Patent and copyright are closely related as both were originally intended to grant a creator exclusive control of an idea or an artistic work for a fixed time. During this period, the creator would be free to try to monetise their creation, after which it would be up for grabs to be used by other creators to build upon. The concept of patents originated in the Greece in 500BC and copyright in Britain in 1710, so both ideas have stood the test of time.

Copyright

During the latter part of the last century things began to change with both copyright and patents being distorted to protect business income. This is most obvious in the US where Congress extends copyright duration every time Mickey Mouse comes close to falling into the public domain. Walt Disney's first creation, Steamboat Willie was released in 1928. Walt Disney has been dead for over 40 years, but with the current state of copyright in the US, Steamboat Willie will remain under the exclusive control of Disney Corporation until 2023 at the earliest, nearly 100 years after the cartoon's debut. Patents have suffered a different kind of rot.

Software patents

The earliest identified software patent dates back to 1962 in Britain with the filing of "A Computer Arranged for the Automatic Solution of Linear Programming Problems". At it's simplest, a software invention could be considered as a novel method for solving a problem, using a computer which comes close to the simplistic definition of a business method, which is basically a method for solving a problem. Coincidentally, most of the countries that don't permit patenting of business methods also don't permit patenting of software.

The problem

The US in particular has seen an explosion in the number of software patents that have been granted in recent years. Unfortunately, as the US patent office is operated to generate a profit, the trend has been towards approving as many applications as possible and letting the court system handle the errors. This has led to a large number of patents being created for what are otherwise obvious solutions, such as the infamous Amazon One Click patent. Patents are also being commonly granted on existing business methods, if the method somehow involves a computer. More recently, this has been taken to the next level by the granting of patents for existing computerised methods, if the medium is different, for example, Microsoft's recent patent on XML.

Patents as a weapon

It's quite easy for software developers to infringe obvious patents, and any company with a substantial portfolio will likely have infringed patents belonging to many of it's software rivals. Therefore, it's in a company's best interest to have as broad a patent portfolio as possible, that it's rivals may have infringed, in order to avoid the risk of a lawsuit. If two such companies were to get into a legal disagreement over the patents the other held, only the lawyers would walk away smiling. It would be Mutually Assured Destruction. This isn't the case for small companies who have to walk the minefield created by the patent office.

Although patents may be issued on trivial software methods, and would be relatively easily overturned in court, the legal costs involved in getting a decision make it financially non-viable to fight. Without a patent portfolio for protection, a small company is a sitting duck. This also means that big companies can infringe small companies patents at will. Another tactic used to put pressure on the little guy is to get a court order forbidding the distribution of the potentially infringing product until the matter is dealt with in court, which could take years. Without a sizable financial backing, a small company would go broke, so it would option but to give in immediately. The recent TomTom case is a prime example of this.

Patent trolls

This term applies to companies that don't produce a product, instead, they simply purchase patents and then sue other companies for infringing on them. The modus operandi usually starts with a lawsuit against a small company that can't afford to fight the troll, leading to a settlement. The money generated is then used to sue progressively larger companies, with the troll working it's way up the food chain. A patent portfolio offers no protection in this case because the troll has no products, so there is no possibility of it infringing the patents belonging to it's target.

What goes around...

Microsoft has been in the news recently following it's patent dispute with with i4i. The story starts with i4i being approached by the US Government following the September 11 attacks, to assist in data analysis. Microsoft became aware of the company's technology from this and decided to incorporate it into Word, eventually building the patented method into the OOXML file format, which was created to compete with the Open Office ODF document format, however OOXML included the technology without licensing it. i4i may sound like a patent troll, but they do have a real product, that uses this technology, so this is a legitimate gripe.

At it's simplest, the patent in question defines a method for manipulating an XML document's content and structure independantly. I'm not a patent lawyer, but this patent does appear to be overly broad, and doesn't really sound like much of a novel invention, yet Microsoft is being dragged through the courts because of it.

This demonstrates the problem that software patents often describe a logical thought process that a programmer would go through in ar normal day-to-day job, rather than an actual invention. That's why software patents are so toxic for companies without deep pockets, because it's easy to accidentally infringe, and the penalties can be huge.

Having said that, the case is over and the court found Microsoft wilfully infringed the patent. i4i was awarded US$290 million, of which US$43 million is the penalty for knowingly infringing, which brings up another point. When Microsoft made is ISO application, it knew it didn't have the rights the i4i patented technology, so the standard could not legally be implemented without licensing from i4i. This alone should have been enough to reject the standard until i4i's complaint was heard. i4i was awarded US$290 million in damages and an injunction against Microsoft distributing Word in the US. Since Word is one of Microsoft's two cash-cows, the other being Windows, it cannot afford a dragged out fight.

Microsoft may be able to get the injunction overturned in the short term, but if that fails, then it's more than likely Microsoft will simply have to pay the US$290 million, which luckily, it can easily afford. There was some confusion about other products that may be affected by this patent, with certain pundits claiming Open Office was also infringing. i4i cleared up the issue today and confirmed that Open Office does not infringe this patent.