Introduction
Patents are useful for protecting the rights of inventors and innovators who create new technology. The patents provide protection for the idea and in return, the new invention is available to the public for relevant use. The validity of a patent is twenty years. The downside is that no one else can come up with the same idea for those twenty years. Other inventors can use the invention in their products without modifying the base product with a license provided by the patent holder. For example, if an inventor creates a car that runs on water, it will prevent a different inventor to implement the new design for a fuel acquiring system that collects the water automatically from the atmosphere. While the water-fueled car will benefit the public, the lack of the fuel acquiring system for twenty years will drastically affect groundwater levels.
Patents for software create monopolies that prevent the development of similar interfaces for reduced costs. The cost of acquiring a software patent is expensive and tedious. However, once a company acquires it, the monopolistic reign of the software begins. During the late 1980s, there were several compatibility issues pertaining to software patents. Unlike other products or inventions, ideas for new software can contribute significantly towards simplifying human effort. Android operating systems for mobile phones allowed the cost of the instruments to drop since that technology was available as an open source program. The patents on software often make end-user experience undesirable. Software patenting is not widely acceptable anymore and copyright for software is in wider circulation due to cost-effectiveness (Stallman, “Software patents — Obstacles to software development”). This paper studies three software patents to gauge the pros and cons of software patenting.
GIF
CompuServe GIF, first released in 1987 reached the pinnacle among imaging file formats with the help of Lempel–Ziv–Welch (LZW) compression technology. The file size was small and easy to download when compared to the other formats. The file format, well known for animated files enhanced in a subsequent version in 1989. However, CompuServe was not aware of a patent on the LZW compression technology by Unisys at the time of GIFs introduction. It would take Unisys nearly five years to discover that the popular GIF format was using their patent technology. However, instead of suing CompuServe, Unisys provided it with a license in 1994. This license allowed Unisys to charge a moderate fee for browsers and any other software that used GIF.
The move was catastrophic for GIF when service providers chose to boycott the use of this file type and adopted the PNG format. Although the PNG format was better in terms of vector graphics, it did not match GIF for the animation or file size. In addition, PNG was incompatible with several graphic software at the time. It was also not compatible with certain browsers. Eventually, software developers came up with uncompressed versions of GIF that did not require stiff payments to Unisys for licensing. However, the patent for GIF expired worldwide in the mid-2000s and GIF is now free to use.
In this case, it is notable that a popular file format after succeeding in the market failed to capitalize when a license became mandatory. The boycott from developers and emergence of different file formats affect the end customers adversely. CompuServe did not know the patent for the technology. This suggests that they might have opted for a different compression technology or developed one in-house if they knew of the patent. The company surely lost out heavily especially when the sought after product faced boycott (Battilana, “The GIF Controversy: A Software Developer's Perspective”).
MP3
The MPEG-2 Audio Layer III or MP3 file format appeared on the scene in 1993. It is an audio file format ideally used for music files. MP3 gained widespread popularity among the masses especially among those who download music from the internet. Eventually, the MP3 player hit the market in the mid-1990s. However, this product was not from the patent owner and despite threats of legal consequence, a Southeast Asian company continued to sell them. This file format has a patent that makes it illusive to developers who might want to incorporate the technology in their software. The MP3 file format is also the most controversial of them all since it elevated music piracy.
Several websites started using the MP3 format to upload hundreds of thousands in copyrighted music tracks. The songs were available for instant download and with the file size of MP3, these websites gained supremacy; Napster and Rhapsody included. The Fraunhofer Institute holds the patent for MP3 and reeled in income to the tune of several million dollars in profit from licensing fees alone. The licensing did not sit well with software giant, Microsoft. Instead of paying a license fee, Microsoft decided not to use MP3 altogether from Windows Media Player. In addition, the licensing makes it difficult for Open Source Operating Systems like Ubuntu to incorporate MP3 into their players.
The patenting of the MP3 file format opened a Pandora’s Box for the music entertainment industry. The sales dropped in millions for music albums. In addition, the wide scale popularity influenced stakeholders to invest in licenses since there were no alternatives in the market. The monopoly continues since the MP3 patent is still valid in the United States. The patent for this file format created a monopoly. This is against the fair trade practices and the exploitation continues due to an existing patent (Bouvigne, “Patents and MP3”).
Yahoo! Search marketing
There are patents for search engines also and surprisingly, it is Yahoo! that holds it. The first company to apply for the search engine marketing technology was Overture. Yahoo! acquired this company in 2003. Yahoo! wasted no time in launching into patent infringement lawsuits with Google in addition to the lawsuit filed by Overture against FindWhat.com. The search engine optimization initially brought in significant success for Yahoo! through its newest acquisition at the time. However, apart from the patent, Overtures had a contract with an Adware company. This meant that the Yahoo! search engine users will find their listings in Gator and not Yahoo!
The problem turned complex when customers started receiving unsolicited software on their workstations. Eventually, Yahoo! was forced to develop the Yahoo Tool Bar utility and removed adware/spyware software from their interface altogether. Gator, the company that had the initial agreement with Overture moved out of the adware business altogether (Wall, “History of Search Engines: From 1945 to Google Today”). Yahoo! consolidated its hold over search engine optimization (SEO) by patenting over a dozen SEO-related applications. Today, it holds the finest internet search engine-marketing tool available in the market (Quinn, “Yahoo! Search Engine Optimization Patent Application”).
The obvious failure for Yahoo! is the lack of awareness in the business community towards the benefits of SEO tools. In comparison, Google Analytics, is more popular among developers and businesses. Despite patenting SEO enhancers, Yahoo! does not have the same demand as Google. They spent too much time and money on patenting while missing out a majority of services to its competition. Google on the other hand only holds a website design pattern for its search page. Its AdWords service provides similar service under a license from Yahoo!
Conclusion
The patents on software file formats and search engine optimizers are unnecessarily withholding key technology to users. In addition, the patent owners do not seem to hold the right cards despite spending a lot of money for exclusive rights. In all the three examples taken for the study, only one (MP3) made considerable profits. The phasing out of GIF and the relatively unknown facts about Yahoo! provide evidence that software patenting is not good for business. In addition, the fair practices in trade do not seem to apply for software and patents subvert smaller companies. The two recessions saw the closure of several software companies that were unable to handle the pressure. It is unclear how many of these companies chose to patent their products and vanished from the market altogether.
Software is unlike any other product in the world. There are new ideas for improvement that come out on a daily basis in blogs and open source websites. It is important to continue with development of file formats and tools without restrictions. The example of the GIF is important to understand why patents can harm development. The product was a high-flier. The consumers loved it and developers preferred it. A patent appears on the scene and the entire market for the product vanished. Irrespective of whether it is free now, the opportunity was lost. By the time the patent ended, Flash and other graphic formats were available (Krill, “Debating the pros and cons of software patents”).
Works Cited
Battilana, Michael C. ‘The GIF Controversy: A Software Developer's Perspective’. cloanto.com, 20 Jun. 2004. Web. Accessed on 4 Apr. 2016. https://cloanto.com/users/mcb/19950127giflzw.html
Bouvigne, Gabriel. ‘Patents and MP3’. Tech-mp3.org, N. p., 2002. Web. Accessed on 4 Apr. 2016.
Krill, Paul. ‘Debating the pros and cons of software patents’. infoworld.com, 17 Feb. 2011. Web. Accessed on 4 Apr. 2016.
Quinn, Gene. ‘Yahoo! Search Engine Optimization Patent Application’. Ipwatchdog.com, 6 Feb. 2009. Web. Accessed on 4 Apr. 2016.
Stallman, Richard. ‘Software patents — Obstacles to software development’. GNU.org, 18 Aug. 2015. Web. Accessed on 4 Apr. 2016.
Wall, Aaron. ‘History of Search Engines: From 1945 to Google Today’. searchenginehistory.com, N. p., 2015. Web. Accessed on 4 Apr. 2016.
