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IBM and the Patent Race

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We tend to think about patents as the by-product of the processes of invention: a legal document to protect the inventor from unscrupulous knockoffs. But the basis of current patent laws in this country was actually conceived by the original framers of the government. In Article 1, Section 8 of the United States Constitution, Congress was granted the authority "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries...."

Since that time, Congress has legislated statutes that include the domain of software. Companies like IBM use that law to protect and fund their research and development and to reap large profits from others who use technologies that are similar or derivative.

IBM Tops in Patenting Its Intellectual Property

On January 13, 2003, IBM announced that it had successfully generated the most U.S. patents in 2002 by applying for and receiving 3,288 patents. This was nearly double the number received by IBM's closest competitor. Over the last 10 years, it has received 22,357 patents, beating Canon by nearly 7,000 patents, while it claims that it has generated more patents than 10 of the largest IT companies combined, including Hewlett-Packard/Compaq, Intel, Sun, Microsoft, Dell, Apple, EMC, Oracle, and EDS.

Nick Donofrio, IBM's Senior Vice President for Corporate Technology and Manufacturing, says, "Our streak in patent leadership--and corresponding return to market leadership--is a testament to decisions we've made to maintain the industry's most robust investment in research and development and to create a culture that truly values and stimulates innovation."

But how do patents stimulate innovation? And what effects are patents--and particularly software patents--having on an industry that can only thrive on innovation and the free exchange of ideas? Finally, how is IBM using its dominance in patent generation to control the direction of the IT industry to its benefit?

Stimulating Innovation

IBM prides itself in being a corporation that fosters creativity and out-of-the-box thinking, particularly in the areas of manufacturing and software development, and by focusing upon patent generation as a goal, IBM can actually measure its progress.

Obtaining patents is, indeed, a worthwhile endeavor from an IBM perspective: It allows the managers and executives to measure the value of innovation by creating a bottom line of royalties that it will receive from the patents it generates. Using patents, IBM can chart a direct idea-to-dollar path as it monitors and collects royalties from the use of its intellectual property in a variety of industries. And indeed, IBM reported that it has received over $10 billion over the last 10 years from the licenses of its intellectual property.

Software vs. Hardware Patents

However, there's a significant difference in the IT industry between hardware and software technology patents, and what stimulates IBM's bottom line may, in the long run, be an obstruction to the stimulation of the IT economy as a whole.

The key task of the United States Patent and Trademark Office (USPTO) is to ensure that the device or mechanism is unique, is not obvious, and has not been previously granted a patent. However, while this standard may have been sufficient in the 19th century, it is clearly not applicable to software in the 21st.

Software--compared to hardware--is significantly more complex to validate as "original" and significantly more specialized, modularized, and granular. This is especially true as the industry continues to move into object-oriented programming (OOP) technologies, where "functions" are encapsulated and self-contained.

For this and other reasons, up until the 1980s, the USPTO treated software as a derivation of mathematics until the Supreme Court overturned one of its rulings. (At that time, companies had been protecting their software using the copyright statute and treated programming techniques as "trade secrets.")

In the 1980s, however, the door to software patents was thrown open: USPTO now hires computer science graduates--with limited exposure to commercial software--to track down and verify that the concept and the code being offered meets those same 19th-century criteria noted above.

Significant Patents on Insignificant Processes

As a result, in the past few years, IBM has been granted patents for such things as algorithms for speeding up well-known computations performed by optimizing compilers--such as register coloring or computing available expressions (Patent No. 4656583). Other well-known techniques have also garnered IBM patents, such as Patent No. 4742450, which describes the technique called "Shared Copy-On-Write Segments." This technique, used in the memory of the processor, makes a copy of a page of memory before altering the contents of that page. When the user finishes his alteration, the segments replace the original. It's a technique that was widely used before IBM applied for the patent, but it is now the intellectual property of IBM.

In 2002, IBM was granted patents for--among other things--sharing computing tasks over a network (Patent No. 6356929), automatic network reconnection (Patent No. 6412025), and a method for a computer to monitor itself and determine if its environment is causing a fault (Patent No. 6345369).

Did IBM really invent any of these techniques? The USPTO now says it did, enabling IBM to extract royalties from other vendors who use derivations of these techniques.

Raising the Threshold for Innovation

For independent developers and entrepreneurs who are trying to advance their products in the IT industry, this use of the patent system to generate or "manufacture" intellectual property creates tremendous obstacles. Obscure patents written to the lowest level of an operating system (but generalized by intellectual property rights to include the entire spectrum of a technology) can create hidden legal traps for developers. The obscure and obvious nature of some techniques that have been patented often takes a real technical legal expert to understand and guard against. Often, the patents are so general that the ramifications of a patent infringement suit can have devastating effects upon an organization.

Imagine a small company's dilemma as it attempts to bring its new software technology to the marketplace. It will spend its meager resources on developing the unique product and creating a marketing plan. It will then launch the product and--if all goes well--will begin to reap the benefits of its labor. Suddenly, just as it starts to take off, its success registers on the radar of multi-national corporations. The legal documents begin to flow, and the small company's CEO receives a slew of cease-and-desist orders, charging that the underlying technologies used within the new product are infringements upon the multi-nationals' patents.

The questions that will face the CEO are significant: A lawyer specializing in patent law will need to be retained, and the product will need to be examined by external engineers. Is there a real patent infringement? If not, how will the small company combat the challenge? If so, will the larger company license its patent? If the multinational corporation is seeking merely royalties, it will arrange a royalty payment scheme. Usually, this is the case, and IBM (as well as others) counts on those royalties as a source of steady income.

Controlling the Market with Patents

But perhaps the larger company has its own plans for controlling the technology within the market place, using its legal patent leverage to influence which technologies will succeed and which will be kept from use. It could refuse to license its technology or charge hefty royalties for its use. Or it could use this leverage to demand that its own technology be implemented, regardless of its efficiency or usefulness to the product.

This is precisely the legal technique that Sun Microsystems is currently using with its Java Virtual Machine (JVM) property: It not only has claimed that Microsoft stole its intellectual property, but also has asked the court to force Microsoft to ship the Sun JVM technology with every license to Microsoft's operating system. And, to date, the courts have agreed.

Tooth and Nail: Legal Battles Obstruct Innovation

When two superpowers like Microsoft and Sun Microsystems go tooth and nail in the courts, it's an interesting spectator sport for journalists and consumers. But, for every legal battle on the Microsoft/Sun level, there are hundreds of smaller legal battles being waged that keep new products from entering the market or succeeding in their market niche.

The Future of IT Technology Litigation

It is this trend in litigation--created by claims on obscure and important software patents--that is obstructing the delivery of innovation in the IT industry. Such litigation raises the cost of developing new products and discourages the entrepreneurial spirit.

Worse, it shuts off new capital formation needed to fund innovative IT products because investors are reluctant to fork over money toward new companies that are not adequately protected from the legal wrangling of larger organizations.

Consider the following:

  • Would the Internet browser have been so successful had its underlying technologies been subjected to the patent scrutinizes that are currently in place today?
  • Would Linux have made its mark had IBM chosen not to back its technology as a hedge against Microsoft dominance?
  • If the technologies that compose the mechanisms of the Internet were divvied up into their intellectual property segments, which companies could most significantly impact the direction of its future development?

IBM's Dominance in the Future of IT Innovation

Certainly IBM's leadership role in the area of intellectual property is not trivial. Thus, when IBM Senior Vice President Donofrio states--as he did on January 13, 2003--"(T)he most important measure of success is the competitive advantage we provide our customers through the advanced technologies and solutions we derive from these inventions..." he is not speaking about the past success of IBM's products. No! Instead he is talking about a future when IBM--or companies like IBM--will be capable of directing the use and introduction of technology into the marketplace. And the primary tool in IBM's arsenal will be the intellectual property mechanisms such as software patents.

If this has not been a warning to the IT industry as a whole, it should be considered now.

Editor's Note: For more information about software patents and what you as a developer or consumer might be able to do, visit the Web site of The League for Programming Freedom. For more information about IBM's announcement on February 13, 2003, visit "IBM tops U.S. Patent list for tenth consecutive year."

Thomas M. Stockwell is the Editor in Chief of MC Press, LLC. He has written extensively about program development, project management, IT management, and IT consulting and has been a frequent contributor to many midrange periodicals. He has authored numerous white papers for iSeries solutions providers. His most recent consulting assignments have been as a Senior Industry Analyst working with IBM on the iSeries, on the mid-market, and specifically on WebSphere brand positioning. He welcomes your comments about this or other articles and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Thomas Stockwell

Thomas M. Stockwell is an independent IT analyst and writer. He is the former Editor in Chief of MC Press Online and Midrange Computing magazine and has over 20 years of experience as a programmer, systems engineer, IT director, industry analyst, author, speaker, consultant, and editor.  

 

Tom works from his home in the Napa Valley in California. He can be reached at ITincendiary.com.

 

 

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    During this session Carol Woodbury will discuss the issues that the world is currently seeing such as increased malware attacks and then provide practical actions you can take to both monitor and protect your IBM i during this challenging time.

     

  • How to Transfer IBM i Data to Microsoft Excel

    SB_HelpSystems_WC_Generic3 easy ways to get IBM i data into Excel every time
    There’s an easy, more reliable way to import your IBM i data to Excel? It’s called Sequel. During this webinar, our data access experts demonstrate how you can simplify the process of getting data from multiple sources—including Db2 for i—into Excel. Watch to learn how to:

    • Download your IBM i data to Excel in a single step
    • Deliver data to business users in Excel via email or a scheduled job
    • Access IBM i data directly using the Excel add-in in Sequel

    Make 2020 the year you finally see your data clearly, quickly, and securely. Start by giving business users the ability to access crucial business data from IBM i the way they want it—in Microsoft Excel.

     

     

  • HA Alternatives: MIMIX Is Not Your Only Option on IBM i

    SB_HelpSystems_WC_GenericIn this recorded webinar, our experts introduce you to the new HA transition technology available with our Robot HA software. You’ll learn how to:

    • Transition your rules from MIMIX (if you’re happy with them)
    • Simplify your day-to-day activities around high availability
    • Gain back time in your work week
    • Make your CEO happy about reducing IT costs

    Don’t stick with a legacy high availability solution that makes you uncomfortable when transitioning to something better can be simple, safe, and cost-effective.

     

     

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  • Backup and Recovery on IBM i: Your Strategy for the Unexpected

    SB HelpSystems SC 5413Robot automates the routine tasks of iSeries backup and recovery, saving you time and money and making the process safer and more reliable. Automate your backups with the Robot Backup and Recovery Solution. Key features include:
    - Simplified backup procedures
    - Easy data encryption
    - Save media management
    - Guided restoration
    - Seamless product integration
    Make sure your data survives when catastrophe hits. Try the Robot Backup and Recovery Solution FREE for 30 days.

  • Manage IBM i Messages by Exception with Robot

    SB HelpSystems SC 5413Managing messages on your IBM i can be more than a full-time job if you have to do it manually. How can you be sure you won’t miss important system events?
    Automate your message center with the Robot Message Management Solution. Key features include:
    - Automated message management
    - Tailored notifications and automatic escalation
    - System-wide control of your IBM i partitions
    - Two-way system notifications from your mobile device
    - Seamless product integration
    Try the Robot Message Management Solution FREE for 30 days.

  • Easiest Way to Save Money? Stop Printing IBM i Reports

    SB HelpSystems SC 5413Robot automates report bursting, distribution, bundling, and archiving, and offers secure, selective online report viewing.
    Manage your reports with the Robot Report Management Solution. Key features include:

    - Automated report distribution
    - View online without delay
    - Browser interface to make notes
    - Custom retention capabilities
    - Seamless product integration
    Rerun another report? Never again. Try the Robot Report Management Solution FREE for 30 days.

  • Hassle-Free IBM i Operations around the Clock

    SB HelpSystems SC 5413For over 30 years, Robot has been a leader in systems management for IBM i.
    Manage your job schedule with the Robot Job Scheduling Solution. Key features include:
    - Automated batch, interactive, and cross-platform scheduling
    - Event-driven dependency processing
    - Centralized monitoring and reporting
    - Audit log and ready-to-use reports
    - Seamless product integration
    Scale your software, not your staff. Try the Robot Job Scheduling Solution FREE for 30 days.

  • ACO MONITOR Manages your IBM i 24/7 and Notifies You When Your IBM i Needs Assistance!

    SB DDL Systems 5429More than a paging system - ACO MONITOR is a complete systems management solution for your Power Systems running IBM i. ACO MONITOR manages your Power System 24/7, uses advanced technology (like two-way messaging) to notify on-duty support personnel, and responds to complex problems before they reach critical status.

    ACO MONITOR is proven technology and is capable of processing thousands of mission-critical events daily. The software is pre-configured, easy to install, scalable, and greatly improves data center efficiency.