02
Sat, Nov
2 New Articles

IBM and the Patent Race

Commentary
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

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.

 

 

BLOG COMMENTS POWERED BY DISQUS

LATEST COMMENTS

Support MC Press Online

$

Book Reviews

Resource Center

  • SB Profound WC 5536 Have you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application. You can find Part 1 here. In Part 2 of our free Node.js Webinar Series, Brian May teaches you the different tooling options available for writing code, debugging, and using Git for version control. Brian will briefly discuss the different tools available, and demonstrate his preferred setup for Node development on IBM i or any platform. Attend this webinar to learn:

  • SB Profound WP 5539More than ever, there is a demand for IT to deliver innovation. Your IBM i has been an essential part of your business operations for years. However, your organization may struggle to maintain the current system and implement new projects. The thousands of customers we've worked with and surveyed state that expectations regarding the digital footprint and vision of the company are not aligned with the current IT environment.

  • SB HelpSystems ROBOT Generic IBM announced the E1080 servers using the latest Power10 processor in September 2021. The most powerful processor from IBM to date, Power10 is designed to handle the demands of doing business in today’s high-tech atmosphere, including running cloud applications, supporting big data, and managing AI workloads. But what does Power10 mean for your data center? In this recorded webinar, IBMers Dan Sundt and Dylan Boday join IBM Power Champion Tom Huntington for a discussion on why Power10 technology is the right strategic investment if you run IBM i, AIX, or Linux. In this action-packed hour, Tom will share trends from the IBM i and AIX user communities while Dan and Dylan dive into the tech specs for key hardware, including:

  • Magic MarkTRY the one package that solves all your document design and printing challenges on all your platforms. Produce bar code labels, electronic forms, ad hoc reports, and RFID tags – without programming! MarkMagic is the only document design and print solution that combines report writing, WYSIWYG label and forms design, and conditional printing in one integrated product. Make sure your data survives when catastrophe hits. Request your trial now!  Request Now.

  • SB HelpSystems ROBOT GenericForms of ransomware has been around for over 30 years, and with more and more organizations suffering attacks each year, it continues to endure. What has made ransomware such a durable threat and what is the best way to combat it? In order to prevent ransomware, organizations must first understand how it works.

  • SB HelpSystems ROBOT GenericIT security is a top priority for businesses around the world, but most IBM i pros don’t know where to begin—and most cybersecurity experts don’t know IBM i. In this session, Robin Tatam explores the business impact of lax IBM i security, the top vulnerabilities putting IBM i at risk, and the steps you can take to protect your organization. If you’re looking to avoid unexpected downtime or corrupted data, you don’t want to miss this session.

  • SB HelpSystems ROBOT GenericCan you trust all of your users all of the time? A typical end user receives 16 malicious emails each month, but only 17 percent of these phishing campaigns are reported to IT. Once an attack is underway, most organizations won’t discover the breach until six months later. A staggering amount of damage can occur in that time. Despite these risks, 93 percent of organizations are leaving their IBM i systems vulnerable to cybercrime. In this on-demand webinar, IBM i security experts Robin Tatam and Sandi Moore will reveal:

  • FORTRA Disaster protection is vital to every business. Yet, it often consists of patched together procedures that are prone to error. From automatic backups to data encryption to media management, Robot automates the routine (yet often complex) 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:

  • FORTRAManaging messages on your IBM i can be more than a full-time job if you have to do it manually. Messages need a response and resources must be monitored—often over multiple systems and across platforms. 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:

  • FORTRAThe thought of printing, distributing, and storing iSeries reports manually may reduce you to tears. Paper and labor costs associated with report generation can spiral out of control. Mountains of paper threaten to swamp your files. Robot 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:

  • FORTRAFor over 30 years, Robot has been a leader in systems management for IBM i. With batch job creation and scheduling at its core, the Robot Job Scheduling Solution reduces the opportunity for human error and helps you maintain service levels, automating even the biggest, most complex runbooks. Manage your job schedule with the Robot Job Scheduling Solution. Key features include:

  • LANSA Business users want new applications now. Market and regulatory pressures require faster application updates and delivery into production. Your IBM i developers may be approaching retirement, and you see no sure way to fill their positions with experienced developers. In addition, you may be caught between maintaining your existing applications and the uncertainty of moving to something new.

  • LANSAWhen it comes to creating your business applications, there are hundreds of coding platforms and programming languages to choose from. These options range from very complex traditional programming languages to Low-Code platforms where sometimes no traditional coding experience is needed. Download our whitepaper, The Power of Writing Code in a Low-Code Solution, and:

  • LANSASupply Chain is becoming increasingly complex and unpredictable. From raw materials for manufacturing to food supply chains, the journey from source to production to delivery to consumers is marred with inefficiencies, manual processes, shortages, recalls, counterfeits, and scandals. In this webinar, we discuss how:

  • The MC Resource Centers bring you the widest selection of white papers, trial software, and on-demand webcasts for you to choose from. >> Review the list of White Papers, Trial Software or On-Demand Webcast at the MC Press Resource Center. >> Add the items to yru Cart and complet he checkout process and submit

  • Profound Logic Have you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application.

  • SB Profound WC 5536Join us for this hour-long webcast that will explore:

  • Fortra IT managers hoping to find new IBM i talent are discovering that the pool of experienced RPG programmers and operators or administrators with intimate knowledge of the operating system and the applications that run on it is small. This begs the question: How will you manage the platform that supports such a big part of your business? This guide offers strategies and software suggestions to help you plan IT staffing and resources and smooth the transition after your AS/400 talent retires. Read on to learn: