IP Forum Ric Richardson
Given my background, I could be a pin-up boy for IP Australia or the U.S. Patents and Trade Marks Office (PTO) because, you know, here is some success, someone's went to the trouble of filing a patent and in the end he won out because Microsoft had to come in and become our customer, through the force of the patent system. But in the end, I'm also a businessman, I love coming out with great ideas and I love the fact that there are vehicles out there to protect my interest, enable me to participate when the majority of the work is being done by corporations or other people with large resources to make my project work really quickly.
In the software business, you've got this growing presence which is open source which is actually protected; it is actually a protected resource because you're protecting yourself away with copyright in that situation. Everybody realizes that so in that situation you're allowed to use the software as long as you use it as it is, or you contribute to it, but you make it available for everybody else to use in the community. So, you know, when you say open source is free software, it's not free software. And theoretically you could do the same with a patent. You could actually file a patent and say, "Okay, I want for people to be able to use this patent under these circumstances as long as they don't, you know, if they start making billions of dollars out of this, they should start paying a royalty. But everybody that's using it for small to mid-size applications, they can be free." Agreed? Everybody think that's a reasonable approach to take? Alright, well that's good. Any dissenters from that? Any dissenters? Oh, so we've got clarification on that.
Okay, so what I'd like to ask now is, what is a software patent? By definition, what is a software patent? I know the term that I came up for it. Would anybody like to have a shot at it? Come on someone, someone be gutsy and stick their hand up and save me here. No? Oh, chickens (laughs). Alright, well from what I understand, a software patent is a patent that is a process or system that will only work on one CPU as basically one algorithm, because in reality the patent system around the world has agreed that you can't patent an algorithm. So, E=mc2 is unpatentable. You know, A+B=C is unpatentable. But if you put that process on a computer that talks to another computer that has another process and the two together actually start to work in a system, then it becomes more of, of what you would call a traditional, a mechanical, operational system. So you get that from, in my thinking, from the way I understand it, an algorithm is not patentable, but as soon as you start introducing these other components it becomes less and less what we're talking about by definition.
So, for example when Jim Fitzsimons, my very good friend who suggested that I go and get a patent, he says that Uniloc, my first patent, was a software patent, I agree with him in generalization. But in reality it is not a software patent because my patent actually says, here's a serial number, it gets put on this computer, it checks across a physical connection over the internet to another computer to see if that serial number is legit or not or that it's been used before. If it hasn't been then this computer goes out to physical devices, finds out information about those physical devices, makes a finger print from that information and then sends it back over to the home computer to link that serial number to that specific finger print of hardware and then send back an unlock code that enables them to use that software only on that machine. That's what I invented.
When I first invented it, it was to enable people to share software freely in a demo mode. So, I actually started try and buy software, but activation is what everybody's ended up using it for, although try and buy, it covers try and buy as well. So that's really what I invented and yet technically it's not a software algorithm. It actually involves mechanical processes, components, physical components, multiple computers. So, technically, even though it involves software, it is not a software only patent.
So, I just want to make sure that that was clarified because it has a large bearing on, first of all, this misnomer that people have about the unfairness of having a patent, having a software patent. Because everything is digital these days, even processes, that used to be mechanical if you had a business process in the past, now, frequently it's a software process that includes humans that interact at various times. But basically if you say there is no such, there is no room for software patent, then you're really, it's really open slather for anybody who could just go faster than the next person.
The other thing that has become clear to me as an inventor is that there's really only two parts to success with any kind of new technology or concept. One concept, one approach which is, a good friend of mine Matt Barrie who runs freelancer, he is a really incredibly fast moving entrepreneur, he thinks quick, moves quick, goes after opportunities like a bull out of the gate and he's, he's a scary guy to me. You know, he is one of those type, and he just looks me straight in the face and just says, "Look Ric, if you can't go as fast as the next man, then, you know, that's, your fair game, because the market will demand who will follow who by who moves the fastest."
But the other approach to that is, "Hey I'm an inventor. I am not an entrepreneur, I am not, you know, I do not know how to build a team really quickly and how to get markets to move in to adopt my product. So all I can do is go to a government and say, "Can you give me some protection to enable me to, to even have a go at trying to make some money out of my invention?" Because otherwise, somebody will just come along and say, "Ric, you've got a great idea!", "Fantastic Ric! How does it work?" "Oh that's great! Oh we might, we might send you a couple of bucks in a few years, you know, thanks very much for your time." You know, we have no control over that and no one who's a fair thinker, thinks that is the right way to treat somebody who's honestly come up with a good idea.
So, looking back at that whole process, I am so grateful for the patent, for the provision of the patent system. And before I get into anything else, I just wanted to share with you something that happened to me when we were doing the re-examine of the Uniloc patent. The Microsoft team asked the US Patent office, too, for re-examination of the Uniloc Patent and usually these examiners who, who sit in and listen to our case in the re-exam, they sit talking to a table load of, of lawyers, but in this case they got me to fly to Washington and I got to sit in the room. And what was really surprising is that, as soon as I came into the room, the examiners warmed to the fact that here was an actual inventor, one of that rare breed that actually has invented something and his name is on the top of the patent and they're actually going to get to meet him; which is sad because, you know, examiners these days are dealing with lawyers or they're dealing with paper work or somebody representing you as the inventor over the phone or over the internet.
So, and that's interesting, I, just to show that I am very pro-patent, they asked me for an opening statement and I said, the first thing I said, "Do you need an interpreter?", with an Australian accent. And then, at that lawyers were all looking in their papers, "Where's this, where's this, what's he doing? Where do you, what's he mean to say that? And you know the examiners kind of took about ten seconds to work out and they just started laughing and then after that they said, "Mr. Richardson, do you have an opening statement?" And I said, "Well after myself and my family who contributed to the resources that were needed to file the patent, the next biggest investor, I thought, was the US people -- the people of the United States." And they said, "Really?" And I said "Yeah, because I know that the $1500 filling fee, or whatever we paid, didn't cover the time that was put in by the examiner at that time, to check whether I legitimately did have a legitimate idea or not. And had checked for prior art and checked that I wasn't taking someone else's idea. And when they gave me that certificate, it was a real privilege. And I felt like it was an investment."
And that turned out to be a really good thing to say to examiners, especially when they were being asked to question one of their fellow examiners who made the decision back in, you know, '93, '94. So, you know, looking at it from that perspective, I hope you see me as an inventor, one of the guys that is the patent system was set up for. Guys like me and Edison and all the other greats that we all know and all the little guys in between like me who had a great idea and could be so easily run over by people with more money or resources.
So now we're getting into the section where we kind of, where I'm talking about what patents mean to me as an inventor today. And that is that the reality is, that big corporations are using patents like trading cards you know, you have this, I have that, we have disagreement, we'll trade and in the end we'll work out what the difference is and pay each other out, based on that process. I personally don't see a lot of small guys getting crushed by big guys because in the end if you do have a patent that protects what you're doing, they actually value that. And it's part of your whole acquisition strategy. And so, rather than say, hey, big guys with patents are abusing you, if you actually have something that's unique and you stop and say, "Okay has now anyone done this? Yes? No? No one's done this?" Protect it and it actually makes you a target for them, a target in value rather than a target to be squashed.
If you have enough market presence that your product is of interest to anybody in the large scale, then you can't but be in the best position possible if you have a patent. And to me there's these two type of patents like, I looked very closely at the Lemoxin model. I don't know if you know who Lemoxin is but he is famous. His foundation is famous for having a very large claim structures, it cost you 20 grand to just work out whether you're infringing or not. You know, it is so complicated. And so, that model is great if you're basically trolling where you go out and get all these small infringers and you're only asking for $20,000 for the license anyway so, so that's why spend $20,000 just working out whether they are infringing or not or pay $20,000 for the license. And to many, the patents are very hard to understand.
On the reverse, when I write patents, I don't want to make them a work of art. I just want to very simply state that my idea, state the kind that says my idea is unique, these are the things that I think are unique about it. I have done a prior art search, I might have even paid for a prior art search and then I'll file a provisional based on that. And then if I survive the first 12 months and the thing is being taken seriously by the people, I will go through the filing process and find someone like Peter to cover my backside and have a really good prior out search done and go through the whole process.
So, so with that in mind, I am, I actually, when you look at the software, the software and copyright issue as against patent and software issue, a lot of people, I think there is a misnomer there that copyright, open source is very egalitarian and patent and software is not. It's a bunch of people going after money, greedily going after money. But I actually will make my patents public domain if not going to engage in a large scale business that I'm not going to legitimately try and have a go at the product. I am not going to sit around filing patents on the hope that somebody is going to use this in the future and I can pull some money out of them.
And that is not what I did with Microsoft data, you know I actually had a multi-million dollar business going in the states and eventually did a lot of business. We were on the cover page for family PC magazine. We were on the, you probably would have seen our software on the front covers of magazines here on Australia. We actually had a big going concern, so, you know, we're not, even though a lot of people just spell out the name, you know, patent troll, I was never in that category. And in fact that is what made us find an agreeable path with our new customer, Microsoft.
So with that in mind, I'd like to confess that I actually do use open source software. I do, I find it complicating though, in that if I want to add to that software, I actually have to have a divide between what I am trying to do, that's, I want to keep proprietary and what is, it is open source. Whereas, if I could license a patent to do specifically what I wanted to do and then be free to use that code in any way that I want, then, you know, you've got a lot more freedom. And I'd suggest to you that the whole problem that people have with software and open source can be addressed in the patent situation as long as the people that have done the software related patents are fair in the way that they licensed it.
You know, one of the situations that really highlighted this problem for me is that I was into for a time there, I was trying to solve the problem with backup batteries and I was actually in the process of selling a hot swappable backup power system to HP. It's something that I invented the ability to plug as backup battery into the computer pull the existing battery in, put the other battery into the computer without the computer being shut down. During that process, I worked; wanted to it with Apple computers but they have this magnetic connector. You know what I'm talking about -- the magnetic connector? So to actually do the test, I had to buy an Apple power adaptor and cut if off and reconnect my outside battery to that, to that process.
Because Apple even though they don't participate in secondary power supplies, they ferociously stop anybody else from doing that. And I felt then the other side of the equation where, goodness me, they are not going to compete in this space, but they won't letting anybody else compete in this space? And I actually suggested to the examiners that I was talking to at the US Patent and Trade Marks Office, actually said to them, you know the problem with the patent office, the patent system is that if the person needs to be protected to be able to run their own business out. But if they are not in this business, or this business, or this business, then people should have a standard way of knowing how much they should pay if they want to use these patent in these ways. They should be allowed to do that.
And I just felt that there was something missing there because I get, I get infringed or I get impacted and restricted by the patents system too. So even though, I agree to be the poster boy for the US PTO and IP Australia, I do share that concern about software. There should be something like, about patents. There should be something like the ability to know that you pay 8% of your sale price or 3% or something like that as a royalty to the patent owner for your application as long as it doesn't compete with what they are actually doing. Something fair like that, that's the Australian side of me. The inventor side of me says, "Hey I need to get protection here for something that I came up with." So anyway, hope I haven't ragged on too much, and I hope that I shared some insight from my side of the story as an inventor.
Thanks for your time.Last Updated: 15/9/2012
