Friday, February 25, 2005

The theory of the patent system, is that if we provide innovators with an incentive, in the form of financial reward, we'll get more innovation. So, it's interesting that so many innovative programmers seem to hate it:

Code is protected by copyrights. If you have competitors, beat them on implementation, or service. Playing the big-bad patent card is an admission that you can't compete otherwise.

In theory, these are the guys who the patent system is supposed to reward. But, as they're all too aware, in practice, it seems more to reward extortionists: has the jaw-dropping story about European futures exchanges, brokers and traders preparing for patent infringement claims from Trading Technologies, a US software company, natch, located in Chicago -- where else? -- which has hit on what it appears to view as a pot of gold for itself by obtaining two patents on its MD Trader software product in August of 2004, patents it is now aggressively enforcing. It settled [PDF] two patent infringement cases [PDF] already, under circumstances some are questioning, for some licensing dough, and it is currently suing eSpeed, the electronic arm of Cantor Fitzgerald. ...

TT has suggested to the four main futures exchanges -- two in Chicago and two in Europe, Euronext.Liffe and Eurex -- that they should cross its palm with silver to keep it from launching patent infringement lawsuits against them.

Note that "Trading Technologies" doesn't even claim that the exchanges have benefited in a direct way from whatever innovation they claim to have done. Instead, they are claiming patent rights to allow the exchanges to continue doing things that they were already doing. So the exchanges innovated, and as punishment for that, they get to pay off these parasites who claim, after the fact, a for royalties on systems and algorithms which they never helped develop. So much for encouraging innovation.

The patent system does have one other effect, though. The cost of the payoffs, and the attendant litigation, has a seriously chilling effect on small innovators, and particularly unfunded free software projects. Which may have something to do with big business pulling out all the stops at WIPO to preserve and extend it.

(That last, via BoingBoing which also refers us to two other stories of interest: why just signing into a website as "anon0101" doesn't keep them from finding out who you really are; also, on the surveillance front, how Italy, not most peoples' idea of a center of the wah on terrah, is running out of wiretaps).


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