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Simon Phipps

With a focus on open source and digital rights, Simon is a director of the UK's Open Rights Group and president of the Open Source Initiative. He is also managing director of UK consulting firm Meshed Insights Ltd.

Eolas Patent Failure A Hollow Victory

Software's most dangerous patent troll may have lost, but until software patents are impossible society has not won.

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There's no doubt it's a double delight to see an East Texas jury decide that the ridiculous software patent Eolas has been using to shake down the software industry for the last decade is invalid. So two cheers.

  • The first cheer is that even an East Texas jury - beloved of the world's venue-tourist patent trolls - decided what all of us have been saying for a decade is true and that there's substantial prior art.
  • The second, loud cheer, repeated with characteristic reserve by Sir Tim Berners-Lee, is because this pernicious threat to innovation and the Internet has probably been dispatched to the circle of hell it deserves.

But no third cheer because, all the same, it's a hollow victory. Despite the fact every technically-competent engineer on the Internet (including my colleagues at Sun who worked on the HotJava browser and were also pursued) could see the patent claim was specious, Eolas has still been able to spend more than a decade making huge sums of money simply by threatening people with enormously expensive litigation.

Microsoft - no stranger to patent shakedowns itself - managed to win a case against Eolas and was still forced to settle with them, and companies as diverse as Oracle (who quit the fight Sun had sustained against Eolas), Playboy and Office Depot have all decided it would be better to pay the Danegeld than to stand and fight. Even with an invalid patent, Eolas won big.

Failure Just A Cost Of Business

That's because probably none of their victims will be compensated, despite the obvious injustice. Eolas won't be punished; this failure will just be part of their cost of doing business. This is a great illustration why software patents are such a problem, such an obstacle to innovation, job and wealth creation and to the ultimate good of society for which patents were supposedly created.

Within certain bounds, there are no consequences for a patent troll of losing the gamble they take in attempting to shake down businesses. They can gather patents on obvious ideas, wait for someone else to make a successful product and business out of them and then - in a legal protection racket that would make the most successful mafiosi jealous - blackmail them into paying a percentage as protection money. If the victims defend themselves, they face costly and lengthy litigation which certain courts (see above) tend to find in favour of the patent holder despite the evidence.

Worse, they may face preliminary injunctions - court orders saying they can't continue shipping their product until the case is decided. This was the reason Sun Microsystems settled with Kodak for $92 million over a similarly ridiculous patent we knew was invalid. Kodak managed to persuade a jury that an injunction to stop distribution of Java was a reasonable thing to do while the crazy patent case dragged on. No wonder companies who know they could win in court still decide against trying even as hard as we did.

Hollow Victory

So this is a fine but hollow victory.

  • Eolas lives to fight another day and doesn't have to give Oracle or Microsoft or any other victim their money back.
  • The patent system remains intact, awaiting use for the next shakedown by the next monopolistic sophist.
  • The law still exists - in many countries, including in Europe - to create uncertainty and doubt about software patents that allows this dishonest behaviour to continue.You don't have to win in court; just make your victim believe it would be cheaper to settle.
  • The world's patent monopolists even hope, through ACTA and the laws it will induce globally, to make the game even more dangerous and profitable, while claiming it's about "rewarding innovation".

In a down market, the best way to make money seems to be to use the law to steal it from real innovators. The only people who really win here are the lawyers.


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