[Patents] Openness and success

[halber@timsi.com.pl (Jozef Halbersztadt)]

Till now nobody proved in details that secrecy (patents are form
of secrecy) is wrong for economical and technical development. But
there are studies why Silicon Valley was so successful, why Northern
California surpassed Boston area. The answer is that in California
people were mobile and used to move with secrets. The authors are
silent about patents because there were very few computer patents in
those days. Look, please, at:
Alan Hyde, The Wealth of Shared Information: Silicon Valley's
High-Velocity Labor Market, Endogenous Economic Growth, and the Law of
Trade Secrets (1998) http://www.andromeda.rutgers.edu/~hyde/
Silicon Valley: The Wealth of Shared Information; Some Economics of
Nonrivalrous Information
Legal Impediments to Endogenous Growth
How Silicon Valley Effectively Abolished Trade Secrets
Three Alternative Economic Analyses
Alan Hydeis developing ideas that have source in a famous book:
AnnaLee
Saxenian, Regional Advantage: Culture and Competition in Silicon
Valley and Route 128 (1994).


>
> Cohen, Julie und Lemley, Mark (2000): ³Patent Scope and Innovation
in the
> Software Industry², in: Columbia Law Review 89(1): 1-57
>
Is available at the net.

PDF files available at www.ssrn.com

"Patent Scope and Innovation in the Software Industry"

      BY:  MARK A. LEMLEY
              University of California-Berkeley
           JULIE E. COHEN
              Georgetown University Law Center
              University of Michigan Law School

Document:  Available from the SSRN Electronic Paper Collection:
           http://papers.ssrn.com/paper.taf?abstract_id=209668


ABSTRACT:
 Software patents have received a great deal of attention in the
 academic literature. Unfortunately, most of that attention has
 been devoted to the problem of whether software is or should be
 patentable subject matter. With roughly 40,000 software patents
 already issued, and the Federal Circuit endorsing patentability
 without qualification, those questions are for the history
 books. The more pressing questions now concern the scope to be
 accorded software patents. In this paper, we examine the
 implications of some traditional patent law doctrines for
 innovation in the software industry. We argue that patent law
 needs some refinement if it is to promote rather than impede the
 growth of this new market, which is characterized by rapid
 sequential innovation, reuse and re-combination of components,
 and strong network effects that privilege interoperable
 components and products. In particular, we argue for two sorts
 of new rules in software patent cases.

 First, we advocate a limited right to reverse engineer
 patented computer programs in order to gain access to and study
 those programs and to duplicate their unprotected elements. Such
 a right is firmly established in copyright law, and seems
 unexceptional as a policy matter even in patent law. But because
 patent law contains no fair use or reverse engineering
 exemption, patentees could use the grant of rights on a single
 component of a complex program to prevent any "making" or
 "using" of the program as a whole, including those temporary
 uses needed in reverse engineering. While patent law does
 contain doctrines of "experimental use" and "exhaustion," it is
 not at all clear that those doctrines will protect legitimate
 reverse engineering efforts. We suggest that if these doctrines
 cannot be read broadly enough to establish such a right,
 Congress should create a limited right to reverse engineer
 software containing patented components for research purposes.

 Second, we argue that in light of the special nature of
 innovation within the software industry, courts should apply the
 doctrine of equivalents narrowly in infringement cases. The
 doctrine of equivalents allows a finding of infringement even
 when the accused product does not literally satisfy each element
 of the patent, if there is substantial equivalence as to each
 element. The test of equivalence is the known interchangeability
 of claimed and accused elements at the time of (alleged)
 infringement. A number of factors unique to software and the
 software industry - a culture of reuse and incremental
 improvement, a lack of reliance on systems of formal
 documentation used in other technical fields, the short
 effective life of software innovations, and the inherent
 plasticity of code - severely complicate post hoc assessments of
 the "known interchangeability" of software elements. A standard
 for equivalence of code elements that ignores these factors
 risks stifling legitimate, successful efforts to design around
 existing software patents. To avoid this danger, courts should
 construe software claims narrowly, and should refuse a finding
 of equivalence if the accused element is "interchangeable" with
 prior art that should have narrowed the original patent, or if
 the accused improvement is too many generations removed from the
 original invention.


and


Who Owns the Charles River Bridge? Intellectual Property and
 Competition in the Software Industry"

      BY:  ROBERT P. MERGES
              University of California at Berkeley
              School of Law

Document:  Available from the SSRN Electronic Paper Collection:
           http://papers.ssrn.com/paper.taf?abstract_id=208089


ABSTRACT:
 Long, long ago, in an economy far away, decision makers
 responsible for maintaining the footings of commerce faced a
 troubling question: should entrenched property rights,
 manifested in a publicly chartered bridge franchise, be
 permitted to stand in the way of a new and better bridge, to
 compete directly with the established one? The sanctity of
 public charters collided with the imperative of technological
 progress. In a narrow legal sense, the Charles River Bridge case
 rejected the notion that a state-granted corporate charter
 conferred a perpetual exclusive franchise. But in a wider sense,
 the case delivered a sweeping endorsement of Jacksonian
 ideology: competition wins out -- over established franchises,
 over old money, over political influence.

 Some sectors of the digital economy are experiencing the
 powerful "winner takes all" influence of markets for "network
 goods." For the "winning" firms in these markets, intellectual
 property law is necessary to preserve dominance. It is the legal
 construct that permits private ownership of the technological
 standards that underlie network markets. Microsoft's copyright
 in its Windows operating system is a good example.

 This essay inquires into the necessity of an updated Charles
 River Bridge principle for the digital era. It explores whether
 and when the modern state-granted exclusive franchise of
 intellectual property must yield to demands for competition and
 innovation. It also speculates about the need for an expansive
 doctrine borrowed from trademark law -- "technological
 genericide," which truncates a property right when the asset it
 covers becomes a technological standard essential to a
 significant slice of commerce. The essay recognizes that
 intellectual property is not quite the same as a state charter,
 and also that "takings" law is a far more binding restraint now
 than in Jacksonian times. It thus concludes with some thoughts
 about the potential for compensating intellectual property
 rights owners whose previously protected works have "gone
 generic."