In the game-theoretic world, the gunner never shoots: the other side looks at the options down the game tree, realizes that one action will lead to his or her getting shot, and doesn’t take that action. In Game Theory textbooks, cases never go to court: both sides calculate the risk-adjusted expected payoff from trial, and if it is positive for one hyperrational side, then it is negative for the other hyperrational side, and a settlement can be calculated based on that. In both cases, knowledge that an event could occur largely has the same effect as the event itself. Continue reading
The kung fu master teaches the student to use the smallest possible movement that achieves the desired result. Flailing around looks dramatic but is a waste of energy. The kung fu master rarely speaks, but each statement follows the same principle, using as few words as possible.
There are multiple ways to apply the teachings of the master to legislation. To give a concrete example, the SHIELD Act (Saving High-Tech Innovators from Egregious Legal Disputes Act of 2013) is an attempt to make as small a change as possible to existing law.
Here’s the problem it hopes to surgically eliminate: a company with no engineers and a lot of lawyers obtains a patent (typically for software), finds somebody who (typically by simple coincidence) uses the method described in the patent, then sends a letter demanding a licensing fee. A full trial can cost millions just to defend against, and until the suit is resolved it must be disclosed as a risk and potential liability for the company, so a licensing fee of $10,000 to $100,000 to make the pain go away is worth it for most companies. Few people think this sort of behavior promotes the progress of science and useful arts.
This blog summary of research by Colleen Chien is a good round-up of numbers showing that this isn’t a trivial problem. Depending on how you define patent-assertion entities (PAEs, or patent trolls for short), they are 62% of U.S. patent litigation, and growing.
How can we change the law to solve this problem? One read of the kung fu principle is that the change should be carefully designed to affect trolls and only trolls: we like individual inventors who really came up with something original but who don’t have the capital to put out a full implementation, and want them to keep on patenting things.
More on the problem, from the above-linked blog roundup by Professor Chien:
Though the PAE share may surprise some, patented technologies like software are the building blocks of modern commerce. “Low-tech” industries like funeral homes, advertising agencies, and retailers like JC Penny […] are all taking steps to protect themselves from troll demands. Though historically a “tech” problem, in 2012 PAEs sued more non-tech companies than tech companies […].
Those of us who were paying attention weren’t at all surprised: Math You Can’t Use, a book I wrote in 2006, has a full chapter on how allowing the patenting of software, which courts in the mid-00s were increasingly willing to do, will create liability on all companies, not just those in the narrowly-defined software industry. I bring up my own writing not to say I told you so (because, frankly, it’s not a good feeling), but to point out that there’s a larger problem. What is patentable has grown far beyond expectations, to the point that every company with a web site has patent liability. How will a carefully-circumscribed law about trolls change this? IBM doesn’t fit the definition of PAE the SHIELD Act is written around, but it has patents on web-related elements and will still has the ability to send licensing demands to funeral homes and retailers if it so desires. Practicing the typical web-based software patent requires only an appropriately-configured web site, so can a PAE set up its own web site for a few hundred bucks and then claim to be a practicing entity? [Conversely, if you’re going to argue that setting up a web site is not a “substantial” investment, then how can any holder of a web-related patent ever claim to have made “substantial investment” and thus avoid the additional barriers put up by the SHIELD Act?]
When applied to modifying law, the principle of least action and the principle of fewest words actually contradict: the smallest change to law requires voluminous verbiage to pick out only those parties and activities that are disfavored, while a brief, simply worded change would have far-reaching implications.
A law clarifying that software and information processing without serious real-world effect is not patentable would be a short paragraph, but would have real effects on the sort of companies that have a lobbying presence in DC; the SHIELD Act is multiple pages of little details about how to define a non-practicing entity and what those entities are required to do when entering into litigation. Nobody is happy with how practicing entities are defined in the law, and you’ll find more than enough people (myself included) who think no definition exists that commits neither Type I nor Type II errors. Further, nobody said patent trolls are all idiots, and the smaller the range of prohibited action, the greater latitude they have to circumvent the law by inventing strategies that are still trolling but just outside the definitions. Perhaps we might see subsequent legislation two years from now that modifies the law just a little bit more to chase the trolls out of their new methods. Such kung fu surgery is why the tax code is an incoherent mess.
The Electronic Frontier Foundation is famously pro-software patent, but knows that patents are a thorn in the side of its constituents, who are very likely to oppose softpatents. They are thus always on the lookout for ways to propose small changes to patent law that still allow softpatents to flourish, such as being on record opposing software patents that fail non-subject-matter requirements like being obvious or badly specified. The SHIELD Act is thus exactly up their alley, and they support the SHIELD Act.
Summary paragraph: we like laws of few words and few loopholes, but the incentives consistently push for the production of verbose laws of minimal effect. The SHIELD Act is a fine example of such a law, and it has low odds of achieving even its stated effect.
The cliffhanger from last time was about the difference in worldview between the specialist courts/judges who hear only patent cases and the generalist courts/judges. We can trace the root of the conflict back to the Constitution, which allows for patents in a manner different from other governmental powers.
The Constitution grants Congress the power “To promote the Progress of Science and useful Arts”.
Hi, my name is Ben Klemens, and I’m honored to say that I’ve been invited to write a bit here on Bureauphile. My background is mostly in Game Theory, Statistics, computational modeling, and other sundry methodological pursuits. But I have read far too much on patent law, so my first few posts will likely be on that subject.
Obvious patents almost seem to be the norm these days, because of all of the Bureauphile’s favorite problems, including regulatory capture and a budget-maximizing bureaucracy.
The parade of idiotic patents has been a common trope since Amazon’s one-click patent in the `00s. The slide-to-unlock feature on the iPhone, Google’s patent on doodles, or Friendster’s patent on circles of friends. I mean, if I stated to you this problem—
I have a smartphone with a screen and only one button. I need a way to keep it from turning on in users’ pockets.
—how long would it take before it occurs to you to require a gesture on the screen to unlock the telephone? As for making it work, here’s an implementation in about 450 lines of code—get it before the author gets sued. Continue reading