PESC 2007: Open Source, Learning, and Patents
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PESC 2007: Open Source, Learning, and Patents






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    PESC 2007: Open Source, Learning, and Patents PESC 2007: Open Source, Learning, and Patents Presentation Transcript

    • Open Source, Learning, and Patents Michael Feldstein April 23, 2007
    • Author’s Note: Adapting to the audience, the sequence of slides presented was changed during presentation. This presentation is in the sequence given. A recording of the presentation is available and can be reached at ___ (Audio MP3 01:00:00 xxmb).
    • About me
    • Who I am not
      • A lawyer
      • An intellectual property expert
      • Knowledgeable about patents outside of the U.S.
      • A journalist
      • A spokesperson for my employer
    • Who I am
      • An interested party
        • A lifelong educator
        • Involved in educational software for 11 years
      • A partisan
        • One of the early reporters of the Blackboard patent and lawsuit
        • Started the Wikipedia page on prior art
        • Translated the Blackboard patent claims into plain English
    • Some wake-up calls
      • Blackboard v Desire2Learn
      • Firestar Software v RedHat
      • Jacobsen v Katzer
      • Washington Research Foundation v. Matsushita et al
      • Alcatel-Lucent v Microsoft
    • Basics about patents
    • Patent vs Copyright
      • A patent is a temporary monopoly on an idea (or “invention”)
      • A copyright is a temporary monopoly on the expression of an idea
    • Reasons for patents
      • To provide incentive for innovation in the fields of “science and the useful arts”
      • To provide incentive for sharing of that innovation, to the public good
    • The issues
    • Pros and cons Source: (2 March 2007, 14:43) Benefits Costs Innovation
      • Creates an incentive for research and new process/product development
      • Encourages disclosure of inventions
      • Impedes combination of new ideas and inventions
      • Provides an opportunity for rent-seeking
      • Facilitates the entry of new (small) firms with a limited asset base or difficulties in obtaining finance
      • Creates short-term monopolies, which may become long-term in network industries, where standards are important
      Transaction Costs
      • Creates a neatly packaged negotiable IP right
      • Creates patent risk uncertainty and/or search costs
      • Creates economic friction
      • Raises transaction costs for follow-on development
    • The software patent challenge
      • Tricky: Algorithms are not patentable, but devices that use them are
      • Controversial: Inventions are often additive
      Source: (30 April, 2006, 00:32)
    • EduPatents as special cases
    • The economics of Bb v D2L
      • Estimated litigation costs to Desire2Learn: $1.5 million - $3 million
      • Additional cost for inter partes challenge at USPTO
      • Desire2Learn’s estimated annual revenues: $10 million
      • Desire2Learn’s estimated annual profits: 5%, or $500,000
      • Conclusion: The patent litigation will cost Desire2Learn 100% of their profits for 3-6 years or longer .
    • And what if they lose?
      • They pay all litigation costs
      • Plus USPTO challenge costs
      • Plus the royalty
      • Plus treble damages for willful infringement (some calculate ~$800K/new customer from suit to settlement)
      • Plus Blackboard’s legal fees
    • The positions
    • Views about software patents
      • Good (and good for you)
      • Generally good, but patent quality is a problem
      • Bad, but we’ve learned to live with them
      • Evil, bad, and yucky
    • Views about EduPatents
      • They protect innovation
      • Good, but particularly vulnerable to patent quality problems
      • Open Source should be protected
      • Open Source and its support vendors should be protected
      • Do more harm than good
    • Hierarchy of EduPatent Needs This section drawn in part from Jim Farmer, “eLearning Patents: An Institutional Perspective,” SUNY Wizard conference, November 8, 2006
    • Safety for users
      • License from a firm that has a patent indemnity clause
      • Use Open Source software that has obtained an opinion of non-infringement or licensing agreements
      • Encourage patent holders to provide guarantees not to sue
    • Safety for Open Source contributors
      • Contribute to a legal entity; retain a non-exclusive right to use and distribute
      • Execute a contribution agreement
      • Maintain records (including copies of contributions)
      • Publish your records
      • Maintain hard copies if possible
    • Safety for software projects (especially Open Source)
      • Provide opinion of non-infringement or design around patents that are being asserted
      • Publish documentation of design processes, and contributions
      • Reveal all sources of code
      • Work with patent holders and community to establish ground rules and “treaties”
      • When necessary, license patents
    • Safety for innovators
      • Engage with the community regarding quality of patent applications
      • Think carefully about trade-offs around patent assertion
      • Consider non-assertion promises or royalty-free licenses for relevant communities
      • Consider defensive patents or publication as alternative strategies
    • The future
    • What to expect
      • More assertion of software patents
      • More liquidity in the patent market
      • Some patent reform, particularly around patent quality
      • The rise of patent indemnification and insurance as a line of business
    • Developments to watch
      • Blackboard v Desire2Learn
      • The Blackboard patent pledge and similar efforts
      • KSR v Teleflex
      • Microsoft v AT&T
      • Patent reform legislation in House and Senate
      • USPTO patent application peer review pilot
    • Questions?
      • Michael Feldstein
      • [email_address]
      • For EduPatent Alerts: