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Antitrust Law – Essay

Software has become an integral part of our society. The economic success of our country depends on the success of the software industry. “Open source” software, software which users are allowed to modify and redistribute, is a very important part of the software industry Copyright and patent laws are inappropriate for computer software, their imposition slows down software development and reduces competition. Computer software has become more and more important.

Software has played an important part in the world. Computers have most likely played an important role in all our lives, from making math easier with calculators, to having money on the go with ATM machines. But software is completely defenseless, as it is more or less simply intellectual property, and not a physical thing, thus very easily copied. “There are two kinds of intellectual property. The first one is composed of writing, music, and films, which are covered by copyright.

Inventions and innovations are covered by patent. Unfortunately, it is not that easy when dealing with such a complex matter as computer software. When something is typed on a computer, it is considered writing, as it is all written words and numbers. However, when executed by the computer, it functions like an invention, performing a specific task as instructed by the user. Thus, software falls into both categories”[1] (By Del Guercio 22-24). It is generally covered today by copyright laws.

More advanced software or programming techniques, however, can be patented, as they are neither obvious nor old. Copyrights last the lifetime of the author, plus 50 years, and can be renewed. Patents last only 17 years, but cannot be renewed. With technology advancing so quickly, it is not necessary to maintain the protection of the software for the length of the copyright, but also, it is sometimes necessary to renew them. “For a 10th sequel in a video game series or version 47. 1 of Bob’s Graphic Program.

With copyrighted material, one is able to write software similar to someone else’s, so long as the programming code is their own, and not borrowed from the others”[2](By Del Guercio 22-24) This keeps the industry competitive, and thus results in better software. Supporters of software patents claim that the involvement of the patent system is needed to provide incentive to innovate new software technology. They believe that the developers of new software technology have a right to a monopoly on the technology as it falls under the category of “intellectual property. ”

Many companies that support software patents have large investments in existing patent portfolios. This includes companies such as IBM, Unisys and Microsoft. They have market power from their patents which supporters of software patents feel they are entitled to have. According to supporters, software patents encourage competition by giving anyone who creates a new software technology power over that technology. Kenneth Nichols points out that patent law protects a wider range of “intellectual-property” than copyrights and trade secrets, the traditional methods of software protection. `The patent system has the advantages of being already in place and using a model that is adequate to cover a sizable portion of the software currently on the market” (Nichols 105)[3] But with the ability to patent new and non-obvious software functions comes serious problems. The latest new technology, be it ray-tracing 3D engines, anti-aliasing software, or a new internet exploring fad can be patented. This would mean that only one company and its software could use it. Any other companies that wanted to use the software would have to pay them a large sum of money for the rights.

Also, since patent hearings are conducted over a period of 3 years, and in secrecy, “company A might create a software package and then apply for a patent, and company B may create better software during that period, and might become quite successful, and then bam, the patent is given to the company A, who promptly sues the pants off company B. This stagnates the computer industry; it used to be that company A would retaliate by making better software”[4] (By Del Guercio 22-24). Let’s say mouse support. Now, it cannot happen to mouse support as it is today, but in the future, something undoubtedly will replace the mouse as he preferred method of input, for instance, in what may be a virtual reality future think the glove may be the input device. Anyway, say it did happen to mouse support. Every single program that uses mouse support would have to pay a fee for the rights to do so. This would result in higher software prices, and reduced quality in the programs, as they have to worry about the legalities more. Needless to say, the patenting of software is not a widely encouraged policy, mostly loved by large corporations like Lotus and Microsoft. Smaller companies and most often consumers are generally against it.

Even with all the legal problems I’ve mentioned that arise with current laws, that is not all. The complexity of software protection laws brings up a large degree of confusion. And the patent last 17 years, is too long for the software industry. I believe that the time-period is too complicated for an industry that changes every five years. And the main use of software patents is to block out competition. It claims that the government’s policy to allow cross-licensing benefits companies that have large patent portfolios at the expense of their smaller competitors.

There are some supporters of the “free software” movement, who believe that source code should be free as in free speech, consider software patents to be completely counter to the movement. Free software supporters believe that software patents provide too much control to the patent owners. These particular supporters believe that “intellectual property” should be shared and that software patents prevent ideas from being shared and thus inhibit the growth of software technology. All parties with an opinion on software patents purport to have the interest of the end-users of software in mind. `Patents… create intellectual property rights that can be bought, sold, rented and licensed like other property rights”[5] (By Heckel 128). This is supposed to increase the dissemination of ideas through the marketplace and thus benefit users of software who should get better products. However, founder of the Free Software Foundation, Richard Stallman points out “navigating the maze of patents will be harder than writing software”[6] (By Richard Stallman) if software patents continue to spread. This would only reduce the amount of software that would be available.

Because it increases the entry barrier and then lower the competition. Reducing the amount of available software may seem to be a good idea to some. But experience in the software industry shows that products that lack competition tend to stagnate. Like Microsoft did little to MS-DOS until competing products such as PC-DOS and DR-DOS became available. The capabilities of Internet browsers were fueled largely due to competition between Microsoft and Netscape. Of course, quality should be emphasized over quantity when it comes to the output of any industry including the software industry.

Paul Heckel suggested that “if software patents were more widely respected we would probably have fewer variations on a theme, and more themes to vary on”[7] (By Paul Heckel). He cited the 250 different spreadsheet programs available in 1992 as an example of the overuse of a product idea. However, in Intellectual Property Issues in Software it was noted that. “Software innovator Bricklin, the creator of the original spreadsheet program, VisiCalc, believes that software patents could be very bad for the industry.

It had patents been available when he and his collaborator developed VisiCalc, Bricklin speculated, their company, Software Arts, would have sought the protection. The consequences of such a decision, he further speculated, would have been to prevent other innovators from exploring different expressions of the spreadsheet idea and to handicap the competition. “[8] (By National Research Council ) Open source software adds even more competition to the software industry and thus increases the need for innovation. Open source programs have demonstrated a level of reliability under rapidly changing conditions.

At the very least, this raises the level of quality needed for successful proprietary software. Because competitive lead to improvement. According to the Open Source Initiative, the organization which controls the `Open Source trademark, open source software may not restrict any party from selling or giving away the software. However, the GNU General Public License (GPL) preamble notes that software patents create the “danger that redistributors of a free program will individually obtain patent licenses, in effect making the program proprietary”[9] (GNU GPL).

What is worse is that third parties can also obtain patents and thus have control over software that they did not even write. This has shown to be true with in the case of the Lempel-Ziv-Welch (LZW) compression algorithm whose author obtained a patent for the technique in 1985. However, the algorithm became part of several standards, partially due to ignorance that the algorithm, which had been published in the June 1984 issue of IEEE Computer, was patented. One of those standards was the CompuServe GIF file format.

This file format allows lossless image compression; meaning that it makes image files smaller without losing any data. Today the GIF image format is the most popular lossless image compression format despite attempts to displace it with other standards. Even though Unisys, the current patent holder, had no part in creating this file format, it now asserts intellectual-property rights and demands royalty payments for programs that create GIFs. Unisys’s policy is to allow non-commercial software free license to the LZW algorithm. However, open source software is not necessarily non-commercial software.

This means that any one that asserts the right to sell an open source product that creates GIFs has to pay a royalty to Unisys. A distributor may not even be able to distribute the product if Unisys were to deny the distributor the right to use the LZW technology. Supporters of software patents would contend that Unisys has these rights as the owner of the LZW algorithm. However, Unisys is able to assert the right to royalties for software that was not written by any Unisys employees. Traditionally “it was the means for carrying out an idea that was patentable not the idea itself” [10](By Mylott 48).

But any software that implements the LZW algorithm probably does it in a different way; thus software patents such as this cover an idea too. The original reasoning behind the patentability of software was that a computer running some software was in fact a different machine. Software changes the information stored in a computer’s memory; changes what the computer knows how to do. “Viewing software as a physical, electrical process operating in a physical matrix of digital circuitry opens the way for it to be considered patentable subject matter” [11](By Lautsh 59).

The logic behind this view is very convoluted and indicates how much the patent system has had to stretch to even allow software patents. Even a novice computer programmer, and many non-programmers, would know that simply implementing software on a different type of computer can dramatically change the actual instructions that tell the computer how to work. However, software patents are usually broad enough to cover the implementation on any platform. In the case of the LZW compression algorithm it is true that software patents have encouraged innovation.

When it became apparent that the LZW patent was going to make it difficult to distribute graphics software, developers at Hutchison Avenue Software Corporation contributed code that created compatible GIF data without using the LZW algorithm to the library, a software library for generating GIFs. However, they had to use an inferior method along with an algorithm to make the data look like it was generated using the LZW algorithm. This process makes it possible for viewers such as web browsers to read the images; but it makes the images much larger than they should be.

Users now have images that take up more space than they have to, wasting disk space and network bandwidth, hardly beneficial to anyone. Software patents currently can only do more harm than good to the software industry. Their only real benefit is that they can give small companies legal leverage in a competitive marketplace. But this benefit is even greater for the large companies that generate thousands of patents a year. Even worse, this benefit does not readily extend itself to independent developers who are often involved in open source development projects.

Despite the myopic fear that proprietary software developers have of open source software development, this area in the software industry is a major resource. Action should be taken to protect this resource and encourage its growth. By requiring software patents be licensed “openly,” the software industry would benefit due to increased software quality and larger markets for software. Bibliography “The Business Case for Open Source. ” Apr. 1999. The Open Source Initiative. 26 Apr. 1999 http://www. opensource. org/for-suits. html. GNU General Public License. 16 Feb. 1998. Free Software Foundation. 3 Apr. 1999 http://www. gnu. org/copyleft/gpl. html. Heckel, Paul. “Debunking the Software Patent Myths. ” Communications of the ACM 35. 6 (1992): 121-140 Del Guercio, Gino. Softwars. World Monitor Oct. 1991: 22-24. Reprinted in Technology 3. Boca Raton, Florida: SIRS, Inc. , 1996: Article 75. Nichols, Kenneth. Inventing Software: The Rise of “Computer-Related” Patents. Westport: Quorum, 1998. Mylott, Tom. Computer Law for Computer Professionals. Englewood Cliffs: Prentice-Hall, 1984 National Research Council. Intellectual Property Issues in Software. Washington, D. C. : National Academy, 1991.

Lautsh, John C. American Standard Handbook of Software Business Law. Reston: Reston, 1985. “The Open Source Definition. ” Apr. 1999. The Open Source Initiative. 26 Apr. 1999 http://www. opensource. org/osd. html. Stallman, Richard. “Patent Reform is not Enough. ” 20 Mar. 1999. Free Software Foundation. 26Apr. 1999 http://www. fsf. org/philosophy/patent-reform-is-not-enough. html. ———————– [1] Del Guercio, Gino. Softwars. World Monitor Oct. 1991: 22-24. Reprinted in Technology 3. Boca Raton, Florida: SIRS, Inc. , 1996: Article 75. [2] Del Guercio, Gino. Softwars.

World Monitor Oct. 1991: 22-24. Reprinted in Technology 3. Boca Raton, Florida: SIRS, Inc. , 1996: Article 75. [3] Nichols, Kenneth. Inventing Software: The Rise of “Computer-Related” Patents. Westport: Quorum, 1998. [4] Del Guercio, Gino. Softwars. World Monitor Oct. 1991: 22-24. Reprinted in Technology 3. Boca Raton, Florida: SIRS, Inc. , 1996: Article 75. [5]Heckel, Paul. “Debunking the Software Patent Myths. ” Communications of the ACM 35. 6 (1992): 121-140 [6] Stallman, Richard. “Patent Reform is not Enough. ” 20 Mar. 1999. Free Software Foundation. 26Apr. 1999 http://www. fsf. rg/philosophy/patent-reform-is-not-enough. html. [7] Heckel, Paul. “Debunking the Software Patent Myths. ” Communications of the ACM 35. 6 (1992): 121-140 [8] National Research Council. Intellectual Property Issues in Software. Washington, D. C. : National Academy, 1991. [9] GNU General Public License. 16 Feb. 1998. Free Software Foundation. 13 Apr. 1999 http://www. gnu. org/copyleft/gpl. html. [10] Mylott, Tom. Computer Law for Computer Professionals. Englewood Cliffs: Prentice-Hall, 1984. [11] Lautsh, John C. American Standard Handbook of Software Business Law. Reston: Reston, 1985.