Software Patents and/or Software
`Development∗
`
`Wendy Seltzer†
`
`INTRODUCTION
`
`Many contemporary treatments of the patent system
`begin with Fritz Machlup’s damning with faint praise:
`
`If we did not have a patent system, it would be irresponsible, on the
`basis of our present knowledge of its economic consequences, to
`recommend instituting one. But since we have had a patent system
`for a long time, it would be irresponsible, on the basis of our present
`knowledge, to recommend abolishing it.1
`
`Yet he concludes that for all its imperfections, the
`patent system is still worth keeping.2 Patent may introduce
`costs and inefficiencies, this analysis goes, but since patents
`serve a necessary function in creating incentives to innovate,
`we must bear and mitigate their costs. The time is ripe to
`revisit that analysis.
`In the case of software patents, I challenge the incentive
`side of the equation: Patents do not provide a useful incentive
`to innovate in the software industry, I contend, because the
`patent promise ill-suits the engineering and development
`practices and business strategies of software production. The
`problem is not merely an inefficiency in implementation of
`software patent, but a structural mismatch between where the
`
`∗ © 2013 Wendy Seltzer. This work is licensed under a Creative Commons
`Attribution 3.0 Unported License.
`† Senior Fellow, Yale Law School Information Society Project, and Senior
`Researcher, Berkman Center for Internet & Society at Harvard University. Thanks to
`workshop participants at the University of Colorado, Princeton Center for Information
`Technology Policy, Yale Law School, and TPRC. Research performed while a Fellow at
`Silicon Flatirons Center at University of Colorado School of Law was funded by a
`generous grant from Brad Feld to the Silicon Flatirons Center. All opinions are those of
`the author. Contact wendy@seltzer.org.
`1 SUBCOMM. ON PATENTS, TRADEMARKS, & COPYRIGHTS OF THE S. COMM. ON
`THE JUDICIARY, 85TH CONG., AN ECONOMIC REVIEW OF THE PATENT SYSTEM 80 (Comm.
`Print 1958), [hereinafter S. SUBCOMM., ECONOMIC REVIEW].
`2 Id.
`
`929
`
`Plaid Technolgies Inc.
`Exhibit 1016
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`incentive applies and how software innovation happens. Even
`an ideally implemented software patent—well examined, fully
`disclosed and enabling, and properly scoped in light of the prior
`art—would fail to serve the incentive functions intended by the
`Constitution, the Patent Act, and standard patent theory.
`Previous scholarship, whether critical or congratulatory
`of software patent, has largely failed to examine the structure
`of software development and the institutional specifics of
`patent’s operation in this industry. I therefore look at these
`mechanics: How is the incentive function of patent believed to
`operate? How does it operate in the software industry? Does
`the tool serve its goals? Addressed head on, even before
`compounding the issue with side effects and unintended
`consequences, I conclude that the answer to this last question
`is “no.” Present knowledge and experience now offer sufficient
`evidence that patents disserve software innovation.
`Part I situates the problem by providing an account of
`the tangle of patent lawsuits, licenses, and threats in the
`mobile phone industry.
`Part II describes the nature of software development, its
`sources of innovation, and its business environment. This part
`draws on sources from engineering, computer science, and
`business and strategy literature, as well as the experiences of
`commercial and open source software developers. I discuss
`several ways in which software development differs from the
`canonical model of manufacturing widgets as well as the
`challenges of going from idea to implementation, including
`prototyping, revising to meet user needs, and debugging. With
`the aim of identifying common frameworks, this part focuses on
`the nuts and bolts of how systems function, a feature shared
`with New Institutional Economics literature. While market
`dynamics differ among segments, we can identify commonalities
`derived from the underlying nature of software.
`Part III reviews existing legal theories of patent
`incentives and innovation. It formalizes the mismatch between
`incentive theory and software patent practice. In many of the
`accounts that attribute value to software patents, a circularity
`exists: startups claim that patents are important because
`investors demand them, whereas venture capitalists, who view
`patents as a signal of capacity or uniqueness, are in fact seeing
`a show aimed at attracting
`investment rather than a
`demonstration of genuine novelty or value to the customer
`market. Kitch’s prospect theory does no better to validate
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`2013] SOFTWARE PATENTS AND/OR SOFTWARE DEVELOPMENT 931
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`software patents. The patent claim is staked too early to give
`the proprietor a useful coordinating or notice function.
`Part IV applies the theories about patent incentives and
`innovation to software more specifically. Where do software
`developers and venture capital backers seek patents, and how
`do individuals and firms use them? Looking particularly at the
`timing of patent’s intervention in the system, I conclude that it
`encourages idea-claiming, not innovation; idea-generation, but
`not implementation, debugging, and deployment. A player
`focused on patenting can obtain numerous patents without
`developing any of the technologies to useful
`levels of
`deployment or disclosure, leaving a minefield of abstract patent
`claims for others who actually deploy software. Hence, the
`“troll” problem is particularly acute in the software field.
`Because generating a patentable idea for an initial invention
`rarely creates a bottleneck in the software development
`process, software patents that never reach implementation
`more frequently create entangling thickets than productive
`incentives. Here, I also analyze the patent alternatives that are
`available to protect software development: trade secrecy,
`copyright, first-mover advantage, and market complements.
`Part V uses this analysis to reflect on the institutional
`dynamics of patent law. In particular, close analysis of software
`patents and software development adds to the ongoing debate
`over technology—specificity versus uniformity in law and the
`proper role of courts versus Congress in deciding patent
`questions. This analysis will also assist in better framing the
`question of how best to uphold the constitutional mandate to
`“promote the progress of science and useful arts.”3
`
`I.
`
`A.
`
`THE MOBILE PHONE MESS
`
`Smartphone Patent Wars
`
`Smartphones are everywhere. As the hottest selling
`consumer product category in consumer electronics history,
`smartphones have provoked moral panics (are we losing ourselves
`behind screens, neglecting interpersonal communication? are kids
`“sexting”?); safety risks (don’t text and drive); and development
`optimism (in developing countries, where more people have cell
`phones than landlines, the phone is becoming the basis for
`mobile commerce and access to computing power).
`
`3 U.S. CONST. art. I, § 8, cl. 8.
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`These devices have been at the heart of the last few years’
`most ferocious patent storms.4 Throughout 2012, in the United
`States alone, dozens of patent litigations focused directly or
`indirectly on mobile phone technology.5 Some of those suits relate
`to hardware
`features but more
`frequently concern the
`smartphone’s software capabilities.6 For example, Lodsys, a
`Marshall, Texas corporation, has no known products, but the
`company offers patented technologies “available for licensing”7
`and has sued or threatened to sue dozens of application software
`companies alleging that in-app purchases and rating functions
`utilize Lodsys proprietary technology.8 Although Lodsys claims
`that Apple, Google, and Microsoft have patent licenses covering
`their own “nameplate” products,9 it argues that those do not extend
`
`
`
`
`4 See, e.g., Apple, Inc. v. Samsung Electronics Co., 11-cv-1846 (N.D. Cal. 2012);
`
`Apple Inc. v. Motorola Mobility, No. 11-cv-178 (W.D. Wisc. 2012); Microsoft Corp. v.
`Motorola, Inc., No. C10-1823 (W.D. Wash. 2012); In the Matter of Mobile Electronic Devices,
`including Wireless Communication Devices, Portable Music and Data Processing Devices,
`and Tablet Computer, 2012 WL 4077563 (U.S. Int’l Trade Comm’n).
`5 See generally Fred I. Williams & Rehan M. Safiullah, The Smartphone Patent
`
`Wars: A U.S. Perspective, 18
`IP LITIGATOR, July/Aug. 2012, available at
`http://cdn.akingump.com/images/content/5/5/v2/5506/IPLIT070812WilliamsSafiullah.pdf.
`6 See generally id. As the case of software-defined radio demonstrates, the
`
`lines between hardware and software are changing. See, e.g., articles discussed in
`Software Defined Radio, ARRL.ORG, http://www.arrl.org/software-defined-radio (last
`visited Mar. 22, 2013); see also Stephen M. Blust, Software Based Radio, in SOFTWARE
`DEFINED RADIO: ENABLING TECHNOLOGIES 5 (Walter H.W. Tuttlebee, ed. (2002))
`(describing a “shift from employing a traditional hardware-focused application-specific
`approach to radio implementation to using a software application to perform the radio
`tasks on a computing platform”).
`7 Licensing, LODSYS GROUP LLC, http://www.lodsys.com/licensing.html (last
`
`visited Oct. 2, 2012).
`8 Eric Mack, Mobile Patent Wars: A Closer Look at How Everyone Loses, PC
`
`WORLD (Nov. 6, 2011, 9:00 PM), http://www.pcworld.com/article/239873/mobile_patent_
`wars_a_closer_look_at_how_everyone_loses.html.
`9 See Q: Lodsys Is Trying to Force Apple to Take a License by Pressuring IOS
`
`Developers, LODSYS GROUP LLC (May 15, 2011), http://www.lodsys.com/1/post/
`2011/05/q-lodsys-is-trying-to-force-apple-to-take-a-license-by-pressuring-ios-
`developers.html; Q: What About Other Operating Systems such as Android?, LODSYS
`GROUP LLC (May 15, 2011), http://www.lodsys.com/1/post/2011/05/q-what-about-other-
`operating-systems-such-as-android.html.
`
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`2013] SOFTWARE PATENTS AND/OR SOFTWARE DEVELOPMENT 933
`
`to third-party developers.10 Apple has moved to intervene,11 and
`Google has called for reexamination of the patents.12
`Patents are clearly costly.13 Their drafting and
`prosecution take time and money that could be spent on
`product development. Litigation costs start at nearly half a
`million dollars before a case even gets to trial.14 Damages in the
`event of a loss can run to millions of dollars.15 Further,
`companies are now making acquisitions with a primary aim to
`obtain patents. A coalition including Apple, Microsoft, and
`Research In Motion paid $4.5 billion to acquire Nortel’s patent
`portfolio in the company’s bankruptcy auction in July 2011.16
`These patents amounted to $700,000 apiece for their coalition
`of purchasers—who, given that the sale included no going
`concern, acquired only the use of the patents but none of the
`know-how or experience of the inventors. When Google
`announced its agreement a few weeks later to acquire Motorola
`Mobility Inc. for $12.5 billion, the acquisition of a major mobile
`hardware manufacturer was widely read as a purchase of a
`defensive portfolio of mobile software patents as a means to
`
`
`10 Apple’s License Claim Disputed, LODSYS GROUP LLC (May 31, 2011),
`
`http://www.lodsys.com/1/post/2011/05/-apples-license-claim-disputed.html; see also Sarah
`Perez, Patent Holding Firm Lodsys Goes After Android Developer for Use of In-App Payments,
`READWRITEWEB (May 27, 2011), http://www.nytimes.com/external/readwriteweb/2011/05/
`27/27readwriteweb-patent-holding-firm-lodsys-goes-after-andro-98683.html.
`11 Apple Inc.’s Motion to Intervene, Lodsys, LLC v. Combay, Inc. et al., 11-cv-272,
`
`(E.D. Tex. June 9, 2011 available at http://www.scribd.com/doc/57508610/0-Apple-Motion-to-
`Intervene-Against-Lodsys.
`12 See Google Steps Up to Defend Android Developers from Patent Lawsuit,
`
`WIRED.COM (Aug. 13, 2011, 2:20 AM), http://www.wired.com/gadgetlab/2011/08/google-
`android-lodsys-patent.
`13 See generally JAMES BESSEN & MICHAEL J. MEURER, PATENT FAILURE:
`
`HOW JUDGES, BUREAUCRATS, AND LAWYERS PUT INNOVATORS AT RISK 39-42 (2008).
`“Innovators can benefit from patents and at the same time be burdened with dispute
`costs that exceed the value of those benefits.” Id. at 96.
`14 STEVEN M. AUVIL & DAVID A. DIVINE, AM. INTELLECTUAL PROP. LAW ASS’N,
`
`REPORT OF THE ECONOMIC SURVEY 2011, at 35 (2011).
`15 A recent PWC study found that annual median damages awards ranged
`
`from $2.4M to $10.5M. See CHRIS BARRY ET AL., THE CONTINUED EVOLUTION OF
`PATENT DAMAGES LAW (PriceWaterhouseCoopers ed., 2010).
`16 See Chris V. Nicholson, Apple and Microsoft Beat Google for Nortel Patents,
`
`N.Y. TIMES DEALBOOK (July 1, 2011, 4:58 AM), http://dealbook.nytimes.com/
`2011/07/01/apple-and-microsoft-beat-google-for-nortel-patents/ (last updated July 1,
`2011, 8:31 PM). Similarly, in 2011, another consortium consisting of Microsoft, Oracle,
`Apple, and EMC spent $450 million for 882 patents owned by Novell. See CPTN
`Holdings LLC and Novell Inc. Change Deal in Order to Address Department of Justice’s
`Open Source Concerns, DEP’T OF JUSTICE (Apr. 20, 2011), http://www.justice.gov/
`opa/pr/2011/April/11-at-491.html; Press Release, Novell Completes Merger with
`Attachmate and Patent Sale to CPTN Holdings LLC, Novell (Apr. 27, 2011),
`http://www.novell.com/news/press/2011/4/novell-completes-merger-with-attachmate-
`and-patent-sale-to-cptn-holdings-llc.html.
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`protect Google’s Android mobile operating system and its
`users.17 From a strategic perspective, there were plenty of
`reasons for Google not to enter the hardware business, but it
`apparently became clear that without patents to counter-assert
`against patent attackers, Android would lose the confidence of
`other hardware makers and fail.
`Big companies are not only on the defensive, though;
`most are also wielding patents on offense in the smartphone
`arena. Apple has stopped smartphone imports at the border,
`suing before the International Trade Commission (ITC) to enjoin
`HTC, Samsung, and Motorola from bringing allegedly infringing
`smartphones into the United States.18 In Europe, Samsung sued
`to block Apple’s sales.19 Microsoft has sued Motorola, among
`others; Nokia has sued Apple.20 And the list goes on.
`
`B.
`
`The Idea of Pinch-to-Zoom
`
`Patents are supposed to promote innovation. Even these
`costs might be justified, their proponents say, if they result in
`more innovation. To understand patent basics, we might look
`at a patent from the middle of the road: 7,479,949, “Touch
`screen device, method, and graphical user
`interface for
`determining commands by applying heuristics,”21 and 7,812,828,
`“Ellipse Fitting for Multi-Touch Surfaces,” issued October 12,
`2010.22 These patents belong to Apple, an extraordinarily
`successful company that manufactures actual hardware and
`software, as compared to non-practicing entities like Lodsys
`who do neither. Apple Inc. has sued and been sued on
`infringement claims for both of these patents.
`The ’949 patent claims the use of touch gestures on a
`screen to issue commands by three different methods: as a
`stored computer program (or software); as a device operated by
`the software; and finally, as a method implemented within the
`
`
`17 See Amir Efrati & Spencer E. Ante, Google’s $12.5 Billion Gamble, WALL
`
`ST. J., Aug. 16, 2011, at A1 (“The Motorola deal also gives the search giant a trove of
`more than 17,000 patents to defend itself against a rash of lawsuits against its Android
`software . . . .”).
`18 See Williams & Safiullah, supra note 5, at 7-9.
`
`19 Lance Whitney, Apple Suing to Block Samsung Phone Sales in Japan,
`
`CNET NEWS (Sept. 8, 2011, 6:25 AM), http://news.cnet.com/8301-13578_3-20103189-
`38/apple-suing-to-block-samsung-phone-sales-in-japan/.
`20 Williams & Safiullah, supra note 5, at 6-7.
`
`21 U.S. Patent No. 7,479,949 (filed Apr. 11, 2008), available at http://patft.uspto.gov/
`
`netahtml/PTO/srchnum.htm (search “7479949”).
`22 U.S. Patent No. 7,812,828 (filed Feb. 22, 2007), available at http://patft.uspto.gov/
`
`netahtml/PTO/srchnum.htm (search “7812828”).
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`2013] SOFTWARE PATENTS AND/OR SOFTWARE DEVELOPMENT 935
`
`software.23 The patent describes this program/device/method in
`more than 350 pages with 293 drawings, yet it includes no
`source code and no demonstration of
`the underlying
`implementation.24 Anyone who wanted to implement Jobs et
`al.’s “method, and graphical user interface for determining
`commands by applying heuristics”25 would still have to write his
`or her own code.
`Many aspects of the user interface are described in the
`specification and diagrams of the ’949 patent, but after being
`narrowed during prosecution and reexamination, the patent
`claims only some aspects of scrolling in one or two dimensions
`and selecting which areas of a screen to move.26 But because the
`patent is not limited to any particular program used by Apple,
`its narrowed claims expand again upon the company’s actions
`enforcing it. Any device could be accused of infringing the
`patent if the device permits finger-driven scrolling and
`panning; if it determines, based on touch motion, the degree of
`vertical-only scrolling; or if it permits a two-fingered twist to
`rotate. Many devices are so accused.27
`True, these gestures have been used to great effect on
`the iPhone, which Steve Jobs introduced in January 2007 with
`a slide reading “Patented”28 and released to the public (to
`camped-out lines in front of Apple stores) on June 29, 2007.29
`But market demand does not necessarily indicate that the idea
`was a novel or non-obvious solution, the legal prerequisites for
`the grant of any patent.30 Rather, it indicates that Apple
`
`
`23
`’949 Patent, at [54].
`
`24
`
`’949 Patent.
`25 See id.
`
`26 See generally id.
`
`27 See Complaint at 4, Apple, Inc. v. Motorola, Inc., No. 11-08540, 2011 WL
`
`6257973 (Dist. Ct. N.D. Ill. 2012) (accusing a number of Motorola mobile devices of
`infringing U.S. Patent No. 7,479,949, such as the “Droid, Droid 2, Droid X, Cliq, Cliq
`XT, BackFlip, Devour A555, Devour i1, and Charm”).
`28 See Nilay Patel, Apple vs. Palm: The In-Depth Analysis, ENGADGET (Jan.
`
`28, 2009, 1:28 PM), http://www.engadget.com/2009/01/28/apple-vs-palm-the-in-depth-
`analysis/; Macworld 2007 Keynote Photo Gallery, ENGADGET, http://www.engadget.com/
`photos/macworld-2007-keynote-photo-gallery/131095/ (last visited Aug. 25, 2012).
`29 See Jeremy W. Peters, Gave Up Sleep and Maybe a First-Born, but at Least
`
`I Have an iPhone, N.Y. TIMES, June 30, 2007, at C3, available at http://www.nytimes.com/
`2007/06/29/technology/29cnd-phone.html.
`30 See 35 U.S.C. §§ 102, 103 (2006) (setting forth conditions for novelty and
`
`non-obvious subject matter). Novelty and utility are prerequisites of patentability. Id.
`Thus, the patent must not have been disclosed to the public (by various means) prior to
`application. Id. § 102. Additionally, a patent may not be granted if the invention was a
`non-obvious solution, that is, the idea must not have been obvious to a person skilled in
`the art. Id. § 103. In other words, it must not have been obvious to other potential
`inventors to “combine references,” or ideas contained in research available to others at
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`implemented its solution well. Use of that “invention” is on its
`own clearly insufficient to make a product succeed. For
`example, HP/Palm—which Apple accused of copying
`its
`multitouch gestures in Palm’s WebOS—shuttered the entire
`WebOS product line in response to low sales, despite critical
`acclaim for innovative features distinct from Apple’s.31
`Apple’s release of the iPhone certainly inspired the more
`rapid development of other full-featured smartphones with
`touch screens. According to Steven Levy, Google dropped a
`keyboard-focused model from its Android efforts after seeing
`the iPhone.32 In 2008, Steve Jobs visited Google, where he “felt
`that Google had stolen Apple’s intellectual property to do so,
`appropriating features for which Apple had current or pending
`patents.”33 According to Levy, Jobs
`
`apparently was successful, at least in the first version of the Google
`phone,
`in halting [Google’s]
`implementation of some of the
`multitouch gestures that Apple had pioneered. . . . According to one
`insider, Jobs demanded that Google remove support of those
`gestures from Android phones. Google complied, even though those
`gestures, which allowed users to resize images, were tremendously
`useful for viewing web pages on handheld devices.34
`
`Yet Android had multitouch support in its software,
`though it remained hidden; the code was present but unused.35
`Outside the United States, and in modified U.S. phones, users
`could “pinch-to-zoom” with impunity.36 In mid-2010, when
`
`
`the time, in order to make the invention. Id.; see also KSR Int’l Co. v. Teleflex Inc., 550
`U.S. 398, 407 (2007).
`31 See Brian X. Chen, In Flop of H.P. TouchPad, an Object Lesson for the Tech
`
`Sector, N.Y. TIMES (Jan. 1, 2012), http://www.nytimes.com/2012/01/02/technology/
`hewlett-packards-touchpad-was-built-on-flawed-software-some-say.html
`(describing
`the WebOS platform); Mat Honan, HP Killing WebOS Devices, GIZMODO (Aug. 18,
`2011, 3:20 PM), http://gizmodo.com/5832291/hp-killing-webos
`(describing HP’s
`announcement that it was ceasing development).
`32 See STEVEN LEVY, IN THE PLEX: HOW GOOGLE THINKS, WORKS, AND SHAPES
`
`OUR LIVES 221 (2011); see also Scott Cleland, What Really Made Steve Jobs So Angry at
`Google?, GIZMODO (Sept. 10, 2012), http://gizmodo.com/5941817/what-really-made-
`steve-jobs-so-angry-about-google.
`33 LEVY, supra note 32, at 221.
`
`34 Id.
`
`35 See John Herrman, The G1’s Deepest, Darkest Secret: Hidden Multi-Touch,
`
`GIZMODO (Nov. 18, 2005, 5:28 AM), http://gizmodo.com/5091705/the-g1s-deepest-
`darkest-secret-hidden-multitouch (discussing the ability of Google’s first Android
`smartphone, the T-Mobile G1, to detect multiple, simultaneous touches after code in the
`touchscreen’s software driver that had been “commented out” was re-enabled); see also Ryan
`Gardner, Proving the G1 Screen Can Handle Multi-Touch, RYEBRYE (Nov. 17, 2008),
`http://www.ryebrye.com/blog/2008/11/17/proving-the-g1-screen-can-handle-multi-touch.
`36 See Frederic Lardinois, Nexus One Gets Official Multitouch Support
`
`(Updated), READWRITEWEB (Feb. 2, 2010), http://www.readwriteweb.com/archives/nexus_one_
`
`
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`2013] SOFTWARE PATENTS AND/OR SOFTWARE DEVELOPMENT 937
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`Google’s Eric Schmidt was no longer on Apple’s board, Apple
`sued HTC before the ITC and federal district court in
`Delaware, alleging patent infringement.37 “Within days, Google
`rolled out a change in Android’s operating system: it would now
`support the pinch and stretch multitouch gestures that Jobs
`had demanded Google remove.”38 Google’s response to an
`inquiry from ReadWriteWeb invoked standards:
`
`Looking around the mobile industry, from Apple to Palm to HTC and
`Motorola—it’s clear that pinch-to-zoom technology has become a
`standard and popular way for users to interact with their mobile
`phones. Likewise, Android users can now truly benefit from this
`capability with the availability of Android 2.1, which powers a new
`class of devices with larger touchscreens and more interactive features.
`
`Despite the rationalizations of “increased processor power,” it
`appears that patent threats retarded the functionality of
`Android’s touch screen by almost two years.39
`Google is still feeling the impact of Apple’s patent claims
`in lawsuits against its Android partners.40 Larry Page himself
`emphasized the patent angle of its merger with Motorola on
`Google’s corporate blog:
`
`We recently explained how companies including Microsoft and Apple
`are banding together in anti-competitive patent attacks on Android.
`The U.S. Department of Justice had to intervene in the results of one
`recent patent auction to “protect competition and innovation in the
`open source software community” and it is currently looking into the
`results of the Nortel auction. Our acquisition of Motorola will
`increase competition by strengthening Google’s patent portfolio,
`
`
`
`gets_official_multitouch_support.php (“Oddly enough, Nexus One (and Motorola Droid)
`users outside of the U.S. have always been able to make use of these multitouch
`features by default.”).
`37 Complaint, Apple Inc. v. High Tech Computer Corp., Nos. 10-166-GMS, 10-
`
`167-GMS, 2011 WL 124446 (D. Del. Jan. 14, 2011) (No. 10CV00166), 2010 WL 976411
`(filed Mar. 2, 2010); Complaint, Apple Inc. et al v. High Tech Computer Corp., Nos.
`10166-GMS, 10-167-GMS, 2011 WL 124446 (D. Del. Jan. 14, 2011) (No. 10CV00167),
`2010 WL 711393 (filed Mar. 2, 2010).
`38 See LEVY, supra note 32, at 237.
`
`39 Jacqui Cheng, T-Mobile, Google Finally Unveil the First Android Phone,
`
`ARSTECHNICA (Sept. 23, 2008, 10:56 AM), http://arstechnica.com/gadgets/2008/09/t-
`mobile-google-finally-unveil-the-first-android-phone/.
`40 At least until the Motorola deal, Google did not make hardware, but
`
`developed the operating system and released it open source, as well as licensed
`applications for use by partners. Google depends on independent hardware vendors to
`make smartphones, which it may help support with marketing. Google does not charge
`for the operating system, but earns revenue by advertising to the people who use
`Google’s services on their phones. See Brian X. Chen & Claire Cain Miller, Android Is
`No. 1, But Google Says It Still Makes Little Money, N.Y. TIMES BITS BLOG (Jan. 20,
`2012, 6:13 PM), http://bits.blogs.nytimes.com/2012/01/20/android-small-revenues/.
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`which will enable us to better protect Android from anti-competitive
`threats from Microsoft, Apple and other companies.41
`
`Android users already faced disruption to their devices
`from several patent lawsuits, and after Google’s opponents
`purchased Nortel’s patent portfolio, Google and its Android
`partners (including HTC and Motorola) had reason to fear a
`deepening thicket. Without many patents of its own, Google
`could not have made the traditional counterstrike of suing its
`attackers for infringement.42 Motorola’s mobile portfolio (17,000
`issued patents and 7,500 pending applications) added to the
`Android’s arsenal.43
`Of course Motorola also makes hardware—smartphones
`that run Android—but few analysts emphasized that point.44
`There, the acquisition raises strategic questions for Google: Can
`it convincingly offer the Android platform to companies against
`whom it now competes? Even if Google maintains Motorola as a
`separate business, as Page says the company intends,45 will now-
`competing vendors such as HTC, Samsung, and Acer be
`reassured of Google+Motorola’s neutrality among them?
`Owning a handset maker could improve Android, if it
`shortens the feedback loop for problem-reporting and new
`ideas, but it could hurt the platform—and its end-users—even
`more by scaring off competing hardware vendors, which would
`shrink the base to which new applications are written and
`reduce the diversity of options available to end-users. As
`proprietor of an open, multi-sided market, Google needs to
`serve Android’s hardware vendors, app developers, and end-
`users well enough that a large enough group of each continue
`to bring it value while directing end-users to the ads whose sale
`puts money into Google’s pocket.
`The patent motivations are more straightforward in the
`Motorola purchase. It does not take deliberate copying to
`infringe a patent, and patents are granted on small enough
`
`
`41 Supercharging Android: Google to Acquire Motorola Mobility, GOOGLE:
`
`OFFICIAL BLOG (Aug. 15, 2011), http://googleblog.blogspot.com/2011/08/supercharging-
`android-google-to-acquire.html.
`42 Id.
`
`43 Stephen Shankland, Google’s Page Explains Motorola Acquisition, CNET
`
`(Aug.
`15,
`2011), http://news.cnet.com/8301-30685_3-20092367-264/googles-page-
`explains-motorola-acquisition/.
`44 Dan Rowinski, The New Motorola: Google’s Hardware Division Steps into
`
`the Future, READWRITEWEB (Sept. 6, 2012), http://www.readwriteweb.com/mobile/
`2012/09/the-new-motorola-googles-hardware-division-steps-into-the-future.php.
`45 Google to Acquire Motorola Mobility, GOOGLE INVESTOR RELATIONS (Aug.
`
`15, 2011), http://investor.google.com/releases/2011/0815.html.
`
`

`
`2013] SOFTWARE PATENTS AND/OR SOFTWARE DEVELOPMENT 939
`
`independently
`increments of software advances that an
`developed application may incorporate dozens to hundreds of
`elements on which others claim patents.46 At millions of dollars a
`lawsuit, it is expensive to disprove them.47 At least if those other
`innovators are also making phones or software, Google is now
`more likely to hold patents on what they are doing too, paving
`the way for a potential cross-license rather than a lawsuit.48
`Shouldn’t we be able to avoid those patent threats and
`cross-licensing transaction costs? As Google’s pre-Motorola
`travails showed, it is almost impossible to opt out of the patent
`system, even if one chooses to publish and not patent his or her
`inventions.49 By contrast, the copyright system permits one to
`share work under a permissive license such as a Creative
`Commons CC-BY,50 while defense against infringement requires
`only proof that one has never accessed another’s work.51 Patent
`instead puts the developer on the defensive: one can truly
`guarantee patent-safety only by ensuring that every bit of
`technology used was published more than seventeen to twenty
`years ago.52 Even then, the developer faces the threat of suit for
`infringing a non-obvious combination of the prior art.53
`Patent is dis-serving its purpose in this market. If a
`single device has 250,000 infringement opportunities,54 the
`
`
`46 Steve Lohr, A Patent War in Your Pocket, N.Y. TIMES, Aug. 25, 2012, at A4,
`
`available at http://www.nytimes.com/2012/08/26/technology/apple-samsung-case-shows-
`smartphone-as-lawsuit-magnet.html.
`47 See BARRY, supra note 15.
`
`48 Ted Sichelman & Stuart J.H. Graham, Patenting by Entrepreneurs: An
`
`Empirical Study, 17 MICH. TELECOMM. & TECH. L. REV. 111, 121 (2010).
`49 Timothy B. Lee, Top Judge: Ditching Software Patents a “Bad Solution,”
`
`ARSTECHNICA (May 13, 2012) (quoting Former Federal Circuit Judge Paul Michel, an
`expert in the field of intellectual property, as arguing that “software firms don’t have
`the option to opt out of the patent system”). Rare but perhaps not impossible: Richard
`Hipp of SQLite says he only uses twenty-year old, published algorithms to keep his
`code
`free of patent
`clouds. See
`Msg #00026, OSDIR.COM
`(Aug. 2009),
`http://osdir.com/ml/sqlite-dev/2009-08/msg00026.html (last visited Oct. 31, 2012).
`50 See CREATIVE COMMONS, http://creativecommons.org (last visited Oct. 31, 2012).
`
`51 See Baxter v. MCA, Inc., 812 F.2d 421, 423 (9th Cir. 1987) (“[A] plaintiff
`
`may establish [copyright infringement of software] by circumstantial evidence of: (1)
`defendant’s access to the copyrighted work prior to the creation of defendant’s work,
`and (2) substantial similarity of both general ideas and expression between the
`copyrighted work and the defendant’s work”).
`52 35 U.S.C.A. § 154(a)(2) & (c)(1) (West 2012).
`
`53 See supra note 30 (discussing the requirements for patentability).
`
`54 See Richard Waters, Patent Hunting is Latest Game in Tech Bubble
`
`Circuit, FIN. TIMES (Inside Business) (July 27, 2011, 7:37 PM), http://www.ft.com/cms/s/
`0/16025f76-b868-11e0-b62b-00144feabdc0.html#axzz25guuQvQz; Richard Waters, Tech
`Patent Arms War Reaches New Level of Intensity, FIN. TIMES, (Inside Business) (Mar. 30,
`2011, 5:50 PM), http://www.ft.com/intl/cms/s/0/b0da8540-5aea-11e0-a290-00144feab49a.html#
`axzz25guuQvQz.
`
`

`
`940
`
`BROOKLYN LAW REVIEW
`
`[Vol. 78:3
`
`system puts almost all the power on the side of those who
`would hold up, rather than advance, progress in the useful arts.55
`Apple, Google, HTC, and others in the smartphone market are
`making products in spite of, not because of, a patent system in
`which they are more or less unwilling participants.
`
`C.
`
`Is Apple’s Success Attributable to the Patent Incentive?
`
`No doubt the iPhone has been terrifically successful,
`and some of that success is likely due to its interface design.
`That does not, however, answer two important questions about
`the patent incentive: First, did the patent incentive spur the
`iPhone development, or would Apple and its investor