Tag: IPR

Trolling on the human rights

If I were a patent troll, which universal human right would I start abusing next?

Patents and humanitarian activity (and how patents can kill humanitarian activity) have been covered on this blog before (see the SMOS project). I am in a slightly cynical mood, so I will now pretend to be a strategist for a patent troll (a “non-practicing entity”). How could I best abuse the world?

Note: I am NOT talking about the way big companies (like, say, Monsanto) are perhaps strong-arming the patent system. Compared to me, Monsanto are the good guys. They at least have at some point put some money into some R&D, and produce something. All I plan to do is to exploit quirks in the patent system.

I would want my target industries to have three key criteria:

  1. They have little or no experience with IPR, and none with trolls. The best attack is when the target has no idea what hit him.
  2. They produce things which every person needs to have. Ideally, things that are considered human rights. That way, the targets have no real option except to accede to my demands (or else break IP law).
  3. (Optional): Some type of vendor lock-in. This means that the customer is tied to one specific vendor for all his needs. Many people realize that the vendor can then abuse the customer at will. Most people do not realize that a troll can then abuse both the vendor and the customer at will.

An nice target list is provided by the UN’s Universal Declaration of Human Rights, especially Articles 25-26.  There are many potential attacks, but here I will focus only on a few novel ideas.

Article 25.

  1. Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
  2. Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

Food / clean water

This is where I would strike, first and foremost, no hesitation.  Water-purification technologies are the choicest target because they fulfill all key criteria (they are essential, people don’t expect attacks, and there are lock-ins). Some target markets (for example oil-rich desert countries) are rich enough to provide considerable blackmail money.

Methods to create potable drinking water would be my number one focus. It is a high-tech activity, with serious companies doing serious R&D work. An overly broad patent (either created now, or bought from a suitable player, or an fire sale after a bankruptcy) could be a major block.

I would target companies close to a breakthrough, and file/buy a huge number patents around the same area. Here’s a secret: It doesn’t really matter whether or not the patents are truly valid. All one needs to do is to strike at a strategic moment, and announce that one has a hundred patents which company X is infringing. This is a typical troll strategy.

The strategic moment: the instant a major water-cleaning plant has started providing water to a large city (Dubai, Nairobi, Mumbai, Dhaka). Even a brief court injunction on the operation of a key water plant could be problematic to a whole city. The blackmail potential is very high.

(Normally, one would expect a reasonable government to act like India in the medicine case discussed below, and simply ignore the blackmail and the the injunction. However, consider an extremely poor and corrupt country with the leading elite fully tied to foreign interests… it might not do the sane thing).

Water distribution would be even more fruitful, since it is in practice impossible to set up a competing water and sewage network overnight. There is a definite vendor lock-in in that business. However, the technology is so simple that there is little IPR to abuse.

Medical care

Medical care would be a lucrative area for attack, but… filing spurious patents is difficult in this area. The major drug manufacturers are well protected by patent thickets.  There is also an active backlash against medical patents, which means that criterion 1 is no longer satisfied. Everyone is expecting attacks. For example, India is banning branded drugs. Governments and NGOS’s are already on their toes, unlike the water case. I would pass on this.

Communications

I would put communications in this category as well. I am not the only one; the ITU (the telecommunications branch of the United Nations) is waking up to the patent wars in the telecoms industry, and their effect on innovation (see for example here). This war was also addressed in our SMOS project.

The ITU initiative is largely an attack on patent trolls. A cynic might expect that since the big companies have deep pockets to affect the process, and governments have their own telecom industries to protect, the end result will be an even deeper monopoly on development by a few megacompanies, with no benefit for poor countries. Time will show.

In any case, while trolling the telecoms industry is currently all the rage, the competition is getting harsh, there is little chance for a surprise attack, and a serious backlash is likely. I would look elsewhere.

Motherhood and childhood

Childhood diarrhea is one of the worst killers in the world, and could largely be avoided by providing clean water and saline solution. A patent on a particular type of saline solution could provide interesting leverage to an utterly sociopathic troll. However, in practice it is relatively easy for medical professionals to work around the IPR by substituting slightly different components. Thus, while intriguing, the work-arounds make trolling difficult.

Article 26.

  1.  Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.
  2. Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace.
  3.  Parents have a prior right to choose the kind of education that shall be given to their children.

(Distance) education

Low-cost distance learning technologies are interesting, especially as they provide a very low-cost alternative in extremely poor countries. The best course of attack would be cases where a given company has achieved an effective lock-in on the overall technology and has created a walled garden.

A walled garden means that one company controls all aspects of the material: the hardware, the software, and the content. Apple is the best-known example of this strategy,  followed perhaps by Microsoft and Google (whose lock-in does not extend fully to hardware though). The walled garden can create many type of problems for customers; for example, there have been cases where critically-needed applications have been pre-emptively deleted from the AppStore if Apple has feared litigation.

These companies have pockets deep enough to fight the trolls, but those same pockets can also bribe the trolls. I would frame the attack behind the scenes, making the problems appear to be the fault of the company, as in the AppStore case above. Since their brand names are absolutely crucial to them, they would be more  likely to pay off (though of course they also have armies of lawyers. The balance is difficult).

A public-service note: attacks like this could be avoided by using open-source solutions, or at least by minimizing vendor lock-in. A sure way to create problems of this type is to accept a walled garden, however attractive it might look in the short run.

Am I serious? Yes and no.

No. If I actually wanted to do this, I wouldn’t write about it. Profit is made by keeping absolutely silent and working in the shadows.

Yes. The basic principles are valid. The exact sample cases I’ve suggested might or might not work. I have outlined some techniques for avoiding attacks of this type (most importantly avoiding walled gardens), but where there is money, there will be trolls.

Rest assured: there are people out there thinking precisely along these lines. Globally, masses of people are now being downsized who have the competence for this, families to feed, and negotiable moral values.  (To be consistently cynical: I am among them. I could  be good at this. We all like to think we’re on the side of the angels, but we’re not).

If someone has good ideas on how to protect the world against them (us?), I would appreciate hearing those ideas.

UN

 

SMOS: The Kiss of Death of IPR – another view

Since the publication of SMOS last week, we have had several discussions with different people about patents – whether patents are essential and does it really matter for a small company to have patents or not. The answer is, of course, yes and no. But even with yes, it is not always as clear as one might expect as Jakke presented in his previous blog.

What is today’s IPR about? It is about litigation, and litigation itself is a game of power and strategy. But even those rules are changing.

I believe that Jakke was a bit optimistic when he was looking at patents from their utility aspects. In practice they are much more.

I may be harsh with my statement, but to some degree patents are like weapons. They are everywhere and can be used both for good and evil. But when one is manufactured, you never know whether it will harm someone someday. For gun exports and trade, and ultimately war, we have regulations. But for using and transferring patents, and eventually litigations, not so much. I am not a lawyer, but for a small company or a single entrepreneur the unwritten rules of the game are quite literal.

Let’s take an example that company LetterZ finds out that company SillyNumber is infringing one of its patents. What will LetterZ do? Most probably it does its homework to know their own position and carefully document everything that works for them. And most probably it plans counter measures if SillyNumber has something against them. If SillyNumber is a small company, LetterZ can wait for it to grow. It is not good business to pay lawyers to sue companies that do not have money. Basically it is a time bomb that only company LetterZ knows exists.

Just like in warfare, the company can plan its strategy carefully over time before striking. With SMOS we would have had no idea who we might have been eventually facing. It would be polite to let the one infringing know and give a chance to change their approach, if possible. But as said, this is more about power and influence than being right. It is warfare.

Traditionally biggest headlines have been written about clashing titans. One party will either pay a lot and/or case ends in cross-licensing. During the last 10+ years there has been other, new type of development. Some companies acquire licenses after careful studies that someone (lucrative enough) is infringing exactly those patens. For the most successful suing companies it is enough to threaten the infringing party to keep the case out of courts. Some of such companies, patent trolls, don’t actually produce anything else than money.

Recent tactics has been to move away from the frontline clash of titans towards guerilla wars. Instead of suing the provider, suing e.g. individual hotels and restaurants for 5000 USD each, there is decent money to be made out of hundreds or thousands of cases. The sum has to be small enough that it definitely will not cover litigation and lawyer fees. Many companies may end up paying without putting up a fight, regardless of the actual case details. The threat and uncertainty are much bigger.

As courts may decide the compensation based on the number of devices made or sold that include infringing technology, corporations are separating their manufacturing and patents. Patents are turned into the hands of portfolio companies, who “do not have anything” to do with the originating company. There is only a licensing agreement, but no other relationship what comes to potential damage based on production numbers. Patents are truly becoming intercontinental missiles of the cold war era.

In August 2011 US Patent Office granted its 8 millionth patent. Two days ago, May 1st 2012, patent number 8 170 000 was granted. That is in the USA alone since the 18th century. There the growth of granted patents has been exponential since the early 1900s. It is a fact that nobody can tell what exactly has been patented and what other prior art exists around all those ideas. In principle all inventions are equal, big and small. We as people have just built and ended up with this kind of a system we face today. It probably is better than anarchy, but can it survive? Is it ultimately so that elephants have the right of way in traffic what ever the highway code says?

There are some efforts to change the status quo, for example https://www.eff.org/patent-busting, but there is much more to patents than corporations and litigation. It still is a possibility for the tiny to have their rights protected. Just as humans as a species have decided. To our knowledge ants do not have proprietary rights for certain lifting techniques, but people may have.

For an individual company patents may be crucial when seeking investments or selling the business. But should the system be reviewed and changed accordingly and be more than a weapon of distraction/destruction?

Do we need a common database of free ideas that are exempt from official patents that may be used for humanitarian purposes and collectively against patent trolls? Yes, I know I am reinventing patenting process just as labor exchanging communities are reinventing money.

But if data wants to be free, could some inventions be agreed to be free as well? It is for our own benefit after all.

SMOS: The Kiss of Death of IPR

For once I will be blunt: I now feel that with crisis communications hardware, the first whiff of IPR (patent) issues will cause the effort to crash and burn.  My opinion on this was certainly different before we started the SMOS project (see SMOS web page).

The idea of combining humanitarian technology and intellectual property sounds uncomfortable. After all, humanitarian activities are supposed to be humanitarian. Nevertheless, there were perfectly valid reasons to consider IPR issues with SMOS.
1. Protect the idea in order to make at least a minimal living from it.
2. Prevent others from destroying or profiting extortionately from the idea.
3. Improving interoperability with telecommunications providers by playing with the same rules (rather than adopting a “hacker mentality”).

I am a deep skeptic about IPR, but do not consider it fundamentally “evil” — it may have its place.  However, I am coming  to the conclusion that for the specific case of crisis communications, IPR is the kiss of death.

The numbers

Since we pursued the possibility of patenting quite heavily, I learned some ballpark figures.

  • To file and get a Finnish patent: 6000-8000 EUR. Most of this goes to the patent agency handling the application. There is no practical way to survive without a patent agency.
  • In Finland, a decision is usually rendered within a year. There may be interim decisions which require using a patent attorney, pushing up the price.
  • After being granted, the annual cost of maintaining a patent is small for the first three years, but starts rising rapidly after that.
  • To file and get a European patent, the cost is approximately twice of a Finnish patent. Maintenance costs are also roughly double.
  • A US patent requires using a patent attorney in the US. Overall cost is comparable to a European patent. In the US, a decision can take 5-10 years.
  • I have no idea what the costs would be in countries such as China or India.
  • A figure of 20,000 USD (or EUR) per patent is often used a lifetime cost, at least within a single country. However, for a catastrophe communications system, protection would be needed in multiple countries, some without an advanced IPR culture.
  • → If I had to give a single number, it would be 50,000 EUR per patent.

Realize, however, that a single patent has no practical value. To protect an idea in any significant sense, a dozen or more patents may be needed. If the IPR route is chosen, a cost of half a million just to file patents is realistic.

Note also that filing patents does not in itself guarantee anything. Anyone can infringe on a patent, and it is up to the patent owner to sue. Even minor court cases can eat up six-digit sums of money, and can be decided on the basis of a comma in the wrong place, even if the most expensive lawyers are used. Going the litigation route means risking millions on what is in effect a roll of the dice.

Even worse, in this particular case litigation is a no-win situation. If the other side is a local company in a developing country, it can (and most likely will, and perhaps should) take the role of a victim being bullied by large Western IPR interests and inhibited from trying to save lives. There is no real way to protect one’s public integrity in such a case.

We had one major rationale for the IPR route: we felt that by making hardware along commercial lines, it would be easier to arrange interoperability with operators. I am now highly skeptical about this. Interoperability would simply cause operators to view SMOS as a potential competition. It would take a major player 15 minutes to dig up enough patents from its patent thicket to make our life impossible. Whether those patents are relevant is completely irrelevant. The threat is enough.

The implications

I draw a harsh conclusion: any whiff of IPR will cause a humanitarian crisis communications project to crash and burn.

On the other hand, proceeding without a thought for IPR is troublesome for funding, since venture capitalists want to recoup their investments within a few years. Without IPR, there is less to recoup.

In the traditional way of thinking, having no IPR protection would be unthinkable because of the competitive issues. However, I believe I have demonstrated above that IPR does not actually give any benefit in this specific technology case.

What to do about this then? I am certainly not saying that crisis communications hardware projects are hopeless. However, it would be wise to pursue such projects with the (perhaps unwritten) attitude that IPR is the enemy.

An open-source approach seems appealing, and has been done successfully with software (for example Sahana). But hardware?  It is only possible to go so far with a “hacker mentality”; if there is a desire to use cellular telecom interfaces, then there is a need to cooperate with commercial providers as a commercial entity.

One of the few ways to actively defend a project of this type against patent trolls is to have a strategy of defensive publishing. In other words, publish all ideas as soon as someone blurts them out, ideally in the form of a permanent Creative Commons-licensed blog. This means that the blog becomes prior art, and the ideas can no longer be patented by anyone.

Other than that? Perhaps the best advice I can give is to look at the material on the SMOS project page, study what we tried to do in SMOS, and then try to not do that.

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