The personal ramblings and adventures of Mike Altman

The argument of whether business methods should have the ability to be patented at first sounds irrelevant and ludicrous that anyone would care. Upon closer inspection, the ramifications of such a change go beyond men in suits and high-rise bureaucratic empires. It could affect everything from software and pharma, to the teaching methods used to teach children in schools. On November 9^th 2009, the U.S. Supreme Court hear the oral argument of appeal for the re Bilski patent for a method of hedging risk in commodities trading. More specifically, re Bilski was rejected for a patent on a business model that asses risk for an energy payment plan based on upfront payment (before use). The patent was rejected on the grounds that the patent was an abstract idea and had no practical technological application thus, not a technological invention.

So what does this have to do with software and education? Justice Antonin Scalia explained the ramifications of this by equating a patent for business methods with standards in horse training. “Let’s take training horses, don’t you think that some people, horse whisperers or others, had some, you know, some insights into the best way to train horses? And that should have been patentable on your theory.” Why shouldn’t he make this outlandish comparison?

The decision of the appeal will and is being used in similar cases with IBM to combat the rejection of appeals for software. If a business method or more generally, an idea can be patented, what is to stop large corporations who can afford patent lawyers from claiming ownership over standard business practices? Imagine not being able to put in an IT ticket at work when something on your computer goes wrong. What would it be like if Dominos Pizza was the only pizza shop that could offer free delivery?

This could hit software the hardest. Software moves and develops very quickly. Computers and their capabilities have moved very far and fast over the past 20 years. Hardware has changed, and made it possible to do things made of 1960’s science fiction a reality in a very short period of time. Software innovates and grows along with the hardware to do new and powerful things. Software is able to innovate and progress so quickly because much of the development happens through virtual communities. Developers are able to share, inspire, challenge, and ultimately learn from each other. Sure, people may argue that open source is the epitome of socialism. But it would be a crime to argue that open source offers little in terms of innovation and peer-education for the purpose of moving software forward.

It comes down to companies claiming ownership not simply of their own products, but of mathematical algorithms used in their software. Patent ownership comes with over a decade of free monopoly type reign over a piece of technology or technological process before it enters into the public domain. In the world of software, falling a year behind is to become archaic and obsolete let alone 17 years. Patent ownership of a business model would therefore slow development to a halt. It is important to be able to build and improve on existing technology and software.

The ability to own a patent can be used as a defensive measure for companies. Suppose that a hugely successful e-marketing firm somehow solves the age old problem of spam with an algorithm. They could know how to offer complete and total spam protection without the need to aggregate large databases in order to block messages. The company could file a patent for this algorithm, and do nothing with it. Why would they do this? The company would loose all high ground on being able to profit from email spam by releasing the solution to the problem that they themselves create. So why not sit on the solution for a few years and keep their business profitable?

Sure a lot of the things I argue are worst case scenario if things go unchecked. It’s important to understand how far this decision for changes to patent law can reach. It must be dealt with delicately in order to ensure the modernization of technological ownership while keeping good business practice in check.

Further Reading:

• GEN – Oral Argument Sheds Light in Bilski v. Kappos
• Businessweek – Supreme Court to Review ‘Business Method’ Patents
• Washington Post – High court considers whether business methods can be patented
• Ars Technica – Microsoft’s pseudo sudo patent doesn’t really cover sudo

Google, everyone’s favorite ‘good guy’ in business and technology is starting to stir the pot something dangerous. Google Book Search is aiming to digitize the world’s written works into an online, searchable library. No one disputes that this is a great idea. The problem is that Google would be the sole proprietor of all of this information. Information that the world could benefit from. My opinions follow that of the Open Book Alliance’s stance (who consists of Amazon, Microsoft, Yahoo, along with other big names in web and information) on the issue.

The Open Book Alliance feels that “the mass digitization of books promises to bring tremendous value to consumers, libraries, scholars, and students.” The problem is that at this point, the US government is not very likely to fund a project of this magnitude. Google happens to have the resources to do it effectively without burdening the tax payer.

The trade off is that the corporate giant will own the rights to the product of this endeavor. Naturally their intentions go beyond serving the public. Google’s co-founder Sergey Brin stated “I’ve been surprised at the level of controversy there, because digitalizing the world’s books to make them available; there’s been nobody else who’s attempted it at our scale.” It’s obvious that Google’s intentions are to profit off this in some way. And why shouldn’t they? If they can accomplish such a feat they deserve to make money off of advertising, crating new technology by training AI on a massive scale of information, and making it easy to access the information. The problem comes with the ownership of the data. It opens the doors for Google to hold the infinite information in these books hostage for profit in the form of subscription services and the like.

One of the problems that Google’s project raises with publishers is the potential of distribution of orphan works. Orphan works (in this context,) are books and journals who’s publishers either don’t exist or have unknown proprietors. These works do not quite qualify for public domain, but are being included in Google’s Book Search. Google is taking the scan first, ask permission later approach. In other words, they will distribute books that aren’t claimed by a publisher or author unless explicitly told not to by the owner. Ultimately this can (and in many cases will) lead to illegal distribution of published work if the proprietor does not speak up.

It’s fair to hope that Google will be responsible with their mass of knowledge, but that’s just not enough. By ensuring that the project is done with the public’s best interest in mind it’s important to set the rules before the game starts. The Open Book Alliance has set some baseline requirements that they would like too see addressed in the Google settlement. One of which is that “the settlement must result in the creation of a true digital library that grants all researchers and users, commercial and non-commercial, full access that guarantees the ability to innovate on the knowledge it contains.” This more or less encompasses the argument against Google’s Book Search project.

The amount and type of information that would potentially be at Google’s finger tips once this project is complete, would be difficult for Google’s corporate competitors (and impossible for small startup businesses) to replicate. Thus creating a monopoly in the form of digital information. Information that until now has been free to access for the public through the use of libraries. By updating this information for the modern digital age, Google will be creating a whole new domain for innovation.

If Google opens up the data that is collected to the public, they will still have the competitive edge on the technology by being able to get a head start on utilizing the information as the proprietors of the means to create the digital library. For example, they can develop early search technology to work with the digital library during the course of acquisition of the books. Thus, they can still profit off of the fruits of their labors whilst still leaving the window open for competitors to innovate and expand on the public domain of knowledge in a new format.

Further Reading:

• Open Book Alliance - http://www.openbookalliance.org/
• Mercury News – Google’s desire to scan old books has critics casting it as Goliath
• Library Journal – Google Settlement Due in Court November 9; Open Book Alliance Issues “Requirements”

Capitalism is known for its consumer driven economy. It creates competition and therefore encourages innovation and low cost. The consumer ultimately decides on what is an acceptable price and product quality. In these modern times with booming technology we are starting to see a rising trend that has somehow been allowed to exist against the common scene of the common consumer. Vendor lock-in has slipped under the radar as a Trojan horse without causing alarm and is now wreaking havoc and locking consumers and their wallets to monopolized prices all while squashing any and all competition.

How did this happen? Sometimes disguised as product loyalty, Apple sells its hard ware sporting an image. What happens when that shiny MacBook breaks? Can owners of broken hardware bring it to a third party specialist who can fix any hardware that follows standards in best practices in the market? No, consumers must 9 times out of 10 bring it to an Apple store, so that an Apple technician can fix the problem. You bought an Apple product, now you have no choice but to come back for extra service, whether it is an upgrade or extension of service. (Note the irony in that Apple is now locked into a strangling contract with AT&T.)

The initial investment into a company or product ultimately makes smaller choices of upgrades and additions cheaper to stay with the vendor than to change. The next thing the consumer knows, their entire “owned” suite of products (whether it be computer software, hardware, cell phone service, etc.) is with a single vendor. The consumer has essentially dug themselves into a hole of brand loyalty intentionally or not and is therefore forced to continue to financially feed the monster. Where does the cycle end and more importantly how does it hurt capitalism as a whole?

As I have stated earlier, capitalism thrives on innovation and the competition. Small business is a risk. There is no sure thing with a start up. There is less money to throw around, and this causes small business to stay innovative an ahead of the curve. This is its ace in the hole and the only thing it has to fight bigger companies. Large companies have their resources at their disposal; products can be created faster and cheaper. Ultimately the savings can be passed down to the consumer. Small business’s job is to challenge large companies with its innovation. Large companies’ jobs are to create competitive prices for the small business to beat. Thus business swings back and forth as David beats Goliath and vice versa on a regular basis. In the end, consumers win. They get the best of both worlds.

What is happening with vendor lock-in trends is that large companies are forcing their product, at a price they decide is fair on a consumer. The consumer must play along, or pay the price of breaking the cycle. Breaking the cycle means giving up their brand for a lesser known brand that offers innovation at a higher cost. The cost being: throwing away an initial investment into a vendor lock-in type product on top of the cost of investment into the smaller brand’s product.

It’s easy to see how the consumer is getting the tail end of the deal, but it goes beyond cost. Innovation suffers because small business suffers. It’s a snowball effect that creates a standstill in these fast moving technological times. It’s apparent that the problem exists, but there is no easy answer. Open source is starting to get more attention than it has in the past, but it only applies to software. The best way to change the current trends in business is to let the consumer’s money talk. In the end, the US is still run by capitalism. Money is the only language that capitalism understands. We won’t see a change until consumers wise up to the vendor lock-in gift and make it more profitable for business to compete rather than bully.