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Why Software Patents Exist: Legal Fees







Why Software Patents Exist: Legal Fees

Why Software Patents Exist: Legal Fees 08/02/2004 04:42 AM

John has submitted this somewhat disturbing, if not at all surprising, "anonymous insider's account" of a software company that is ramping up their patent efforts, after another company beat them in a lawsuit over patents, and the company began to realize just how valuable patents were in that sense -- if not actually for the purpose of innovation. The clear point is that patents do little to help innovation, often do quite a bit to harm innovation, but do keep the lawyers quite happy. Software engineers are told to come up with just about anything that might possibly be patentable, and the engineer in question does so -- coming up with nearly 20 patents in a matter of days. The engineer admits that all would be pretty obvious to any "competent worker in our field," but all were gleefully accepted by the lawyers. The engineer points out that these patents alone likely created over a $1 million worth of legal expenses -- money that is not being spent on actual research and development any more. Despite the fact that the "any competent worker" point should make these patents completely invalid the lawyers actively point out that the patent examiners aren't smart enough to know any better: "Look, if the examiners were any good they'd be in industry, so you don't have too much to worry about." Meanwhile, the engineer notes that all of the innovation in the industry seems to be coming from areas where there are no patents. It is just an anecdotal story, but, it's one that seems to be getting repeated an awful lot in the software industry. If the entire point of the patent system is to promote innovation, and time and time against the opposite has been shown to be true, why isn't anyone reforming the patent system (and, even worse, why are other countries making their patent systems more like ours)?




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Why Software Patents Exist: Legal Fees

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Software patents are bad for coders like
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Cory Doctorow: Richard Stallman, creator of the Free Software movement, has written a tremendous essay for the Guardian on the risks of software patents. Richard undertakes a gedankenexperiment about "literary patents" and the impact they would have had on Victor Hugo as he sat down to pen Les Miserables.
Now consider this hypothetical literary patent: Claim 1: a communication process that represents, in the mind of a reader, the concept of a character who has been in jail for a long time and subsequently changes his name...

These patents would all cover the story of one character in a novel. They overlap, but they do not precisely duplicate each other, so they could all be valid simultaneously - all the patent holders could have sued Victor Hugo. Any one of them could have prohibited publication of Les Misérables.

You might think these ideas are so simple that no patent office would have issued them. We programmers are often amazed by the simplicity of the ideas that real software patents cover - for instance, the European Patent Office has issued a patent on the progress bar, and one on accepting payment via credit cards. These would be laughable if they were not so dangerous.

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. The three most famous European authors of open-source software have issued an appeal against software patents on NoSoftwarePatents.com. Linus Torvalds (Linux), Michael Widenius (MySQL) and Rasmus Lerdorf (PHP) urge the EU Council, which will convene later in the week, not to adopt a draft directive on software patents that they consider "deceptive, dangerous, and democratically illegitimate". They also call on the Internet community to express solidarity by placing NoSoftwarePatents.com links and banners on many Web sites.

Defend the future! Europe's better off without software patents.
NoSoftwarePatents.com

It would be nice if someone with some serious design credentials would knock up some more aesthetically pleasing banners.


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The <a href="http://www.ffii.org/index.orig.en.html">FFII</a& gt;, a EU pressure group, described the decision as "a powerful statement from MEPs that the current Council text, and the logjam of concern it has caused, is simply not a sustainable way forward." FFII board member Jonas Maebe went on to say "The Commissioner can jumpstart the constructive dialogue by submitting a new and more balanced proposal to the European Parliament this time. By taking into account the countless new facts that have surfaced since the start of this procedure in 2002, the Commission has a great opportunity to reinvigorate the Lisbon strategy."

Poland had previously blocked the directive from coming in to being. It's opposed by groups who want to keep the EU free of copyrights on software, something common to the USA. They argue that rather than helping businesses protect their intellectual property, they act to stifle innovation. Supporters of the directive argue that EU legislation on copyrights is out dated and needs bringing into line with the US system.

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Plaxo's business model


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Start-up Plaxo sketches out business plan [CNET News.com - The Net]

OK - so now we know.

Whenever I've received an invitation to join Plaxo or to update my profile info, I've used as an excuse - the nebulous answers that Plaxo has given in the past as to their business model.

Well I guess I'll have to find a different excuse now.

I actually like the business model - charge for more advanced features - but the only feature they mentioned in this article was "better customer support".  That actually sounds like a charge for support" business model.  HHmmm maybe they should talk to Dave Sifry about that.

But then again - they only want $20 a year.  Geesh.  It costs more to look at naked pictures.  I guess they think lots of people will sign-up - but if it's like any other service, they'll only convert 5%.

So what's 5% of 2M?  100k users.  Times $20 a year.  That $2M a year.

Geesh hasn't Plaxo raised like over $20M now - or something like that?

What's wrong with the math here?


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Into the valley of the Business Model -
yee shall go


Into the valley of the Business Model -
yee shall go
04/14/2005 03:33 PM

MeetUp is now charging for organizing MeetUps.

$19 a month. I wonder how they came up with that number?

Jason Lefkowitz reports his feelings on this.

One good thing they did - they put their faces next to what they describe as "the bad news". Me - I don't consider it bad news.

There's a time for every social experiment to grow up, smell the mustard and get real. MeetUp has - congreats!


"Business Model" Explained


"Business Model" Explained 06/24/2004 08:07 AM
Two companies might do the same thing, but with very different business models.

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The Blogware business model 07/07/2004 02:41 AM

I've been trying to get to know Roland Tanglao and Boris Mann and their company Streamline. Here's an interesting post I found on Roland's blog about Blogware's business model..

Here's Roland......

A must read for prospective Blogware resellers and for bloggers and people who don't understand why Blogware is not being heavily promoted by Tucows. Summary: it's all about the resellers. Resellers made Tucows #2 in domain registration and similarly resellers will make Blogware a big player in the hosted blog space.



From An Open Letter to Blog Sceptic:

QUOTE

5/3/2/1. Ditch the resellers/launch a hosted version/offer to specific verticals/promote it...

Never gonna happen.

Here's why: Internet services providers represent the most powerful distribution channel on the internet. No single company can compete with the marketing muscle of 30,000 ISPs** who sit right in front of end-users and assist them in making critical technology choices and guide them as they dive into the internet - usually for the first time. No other channel can put you in front of individuals and the Fortune 500 simultaneously and no channel can better address the fickle needs of their local markets in a more appropriate fashion.

To get a better sense of this, take a look at our track record with domain names. In 1997, we were (according to the most liberal definitions) #85 in the domain name registration market. Today we are solidly #2 and we've been there for a couple of years. How did we get here? We dealt exclusively with internet services providers to the exclusion of all other market opportunities and we nailed their service requirements. By choosing and sticking to our distribution model very early in the game (some would argue that it chose us) we were able to focus on very specific attributes of our products and processes and build some truly excellent structures around everything. In other words, because we weren't trying to be all things to all customers, we were able to do some very amazing things with some very specific customer segments. And they responded in spades.

Our resellers kick serious a*s in the market place. This because the Tucows way of doing things gives them  the luxury of being able to focus on very specific and important things. Think of every other blogging company out there. They each have to a) be technical experts, b) be sales experts and c) be marketing experts just to one unit to a customer. Now take a look at the symbiotic nature of the relationship between Tucows and its direct customers. Our resellers have to be sales & marketing experts and develop strong customer service skills and Tucows has to focus on maintaining world-class technical services. Who would you bet on, the jack-of-all-trades or the team of specialists?

The downside to this approach is that it lacks the glitz and glam that retail oriented services employ. You will never see a full out PR blitz from Tucows and Blogware will never be a household name.  All wasted money. Remember, we're not the marketing brains in this relationship. We're the technical muscle.

Does that mean that our resellers are idly sitting by doing nothing? Nope. Right now, they are working on developing the right messages to direct at very specific markets - some are doing the institutional angle, some are going after telecommunications firms, others are targetting specific home-user verticals and others still looking to make quick wins at the expense of those with existing market share... And what I've seen so far looks great. Think of this as true "end-to-end marketing" Marketing at the edges. Clue-train compatible distribution. Teamwork. Focus. Whatever you call it, it works.

UNQUOTE



an alternate business model for gmail


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next, jason's going to start selling blogger accounts

The business model of the funny pages


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When I was in college in the early 90s (B.W. -- before web), I used to subscribe to the daily newspaper just to get my comics fix every morning (back when Bill Waterson, Gary Larson, and Berkeley Breathed were king). Then the web came along and I had to suffer through the only (unfunny) cartoonist to embrace the web. But not anymore. With stuff like Comics-via-RSS and Comictastic I can fire up an app and start laughing every morning. I doubt I ever buy a newspaper again for the funny pages, and on top of that, these even let me avoid the lame ones I don't care about.

A Business Model For WiFi Aggregation


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Robert X. Cringely's latest column discusses his idea for a killer WiFi aggregator business model that makes some sense - but could be very difficult from some significant reasons. He correctly points out the problems with current WiFi aggregator business models: they have way too little coverage and way too many players have their hands in the pie. For each dollar spent at a hotspot, a portion needs to go to the hotspot owner, the owner of the network and the aggregator (and potentially others) - and there just isn't that much money being spent at hotspots in the first place. His solution is that we need more hotspots, and the way to get more hotspots is to give away the equipment free. Basically, have a company that will give you free WiFi equipment in exchange for adding your hotspot to their network and giving you free access to the entire network. This way, he believes, an aggregator would quickly get to one million hotspots and pretty much guarantee the necessary level of coverage. The money, then, would come from others who pay the subscription fee to get on the network - and since the coverage is so great, and the aggregator no longer needs to share that revenue with the hotspots, people will be willing to pay up. Maybe. I'm certainly a fan of leveraging "free" in a promotion to build a business model, but not when that "free" is very costly. In order to get this going, the company would need to give away those million access points (and, probably, handle tech support for them) before they start making money. While you can bet they'd get a volume discount (and APs are getting cheaper every day), it's still a pretty big capital chunk to eat. Then, there are two other big problems I see. First, which he brushes off, most internet providers say sharing your connection is a violation of terms of service. Sure, there's the Speakea sy exception, but it's still not too common, and I'm not so convinced (as Cringely is) that they'll just rollover when they find out what's happening. The second problem is much more fundamental. I now have two choices if I want to use this fairly vast network of access points: (1) pay a monthly fee or (2) offer to host my own hotspot - where I get free equipment and free service. Guess what I'm going to do? Is there any reason not to get their free equipment just to get free access everywhere else? Who are the suckers who are actually going to pay for this service instead of just signing up to be a provider?

A new business model, driven by consumer
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needs
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AXA challenges Google's business model


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Meetup About Business Model Lessons


Meetup About Business Model Lessons 04/13/2005 02:55 PM
Meetup Inc. become something of an internet darling during the US Presidential campaigns, after people started using it for political organizing. The concept was straight-forward. Use the web to find like-minded individuals in a certain area who could (yup) "meet up" in person. What was unclear from the beginning, though, was how Meetup was ever going to make money. Originally, the plan was to get money out of the venues where the various meetups occurred. Apparently, that didn't work out, and now, Meetup is making news for its decision to charge each "group" $19/month to keep going. They certainly expect to lose many of their groups, and lots of people are already noting that the price seems quite steep for what were mostly small, informal gatherings. The real issue, though, is that it looks like Meetup has forgotten the first rule of internet-based business models: don't charge for something that was free before. It's very, very difficult to make that work (there are a few small exceptions). Generally speaking, though, if people expect something to be free, suddenly turning around and charging for it is seen as swiping the rug out from under them. They embraced your offering, in part, because it was free. You can charge for new and additional services -- but pissing off most of your users with surprise fees, after being sold on the free idea, tends to come back to bite many companies that have tried it. If anything, it tends to encourage competition to come in and offer what you used to offer... for free.

IM Interoperability: It's the Business
Model, Stupid


IM Interoperability: It's the Business
Model, Stupid
08/09/2004 11:40 PM
Microsoft's recent deal with the three major IM services demonstrates that business dealings, not competing technology protocols, are driving the big battle for interoperability.

Online Business Model for a Band?


Online Business Model for a Band? 04/02/2005 04:02 PM

Attacking the Spammer Business Model


Attacking the Spammer Business Model 11/17/2003 07:47 PM
Stephen Samuel asks: "Spammers spam because it's an 'easy way to make money'. They send out millions of spams knowing that 99.995% of them will be ignored, but ...

New Business Model, Or Smoke And
Mirrors?


New Business Model, Or Smoke And
Mirrors?
04/08/2005 06:26 PM
Jonathan Schwartz of Sun is out giving his talk again about how subscription fees are the way of the future for buying anything. One of his favorite examples (he's used it for quite some time) is that people will buy cars the way they buy mobile phones, where the device/car itself is free or close to fee, but there's a regular subscription fee that's locked in (he also likes to talk about how people will download "horn-tones" for their car, but that's a different story). He goes on to point out that for a car, this fee would be $220 -- noting that the carmakers have already thought about this. Beyond asking the obvious question (um which car are we talking about here -- because I imagine that a BMW is going to cost me more per month than a Hyundai), isn't this already how many people buy cars? It's called a loan or a lease. They buy the car with a little bit of money down, but pay regularly to cover the rest of the cost of the car. In fact, I'm sure, for some people and some cars, the amount is somewhere around $220. So, this isn't particularly amazing. It's not even new. It's just taking an existing business model and changing what you call everything. Who knew it was so easy to be considered a visionary?

The Phantom Looking More Real, New
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Business Model Still Questionable
05/10/2004 01:30 PM
As expected, Infinium Labs is using E3 as its coming out party to prove that they do, in fact, have a product. You may recall this is the company that has faced lots of doubt about whether or not its gaming console really existed. The company started to look a bit more respectable by hiring a CEO who helped develop the X-Box, but quickly lost a lot of goodwill by suing one of the sites that questioned the legitimacy of the company. Now, they're making a big push to prove that they exist. Wired News has an article about the company saying that instead of pushing it as competition to gaming consoles, they're targeting "occasional" or "lapsed" gamers and offering the system as a service. That is, if you agree to pay $30/month for two years you get the hardware "free" and access to the basic level of downloadable games they offer. Of course, it's not really free, but the hardware fee is baked into that monthly fee. Of course, it looks like they still don't have any publishers officially signed up. The games they're displaying at E3 are only for display at E3 and might not actually be available when the device/service launches in November. As anyone in the gaming business will tell you, if you don't have good publishers signed up early, the gaming device will fail. Infinium seems to believe they'll be able to sign up enough publishers now that they can demonstrate the device publicly and build some buzz. You'll also notice that the box looks entirely different than it did just a few months back when people were doubting that it really existed. More importantly, you have to wonder about the business model and the target market. They say they don't want hardcore gamers, because they'll already have a console and a PC with all the games they want. However, you have to wonder why the occasional or lapsed gamer wants to pay $30/month if they don't really play games that often. On top of this, the games they'll offer at that basic level of service are older games. As Infinium points out, this may help get publishers on board by offering them a new revenue stream for old games, but that also means that your offering users old games. I guess they're hoping that these lapsed video gamers won't notice that they're playing old games, but it doesn't seem like the most compelling pitch to a lapsed gamer: come back to gaming, but get locked into a two year, $30/month contract, and we'll let you play a few old games that you can probably pick up for a couple dollars in the bargain bin!

LinkedIn finally launches their business
model


LinkedIn finally launches their business
model
02/01/2005 08:42 PM

After 18 months - at 1.7 people Reid Hoffman is finally revealing his plan in a preview of his LinkedInsight jobs system.

Good luck Reid!


VOIP will change the business model of
the Bells


VOIP will change the business model of
the Bells
11/13/2003 03:08 AM
It may not happen this year or next but VOIP is going to start having a serious impact on the...

Model your business processes using
using BPML (XML Journal)


Model your business processes using
using BPML (XML Journal)
07/17/2002 01:55 AM

eBay's Business Model Patent Mess
Returns


eBay's Business Model Patent Mess
Returns
03/17/2005 03:26 AM
In 2002, someone who claimed he came up with the idea for online auctions and patented it before eBay existed sued the company for patent infringement. As we pointed out at the time, this was exactly what patents were not supposed to do. Here's a case where different people came up with similar ideas. One actually did something with it and built a real company, while the other didn't do anything with it at all, other than run to the patent office. Yet, the company that did something gets sued. That discourages companies from actually innovating. The companies that really do something open themselves up to lawsuits. While a court later tossed out the online auction patent for being too vague, they did award the guy nearly $30 million for his patent on "direct buying" online (yes, he actually patented that). Both sides appealed, and the court has found that, not only did eBay violate the direct buy patent, but it's bringing back the online auction patent as well, saying a lower court needs to check that out again.

Strong business model key to Dell's
striking evolution


Strong business model key to Dell's
striking evolution
09/22/2004 06:36 AM
Financial Post Sep 22 2004 10:26AM GMT

Micropayment Company Adjust Business
Model Away From The Internet


Micropayment Company Adjust Business
Model Away From The Internet
06/28/2004 05:22 AM
We've discussed multiple times why micro payments are overhyped for content online. Despite being told repeatedly by companies in the space that this time will be different, it looks like one such company (Peppercoin - which has been one of the loudest defenders of the "age of micropayments") is already discovering they need to adjust their business model. The cool thing about the way Peppercoin works is that it basically aggregates a bunch of purchases and creates a "representative sample" to lower the transaction fee paid to the credit card provider. The problem with using Peppercoin for internet content is the fact that most people don't want to pay for content -- especially when there are other options and the mental transaction costs are high. However, that doesn't change the fact that Peppercoin reduces credit card fees -- which is useful if only applied to a market where people already are willing to pay for things. So, that appears to be where Peppercoin is headed: away from internet transactions (though, they still claim that this will be a big space) and towards real world situations where tiny transactions rule, such as arcades.

Seeing the graphs from the trees - the
business model of the web is the same as
its underlying structure


Seeing the graphs from the trees - the
business model of the web is the same as
its underlying structure
03/14/2005 04:33 PM
It seems like a small thing, but day after day I can't help thinking that there is a distinct pattern...

YOUR FAILED BUSINESS MODEL IS NOT MY
PROBLEM sticker/tee design


YOUR FAILED BUSINESS MODEL IS NOT MY
PROBLEM sticker/tee design
04/12/2005 11:50 AM
Cory Doctorow: This sticker/t-shirt design -- YOUR FAILED BUSINESS MODEL IS NOT MY PROBLEM, with a Creative Communist logo -- is pretty sweet. Link (via Akma)


Suit targets heart of Google business
model


Suit targets heart of Google business
model
04/25/2004 11:33 PM
Boston Globe Apr 26 2004 4:17AM GMT

* Yahoo-Kimo plans shift to fee-based
business model


* Yahoo-Kimo plans shift to fee-based
business model
12/26/2003 11:28 PM
Taipei Times Online Dec 26 2003 10:41PM ET

ASC X12 releases draft XML reference
model (E-Business Standards Today)


ASC X12 releases draft XML reference
model (E-Business Standards Today)
07/24/2002 01:00 PM

Why Software Patents Exist: Legal Fees

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