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  (Source: New Line Cinema)
Patent reform is crucial or electronics industry will be consumed in self-destructive chaos

It's simple math.  And it illustrates how broken the international patent registration and court system is when it comes to intellectual property.

I. The System is Broken

Microsoft Corp. (MSFT) recently revealed that tentative Google Inc. (GOOG) acquisition Motorola Mobility wanted $22.50 per device for a series of video codec patents.  This request was clearly ridiculous -- as Microsoft states, the typical licensing rate for a collection of standards patents under fair, reasonable, and non-discriminatory (FRAND) terms is around $0.02 USD per device.

FRAND is actually a model system in that it is inherently an exemplar in the world of intellectual property.  It represents fair compensation to innovators, yet opens key developments to the masses, allowing them to push the envelope.

The issue is that FRAND is on the verge of dying.

FRAND patents are for friends
[Original Image: Cayusa/Flickr; modifications: Jason Mick/DailyTech]

The would-be murderer is patent litigation.  Keep that $0.02 USD patent licensing figure in mind.  Now imagine you patent a trivial user interface gesture, which is essentially some sort of variant on drag and drop.  Suddenly you can ban a competitor's device which retails for $200.00 USD.

That's right -- based on recent court decisions, almost trivial non-FRAND patents [1][2][3] are being rewarded with rulings worth 10,000x or more the cost of traditional licensing fees.

This abysmal state of affairs not only encourages patent trolling, it offers a strong financial incentive to stop any FRAND related work.  If your competitors go non-FRAND and your company works cooperatively under FRAND guidelines, your firm will almost certainly be dealt a series of crippling court rulings under the current patent atmosphere.  Try explaining that to investors.

II. Some Suggestions for Improving the System

User interface patents, firmware patents, and their ilk certainly represent a philosophy of protecting software innovators.  That's a noble goal.  However, in the future, it would be good for the patent system to consider a couple of points:

1. The potential for alternatives

Apple recently patented sending an interrupt to a processor in order to underclock it.  Now, interrupts have been used for decades as the fundamental firmware mechanism to deal with immediate events.  And a processor's power circuitry must receive some sort of guidance in order to underclock a chip.

Thus, while Apple's patent may be novel (assuming a lack of prior art), there are few feasible alternatives.  The patent system should note this kind of situation and put a higher pressure to reach a fair licensing situation in this kind of case.  You can't patent the laws of physics, so to speak, and even if you could, the least the system can do is to force you to license it.

2. The importance of a patent

Thus far Apple has secured short bans on Android products for relatively trivial features -- swipe to unlock, fast scrolling algorithms, and a "bounce" animation when performing drags or pinches.

In terms of the iPhone's net worth these represent maybe 1/500th or less of the total software innovation in the device.  Thus it might be fair to charge collectively $1.00 USD per device for them, but seeking a ban or exorbitant fees from competitors who use similar effects/inputs is extremely punitive and unfair.

3. Eliminating repetition

The mobile industry is awash in a deluge of repatents -- companies taking personal computer innovations, putting a mobile spin on them and then filing for a patent.  Apple's swipe to unlock is essential a touch screen version of the time immemorial drag-and-drop.

Motorola unlock
Motorola's forbidden swipe to unlock gesture [Image Source: YouTube]

If such repeats are allowed, the patents should at least be flagged.  Again such a flag could be used as a basis to force a licensing settlement and/or reduce the maximum damages a company can seek to collect in a suit.

4. Force Companies to Reach Licensing Settlements

Barring a handful of patents where the IP describes essentially an entire product, there should be strict guidelines forcing companies to settle software IP disputes.

A reasonable place to start would be to charge x10 the going FRAND rate (e.g. $0.20 USD for licensing a portfolio of IP).  In FRAND terms, this would not be fair and reasonable.  But the approach would bring into line the risk-vs-reward equation of the FRAND-vs-non-FRAND filings, versus the current hyper-inflated value scenario which essentially tilts the value scale in the direction of non-FRAND so far that the balance bar breaks.

III. Don't Want to Fix the System?  Prepare for a Dying Industry

As the industry stands right now, FRAND is on the verge of collapse.  Google and its partners are fast learning that playing fair does not work.  Their FRAND suits illustrate a willingness to play dirty.  And that new perspective will likely soon manifest in a cessation of FRAND work.

This is a horrible state of affairs for the industry.  By allowing injunctions that exceed FRAND payouts 10,000-fold, the global intellectual property sphere is revelling in the creation of an anti-competitive, anti-technology environment.

This system promises an ugly future in which mobile communications are slow (as it would be uneconomical to participate in FRAND communications standard development), there interfaces will be clunky (a company will be limited to a handful of UI elements for fear of infringement), and product quality will be decreased to offset an inevitable slew of licensing fees.

Cavemen fire
Prepare for the future of technology if the patent system is not reworked.
[Image Source: Museum of Natural History]

This is a system where nobody wins.  And this is the system that will result if drastic action is not taken, right now.

Is Google/Motorola/Samsung playing dirty?  Yes.
Is Microsoft milking the licensing system [1][2]? Yes.
Is Apple acting as an anticompetitive litigation abuser? Yes.

In a macroscopic sense, the problem is not these companies.  The problem is the intellectual property system.  This argument must not be lost amid our personal prejudices, lest the increasingly hyperlitigious atmosphere destroy the innovative devices we enjoy today, regardless of who makes them.

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RE: Pointing out the bias
By alexwgreen on 2/29/2012 9:56:23 AM , Rating: -1

I completely understand why your comments get rated down given the general anti-Apple sentiments here. And it is my opinion that people are entitled to their opinion. But the suspense of logic and rationale in favour of blind allegiance is growing particularly tiresome. I admire your persistence in pointing out the obvious one-sided nature of Mr Mick's ramblings, but you must see that in present company, you are fighting a losing battle. Unless of course you enjoy the challenge.

Without stating my feeling for or against Apple, as I really don't think it is relevant here, your post Testerguy makes perfect sense to me. I read the headline and had to stop for a second. Then without even reading, I knew what was coming.

At least this one wasn't posted as "News" :)

RE: Pointing out the bias
By Cheesew1z69 on 2/29/12, Rating: 0
RE: Pointing out the bias
By alexwgreen on 2/29/2012 11:14:10 AM , Rating: 2
Actually, I am a unique poster, by the name of Alex Green. Clue is in my account name. Though in the absence of any way of proving this, I will have to accept that you will never be satisfied.

I wasn't intending to praise Testerguy so to speak. But I DO agree with his logic IN THIS INSTANCE.

RE: Pointing out the bias
By Cheesew1z69 on 2/29/2012 11:28:17 AM , Rating: 2
Clue is in my account name
That proves nothing . It's quite amusing you are using exactly the same style wording, typing, terminology as he does. But you want us to believe you are not him and your very first post, sounds exactly as he would type it, is praising him.

Quite funny to say the least...

RE: Pointing out the bias
By alexwgreen on 2/29/2012 11:37:22 AM , Rating: 2
So how would you like to go about my proving my independence.

In fact, scratch that. There's clearly only room for one rational poster here, and that position is occupied. I'm out!

RE: Pointing out the bias
By hexxthalion on 2/29/2012 11:50:16 AM , Rating: 1
there's no point to feel offended or angry about comments here. it's anti-apple through and through and it's apparently filled with not very bright people who either lack knowledge or common sense, in some scenarios both.

RE: Pointing out the bias
By Cheesew1z69 on 2/29/2012 12:09:10 PM , Rating: 2
very bright people who either lack knowledge or common sense, in some scenarios both.
They are called iTards...

RE: Pointing out the bias
By muhahaaha on 2/29/2012 1:41:23 PM , Rating: 2
and you, sir, only post Apple propaganda, as shown on your posting history. Not one informative, funny, or useful post ever, just iSheep nonsense.

RE: Pointing out the bias
By hexxthalion on 3/1/2012 5:39:43 AM , Rating: 1
that's a bit of a stretch. I own several devices and work with various platforms - I own both iOS and Android based devices. I do hate fanboys from both camps but I'm not definitely a fanboy of either. so you're talking shit

RE: Pointing out the bias
By muhahaaha on 2/29/2012 1:37:19 PM , Rating: 2
That's easy. Brand new account with 4 posts today only.

alexwgreen alexwgreen has posted a total of 4 comments at DailyTech, the average comment rating was 1.25. Below, is a listing of alexwgreen's latest comments.

Date Selection

Comment Date Rating
RE: Pointing out the bias Feb 29, 2012 11:37 AM 2
RE: Pointing out the bias Feb 29, 2012 11:30 AM 2
RE: Pointing out the bias Feb 29, 2012 11:14 AM 2
RE: Pointing out the bias Feb 29, 2012 9:56 AM -1

RE: Pointing out the bias
By alexwgreen on 2/29/2012 2:07:42 PM , Rating: 2
Where does it say that my account is brand new?

Just because I didn't post till today, doesn't mean I haven't had the account active for over a year. To be honest, I wish I hadn't bothered. I made it quite clear in my post that my personal opinion of Apple is not relevant to my recognising when someone has, with justification and in a reasoned manner, pointed out the obvious lack of independent thinking in the above article.

RE: Pointing out the bias
By Cheesew1z69 on 2/29/2012 3:00:49 PM , Rating: 2
my personal opinion of Apple is not relevant
Dead give away right here.

RE: Pointing out the bias
By Schrag4 on 2/29/2012 5:11:48 PM , Rating: 2
In fact, scratch that. There's clearly only room for one rational poster here, and that position is occupied. I'm out!

LOL - and that one poster is....testerguy and alexwgreen, right?

RE: Pointing out the bias
By alexwgreen on 2/29/2012 11:30:33 AM , Rating: 2

"Uses the same terminology too"

what do you mean by this? Good English?

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer

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