evidence that you or anyone else should feel free to take, at your whim, another person's invention.

    I feel miss-characterised by this.

    I think I have been clear in this argument that I believe the issue of whether or not intellectual invention may create a property right is beside the point regarding patents because as they are construed today they do not protect invention.

    I have not been arguing invention ought not be protected, not even arguing that it is not a property right, but that patents do not protect invention.

    With regards to software; patents prevent invention and innovation because they are granted not for provably productive software but for simple ideas of no value absent implementation which is not required by patent.

    As such they reward manipulation of the patent bureaucracy and skill and expense in litigation to be wielded as weapons against people trying to produce actual valuable work.

    And I would think, for the Randian/Libertarian philosophy, in practice represent the very anti-thesis of what is desired. They reward the non-productive law weilders by suppressing the would be atlas.

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  20. Fentex
    This is true! "Though people argue and this blog apparently exists in part to promote the philosophy that invention is property it is not in law. In law it may, or may not, be granted legal privileges. So while a person holding the position that it is may fervently and passionately assert that it is property in a legal context no matter how thorough and rigorous their reasoning they are incorrect. It is a legally protected privilege treated differently to property." You are right! That makes sense.
    To the claim that, "A patent is no more a "monopoly” than are the title deeds or deeds of ownership to your house, your car, or your work of art.”, you responded in the affirmative. You write, ”Exactly, they are the same kind of monopolies. Disagreement lies in the (use) of the word.” Then you continue, “It is a monopoly in the same way ownership of property is a monopoly on that. It is not a monopoly by a narrow and no doubt useful definition employed in certain circumstances but when people speak of patents being a monopoly they mean it restricts control to a sole entity.”
    A difference between the patent’s limited commercial monopoly and the title deed to property is that the patent is a grant of control over all people and property within the territory that government claims sovereignty upon. When I get a patent awarded to me, I am allowed permission to exert a control over every person and their property. I am allowed to prohibit them from doing some things, like making a device or invention the same as the one I did even if they use their own private property to do it. The title deed to this house, as example, did not do that. The one for this place did not generate a claim of control over other people and their property. They can still live in their places without worrying about what is over here or even knowing about it. I can’t go over there and tell them they have to brick up the door because my place has one just like it OR ELSE.
    Also I remember that the patent with its limited commercial monopoly only comes into existence because of a grant by a government. This is not necessarily the same for other property.
    Amit

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  21. When I get a patent awarded to me, I am allowed permission to exert a control over every person and their property.

    I am allowed to prohibit them from doing some things, like making a device or invention the same as the one I did even if they use their own private property to do it.

    The one for this place did not generate a claim of control over other people and their property.

    They can still live in their places without worrying about what is over here or even knowing about it.

    I can’t go over there and tell them they have to brick up the door because my place has one just like it OR ELSE.


    I understand the difference. I called patents and property rights similar monopolies only in the meaning they restrict what control they involve to single parties.

    As you point out the natures of what they control is different, due to the differences in the nature of physical ownership and intellectual privilege.

    Also I remember that the patent with its limited commercial monopoly only comes into existence because of a grant by a government. This is not necessarily the same for other property.

    That isn't so clear - the proposition (which I am not arguing as I feel it is beside the point of the inappropriateness of patents as they are implemented) that all ownership, which we protect through law, is an intellectual concept makes a case that the government and it's organs of force and imposition can equally legislate on physical and intellectual items is a different argument to me than the validity of trying to make patents work at all.

    Which, in the topical case of software in particular I believe it does not.

    I think you present the beginning of an argument that the nature of conceptual entities differs from the physically tangible such that the proposition they can be treated equally may fail.

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  22. "I am allowed to prohibit them from doing some things, like making a device or invention the same as the one I did even if they use their own private property to do it."

    Government protection is limited to persons under it's control. How do you identify these persons in order that you do not injure fair use of your patented mechanism?

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  23. Fentex

    "I understand the difference. I called patents and property rights similar monopolies only in the meaning they restrict what control they involve to single parties."

    OK. I follow you. I am cautious about treating them as similar though. There are some important differences which are easily lost in discussion. Too many times people go on to use analogies to flit from one to the other, never quite making a case while, to the casual reader, seeming as if they have managed to. Remarkable! THis is why it is better to take them separately, each one on its own fundamentals & characteristics. They ARE different.

    "I think you present the beginning of an argument that the nature of conceptual entities differs from the physically tangible such that the proposition they can be treated equally may fail."

    It does fail. They are not the same. They can't be treated the same. To attempt to is not logical.

    Did you read in law?

    Amit

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  24. Fentex

    I do not mean my final question as rude but I see it could be taken as ill mannered. Not intended that way at all. I was only interested in whether you were at law or how you got interested for it.

    Amit

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  25. Administration of any property system requires clear boundaries. The problem with software as described in patent applications is that the claims are as broad as possible which makes it intractable. Think of it like drawing smoke trails in the air. From the PoV of the pilot, it is self-contained but when you project it down to the ground reality, you'd end up with multiple overlapping claims. In this situation, it is easier (at least for small country like NZ) to just give everyone the freedom to operate and avoid the social deadweight costs.

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  26. Did you read in law?

    No, some economics though my major was science and I never did complete a degree.

    I make my living in software and have worked in the arts so my interest in economics is kept stimulated by the topicality of my work and the new digital ecosystem we increasingly live in.

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  27. Its really informative the key points mentioned here said to be very considerable and it would be a good idea to have these kind of information to workout in business affairs.

    Hvac Service Management Software

    ReplyDelete
  28. "Software per se is not patentable. Executed software is just a way of wiring an electronic circuit. Electronic circuits have objective results, are a creation of man and therefore an invention. There is no logical reason to distinguish between software-implemented inventions and other inventions. "

    Electronic circuits do not have objective results until you assign values the high and low voltage. A collection of wires with make an AND gate if high is the binary value 1, and an OR gate if low is the binary value 1. Whether you do your symbol manipulation by building a specific algorithm computing machine or feeding proper input into a machine implementing some general-purpose algorithm, the function proceeds from symbolic manipulation, and not from electrons and voltage levels.

    Machines are eligible for patents, but just because you do a math (symbolic manipulation according to fixed rules without the intervention of intuition) with thing, doesn't mean you should be able to patent math (which is all software fundamentally is)

    This contains a very solid argument as to whey software is math.

    http://www.groklaw.net/articlebasic.php?story=20121013192858600

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  29. hi..Im student from Informatics engineering, this article is very informative, thanks for sharing :)

    ReplyDelete

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