Microsoft Hoarding Patents Like They're Going Out Of Fashion

from the 200-here,-200-there...-soon-you're-talking-about-real-innovation dept

Thu, Jun 26th 2008 9:56am — Mike Masnick

A few years back, Microsoft decided to shift its strategy on software patents. The contrast in what Microsoft was saying publicly about patents was stark:

Brad Smith, Microsoft general counsel, 2007: "Protection for software patents and other intellectual property is essential to maintaining the incentives that encourage and underwrite technological breakthroughs. In every industry, patents provide the legal foundation for innovation. The ensuing legal disputes may be messy, but protection is no less necessary, even so."

Bill Gates, Microsoft CEO, 1991: "If people had understood how patents would be granted when most of today's ideas were invented and had taken out patents, the industry would be at a complete standstill today... A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose."

If you needed any proof that Microsoft has shifted from a "young company innovates" to an "old company litigates" stance, just take a look at the massive ramp up in patents awarded to Microsoft over the last decade and a half. It's been steady growth, with a massive leap in the past two years.

Every week, if you follow patents granted to Microsoft you see huge numbers. In the past four weeks alone, Microsoft has been granted 49 patents (June 24), 44 patents (June 17), 42 patents (June 10) and 76 patents (June 3). That's 211 patents this month alone. Compare that to a company like Google, who was granted a grand total of 7 patents in June.

The patent system was designed to award incentives in the rarest of circumstances -- when the free market alone wouldn't provide the incentives necessary to bring a technology forward. When a single company is getting over 200 patents a month, the system isn't functioning as intended. It's not an incentive to innovation. It's a tax on innovation.

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Filed Under: hoarding, patents
Companies: microsoft

32 Comments

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Pro, 26 Jun 2008 @ 10:09am

Corrupt system?
Mike, I think you've interpreted Microsoft's actions incorrectly. The environment is set by the rules and laws that we the people create to govern us. Microsoft has simply reacted to a corrupt environment in order to protect it's interests.

You've correctly identified many times that the patent system is completely corrupt and broken (Aren't we just creating busy work and income for lawyers and lawmakers?). As a business entity, you can either choose to fight for what is right (fix the system, which is impossible), or go with the flow and protect your interests.

We need to identify the problems with our laws and systems and correct them - not so much the businesses that react to the changes and make lots of money through smart decisions.
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- Jake, 26 Jun 2008 @ 5:56pm
  
  Re: Corrupt system?
  You're right up to a point, but there is something that Microsoft can be doing if they want things to change. They can lead by example. They can file patents in a responsible manner, including in the wording only that which is genuinely innovative and non-obvious, and voluntarily renouncing any patent that has no further commercial value; releasing the DOS 6.22 source code into the public domain, for example, wouldn't cost them a penny. The problem isn't so much the letter of the law, as far as I can see, but the wilful neglect of the spirit; when you get right down to it, the point of a patent is to force people to come up with their own new ideas instead of taking someone else's work and passing it off as their own, but the idea was never to let someone have one mildly clever idea and milk it for the rest of their natural life either.
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  - Anonymous Coward, 26 Jun 2008 @ 6:37pm
    
    Re: Re: Corrupt system?
    "...for the rest of their natural life..."
    
    Patents in the US have a 20 year term that is measured from the date an application is first filed. After a patent issues it is subject to maintenance fees, which if not paid causes the patent to lapse. Under US patent law, maintenance fees are due 3.5, 7.5, and 11.5 years after a patent is issued, with the amount of the fees ascending for each period. For example, a large entity (e.g., Microsoft) would have to pay at current rates a first fee of about $1K, a second of about $2K, and a third of about $4K. The rates are cut in half for patent holders qualifying for what is known as "small entity" status.
    
    In practice maintenance fees serve as a strong disincentive for keeping a patent in full force if the patent holder is not realizing any benefit from it. As a consequence, it is customary for patent portfolios to be continuously reviewed to ascertain which, if any, should remain in force.
    
    In 2006 Microsoft received about 1500 patents. Thus, during 2009 its legal department budget would have to pony up about $1.5M if it wanted all of them to stay in force. In 2013 that number jumps to $3M, and in 2017 to $6M. Mind you, the fee amounts change periodically to even larger numbers. Microsoft may be a large company, but even its Legal Department operates under tight budget constraints.
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Hulser, 26 Jun 2008 @ 10:18am

Defense?
I wonder how much of a company's strategy to hoard patents can be viewed as a defense against other companies hoarding patents? I'm sure patent hoarding goes back decades, if not centuries, but I don't think that anyone would argue that it hasn't become worse in the last few years. If this is so, then companies may view getting a patent as insurance from being sued by someone else.

There are two obvious problems with this is...

1) Even if a company originally got a patent as insurance, that doesn't mean that some jackass won't come along later and try to use it as a revenue generation tool.

2) If a company sees the patent system as something that needs to be gamed in order to survive, wouldn't it be motivated to fix the problem? In other words, if Microsoft were really having to spend all of this time to get patents just for defensive purposes, wouldn't they be a lot more vocal about how the patent system was broken and be trying to fix it?
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Chris Perton, 26 Jun 2008 @ 10:23am

Not any more baby!
Well, Ballmer is one of those guys who loves to sell and occasionally shows love by throwing chairs! Invisible Hamburgers (Patents) are a new challenge for him to sell, but He's up for the challenge!

What? Don't believe me? Check out the Windows 1.0 ad!
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Microsoft_suckers, 26 Jun 2008 @ 10:43am

User name generation techniques
My name is infringing on Patent Application 20080133512

Lovely and innovative discovery, Microsoft.
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- Jason, 26 Jun 2008 @ 4:56pm
  
  Re: User name generation techniques
  One small step for man, one giant leap for....no, not for anyone.
  
  Mr. User-name-generation-techniques, I think you should send that one into Pres. Bush for the ALL-NEW non-obviousness test. If DUBBYA could've taken an INTRO to programming class and created it, then it might not be patentable.
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- Little Techdirt Lemming Punk, 26 Jun 2008 @ 6:40pm
  
  Re: User name generation techniques
  That is a real hoot !
  
  Abstract -> "User name generation techniques are described. In an implementation, one or more words are received to be used as a user name to access a resource. One or more characters of at least one of the words are modified such that the word having the one or more modified characters is available as a user name."
  
  I have a "Hello World" script that I would like to patent. Shall I give it a go ?
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Steve R. (profile), 26 Jun 2008 @ 10:50am

Its a Matter of Perspective
The patent system may be corrupt. A reasonable reaction to that may be patent hoarding. But ....

We have two issues. First, as Mike has pointed out we have a shift in Microsoft's world view. Corruption of our patent system is irrelevant. Microsoft is simply now a company that is not interested in innovation but a company that now views its products as "cash cows". Litigation is necessary to keep the toll-booths in existence so they can exact revenue.

Second, OK - corruption is an issue. Then why don't we hear about Microsoft lobbying Congress to get the patent system fixed? If Disney can get favorable legislation passed by Congress to protect its business model; Microsoft could also go to Congress to reform the patent system. The fact that they apparently don't implies that Microsoft really is NOT interested in fixing the patent system. Ergo, they want the revenue stream that the toll-booths provide.

I wonder if we can apply to the Bill Gates Foundation for grant monies to fix the world-wide abuse of intellectual property so that we can feed the children?
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Anonymous Coward, 26 Jun 2008 @ 10:54am

I follow patent litigation quite closely. As yet I have not seen any propensity on the part of Microsoft to assert its patent portfolio against anyone, leading me to believe that it is likely being acquired for defensive purposes in the event it is sued at some future date.
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- Mike (profile), 26 Jun 2008 @ 11:34am
  
  Re:
  I follow patent litigation quite closely. As yet I have not seen any propensity on the part of Microsoft to assert its patent portfolio against anyone, leading me to believe that it is likely being acquired for defensive purposes in the event it is sued at some future date.
  
  Yeah, but it hasn't stopped Microsoft from threatening others and stifling their ability to innovate via chilling effects and FUD:
  
  http://www.techdirt.com/articles/20071009/135529.shtml
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  - Anonymous Coward, 26 Jun 2008 @ 11:37am
    
    Re: Re:
    Nice way to use one of your own blogs as evidence. Let me guess next you are going to send us to a wikipedia page. Because everything on the internet is true.
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    - Mike (profile), 26 Jun 2008 @ 11:57am
      
      Re: Re: Re:
      Nice way to use one of your own blogs as evidence. Let me guess next you are going to send us to a wikipedia page. Because everything on the internet is true.
      
      I link back to my own stories because I know that the URLs will stay and will work.
      
      Now, are you disputing what was said in that piece? Or do you not have a leg to stand on?
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  - Anonymous Coward, 26 Jun 2008 @ 2:55pm
    
    Re: Re:
    "Chest beating" is one things...launching a lawsuit quite another. MS has as yet to pursue the latter, and I rather doubt it will except in the most exceptional of circumstances. It is far too busy trying to create "product" than to launch a frontal attack on every Tom, Dick, and Sally who might be using something covered by a MS patent.
    
    Merely FYI, in major corporations the decision to pursue patent litigation is not one that is lightly made. Quite the contrary. It is invariably a last resort.
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    - Jason, 26 Jun 2008 @ 7:58pm
      
      Re: Re: Re:
      Microsoft doesn't sue because if they did, they'd have to put their source on the record. Fact is, they don't even know how much of their code is even originally theirs.
      
      Maybe a handful of the individual managers over each of the hundreds of coding projects within the company has the slightest clue how much their programmers have 'stolen' here and there. If that's even really an accurate term.
      
      You see, the system favors a quiet patent holder. The decision to lay low and FUD up is a no brainer. Why open your most valuable assets up to scrutiny that would ultimately place their ownership in the hands of others?
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      - PaulT (profile), 27 Jun 2008 @ 1:20am
        
        Re: Re: Re: Re:
        It's the same as SCO. Several years ago, SCO sued IBM, claiming that they had found "millions of lines of infringing code" in Linux in violation of their copyrights, and that only IBM could have supplied those lines.
        
        Years in court later, it turns out that not only do those lines of code not exist, but SCO don't even own the copyrights they claimed were violated.
        
        It's the same with Microsoft - they launch FUD against an increasingly major competitor to make major potential customers think twice. I'd be willing to bet that most of those patents would either not be applicable or could be overturned with evidence of prior art if they were required to reveal what they are.
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mrshl, 26 Jun 2008 @ 11:06am

I'm with anonymous. I've not seen much of an effort on Microsoft's part to aggressively litigate its patent holdings. It seems like they're using patents as a shield rather than a sword, and with an eye towards cross-licensing agreements with peers.
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James Young, 26 Jun 2008 @ 11:38am

Demand for Immediate Take-Down: Notice of Infringing Activity
This letter serves as notification under the Digital Millennium Copyright Act, 17 U.S.C. § 512, or equivalent notice provisions of your local law, that content currently residing within your computer system infringes on the copyrights of Microsoft Corporation. Moreover, the source code contains proprietary trade secret information belonging to Microsoft. Microsoft Corporation One Microsoft Way Redmond, WA 98052 Comment: If you haven't as yet got one of these notices, with Microsoft's 6,500 plus patents, you will soon to told, your are NOT allowed to use, share, distribute or benefit with the innovation, that is until you afford Microsoft more money on their terms, if even allowed. How is that best for society? How is that even a good idea for your developing business, to be locked out? And if you decided to challenge any patent today here in the U.S. courts, it cost millions of dollars, which means all small businesses, even those start ups cannot afford. What do you think that means, the rich get richer, the poor are forced to remain poor, unable to be included into an open fair and honest system which obviously IPR is favoring only the super rich and wealthy to build upon innovation and all works of art for their own benefit rather than that of society.
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Anonymous Coward, 26 Jun 2008 @ 11:48am

LOL

"Nice way to use one of your own blogs as evidence. Let me guess next you are going to send us to a wikipedia page. Because everything on the internet is true."

Mike should have said, "Well, my brother's roommate said..."
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- Jason, 26 Jun 2008 @ 8:10pm
  
  Re:
  Would you prefer, "This one anonymous coward said..."?
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Wendy, 26 Jun 2008 @ 11:50am

US Economy Declines because of IPR
Copyright has increasingly become an instrument for securing huge investments. But for a democratic society, that thrives on a large diversity of freely expressed and discussed cultural expressions, it's succumbs to stagnation and regression, all because of some bureaucratic encumbrance of intellectual property rights.
How can DRM identify "fair use" of copyrighted material?
How is the First Amendment affected by the Digital Millennium Copyright Act?
Copyrights are selfish; they place the good of the one (the creator) over the good of the many (the audience). Instead of allowing a work to be improved and redistributed by those who may be more qualified than the original author, works are restricted in the name of monetary profit.
The technical term for this is "rent-seeking," meaning special-interest coalitions who pressure the government to transfer wealth to them. The Sonny Bono Copyright Term Extension Act, the Digital Millennium Copyright Act, the Family Entertainment and Copyright Act, the No Electronic Theft Act, etc...
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Ima Fish, 26 Jun 2008 @ 12:05pm

If I remember correctly, Microsoft hired the patent attorney who helped build up IBM's massive patent war chest, for the sole purpose of building up its own patent war chest. This was a minor story several years ago. I'm not entirely sure why it's a news now.
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Pro, 26 Jun 2008 @ 12:33pm

The rules
When you have screwed up rules you must absolutely expect people to abuse them to the fullest extent.

What you have to ask yourself, is why do we have this screwed up system? Who benefits?
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Anonymous Coward, 26 Jun 2008 @ 3:05pm

BALLSACK WARS
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Anonymous Coward, 26 Jun 2008 @ 6:09pm

Micro Soft
What two words describe both Bill Gate's company and manhood?
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Angry Anonymous, 26 Jun 2008 @ 8:54pm

Wonder
A while ago Angry Dude had claimed that A. He would not support patent hording done by Microsoft, despite his support of patent hoarding in all other situations, and B. That we would support patent hording done by Microsoft.

Wonder what the asshole thinks of this?
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- angry dude, 27 Jun 2008 @ 12:09pm
  
  Re: Wonder
  hey dick-in-your-ass dude
  
  wtf is your problem with good valid patents ?
  
  you'll never have one for yourself so just shut up
  
  my problem is that MShit intentially dilutes the value of a few really worthy tech patents by filing thousands of junk patents on incremental features each year
  Those patents have no value
  They will never be litigated in court because they are shit
  BTW, I talked to many MShit Research fellas - they all agree (in private conversations) that their patents are shit, but still keep filing them cause management told them to file and they get like thousand bucks for each shitty app filed. heck, file a dozen of shitty patents and you can collect enough money for a shitty car, not bad at all
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  - Pro, 27 Jun 2008 @ 7:13pm
    
    Re: Re: Wonder
    Let me try to explain to you all one more time what I believe to understand...
    
    I recently bought a blu ray player and got lent a series called "Planet Earth". It's truly amazing, and when you watch it you figure out that the creatures that inhabit this planet are mostly products of their environment. More precisely, over millions of years of evolution, creatures adapt themselves to best survive given the environment that they happen to be subjected to. Some creatures actually adapt to the point that minor changes lead to the end of the species. This is natural selection and nature at work. If you understand that much, then what I'll lead to next might make sense.
    
    Im my youth, at some point I came to understand the above. I further gained a sense of understanding that the United States was truly the best country in the world because our system - that of free enterprise - most closely imitated that of nature, and over time it would always create the best, brightest, and most athletic of people. I believe this to be the original intent of the founding fathers.
    
    If you realize that, you have to understand that the environment - creates the creatures. The environment in the US is suppposed to create the toughest and smartest people - and it did, until recently.
    
    Recently the rules have been subtly changed by smart people that make a lot of money. Over time, small changes can lead to big money for the right people. I submit to you that the fundamentals and ideals of this country have been perverted to the point that the original intents no longer have effect. The reality is, that people are getting rich by stealing from the future. While Joe and Mary American are worried about Republican versus Democrat, we're having our livelyhood ripped out by both.
    
    The patent system is only a small example of the real problem. Argueing whether or not MS is right or wrong for their patent practices is downright foolish. It's the environment that defines the behavior of the successful.
    
    If we want to get back to the United States that I was proud of as a child, we need to come to an understanding and get rid of all the bullshit.
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    - angry dude, 27 Jun 2008 @ 9:14pm
      
      Re: Re: Re: Wonder
      I wholeheartedly agree with your, dude
      
      This country is indeed buried in shit nowadays
      
      This is not a representative democracy anymore
      Multinational corporations headed by a few very rich and very immoral folks rule this country at present buying their laws from corrupted politicians
      
      The original intent of the Patent System as wrtitten in the original US Constitution by the Founding Fathers was to encourage inventors to share their discoveries by rewarding them with limited-time exclusive rights
      But today patent system became just another instrument of corporate domination
      And both political parties more and more resemble big stinking piles of shit
      Unfortunately the US political system makes it impossible for an independent candidate to take presidential office and clean the shitty mess
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stv, 30 Jun 2008 @ 5:49am

rarest of circumstances
there are patents and there are patents. MS can get a thousand patents a month and it wont make any difference because neither they nor anyone else use those technologies.

Your remark about the patent system being for the “rarest of circumstances” is nonsensical. Your simply don’t understand what you are talking about. Now pay attention. In any instance when a party invents something if it is successful in the marketplace there will be copyists. If a large company swoops in to take over the nascent market and elbows out the originator without recourse via patents, the inventor will simply no longer innovate. That is the reason for the patent system. Get it?
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Anonymous Coward, 8 Jul 2008 @ 4:44am

i hate u all :P
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Anonymous Coward, 8 Jul 2008 @ 4:44am

i hate u all :P
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