Wednesday, September 27, 2006

Shining a light

Yesterday's announcement by IBM that it is establishing a new patent policy to promote innovation is further evidence — were such evidence needed — of how broken the patent system has become.

The four tenets of the new policy are that patent applicants should be responsible for the quality and clarity of their patent applications; that patent applications should be available for public examination; that patent ownership should be transparent and easily discernible; and that pure business methods without technical merit should not be patentable.

While IBM indicated ways in which it will be introducing the new policy within the company itself, it also hopes that by publishing the policy it will provide a model that other companies will follow.

Commenting on the announcement Dr John Kelly III, IBM senior vice president for Technology and Intellectual Property, said: "IBM is holding itself to a higher standard than any law requires because it's urgent that patent quality is improved, to both stimulate innovation and provide greater clarity for the protection and enforcement of intellectual property rights."

In other words, the patent system is now so cracked that even large multinational companies like IBM are starting to conclude that the problems it introduces may end up outweighing the benefits it provides.

As The New York Times pointed out, "Rapid advances in technology and the rise of industries like software, biotechnology and nanotechnology have resulted in a steep increase in patent applications in recent years. With limited resources, the United States Patent and Trademark Office has been overwhelmed."

And it is the same story in all the major patent offices.

The paper added, "The avalanche of patents — many making broad and vague claims — has produced an environment of uncertainty, rich in opportunity for litigation and patent speculators."

On the face of it, the most noteworthy aspect of IBM's new policy would seem to be that it has committed itself to opening up its patent applications to community review. Since this would provide competitors with intelligence about its R&D activities there would be be some risk attached to doing so. In reality, however, it appears that the company is only committing to open up some of its patent applications for review.

It is also noteworthy that IBM is proposing that only business methods that have obvious "technical merit" should be patented. Where such inventions do not have this, it suggests, companies would be better to place details of them into the public domain — a practice widely known as "defensive publishing". As the IBM press release puts it, "Applicants should seek to publish, not patent, their pure business method innovations if they wish to prevent others from patenting similar business methods."

The company also announced that it will make available to the public over 100 of its business method patents, and that its technical experts "will spend thousands of hours annually reviewing published patent applications submitted to patent offices."

The announcement is not the first time that IBM has taken a lead in introducing greater openness to the development of technology. In June 1998, for instance, the company took the revolutionary decision to sell and support the Open Source web server Apache as part of its WebSphere suite — a move widely viewed as having given the Open Source Movement a significant boost at a critical moment.

And last year the company gave a pledge [PDF] not to assert 500 of its patents against Open Source software developers.

However, it would be wrong to assume that IBM has any intention of abandoning its traditional proprietary approach to business. The company remains the largest US patent holder and, according to The New York Times, was granted 2,974 patents in the US last year alone. Moreover, as the paper pointed out, IBM also remains committed to the patenting of software, a practice universally condemned by Open Source software developers, and widely held to pose a serious threat to future innovation in software.

All IBM wants is for more light to be shone on the arcane and secret world of patenting, in the hope that greater transparency will make the system more effective, and lead to a significant reduction in the number of unwarranted patents that are issued.

Moreover, the way in which the story was initially presented to the world leaves one suspicious that there is a fair amount of spin in the announcement.

But if IBM does succeed in its aims it should at least be able to reduce its legal bills, and indeed the legal bills of many companies. As IBM's chief executive Samuel Palmisano commented in The New York Times, "The larger picture here is that intellectual property is the crucial capital in a global knowledge economy. If you need a dozen lawyers involved every time you want to do something, it's going to be a huge barrier. We need to make sure that intellectual property is not used as a barrier to growth in the future."

Critics will no doubt point out that what IBM is proposing was in any case always a given of the patent system, but has in recent years simply been lost sight of. They will also argue that, even if IBM's proposals are widely adopted, patents will continue to be a barrier to growth, and future innovation — at least until much greater changes are introduced than the company is calling for.

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