Enterprise Software >> R&D

Why Bill Gates wants 3,000 new patents

Published: July 31, 2005, 8:15 AM PDT

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select cases.

Making the best possible argument for Microsoft's newly acquired passion for patents is a job that falls to Brad Smith, the company's senior vice president and general counsel. Last week, we discussed the changing legal landscape in the 1990s. Microsoft had not taken an interest in patents in its early years because, as Smith said, "We thought we could rely on copyright." The courts changed the rules, and Microsoft had to respond like everyone else.

Why did Microsoft increase its patent-application target so sharply just last year?

"We realized we were underpatenting," Smith explained. The company had seen studies showing that other information technology companies filed about two patents for every $1 million spent on research and development. If Microsoft was spending $6 billion to $7.5 billion annually on its R&D, it would need to file at least 3,000 applications to keep up with the Joneses.

That sounds perfectly innocuous. The really interesting comparisons, though, are found not among software companies, but between software companies and pharmaceutical companies. Pharma is lucky to land a single patent after placing a multihundred-million-dollar bet and waiting patiently 10 years for it to play out. Mark H. Webbink, the deputy general counsel of Red Hat, a Linux and open-source distributor, said it was ridiculous for a software company to grab identical protection for work entailing relatively minuscule investment and trivial claims. He said of current software patents, "To give 20 years of protection does not help innovation."

If Congress passed legislation that strengthened and expanded copyright protection to include design elements as well as software's source code, formalizing the way the courts interpreted the law in the 1970s, we could bring an end to software patents and this short, unhappy blip in our patent system's time line.

Eliminating software patents would give Microsoft another chance to repair its relationship with open-source users. Recently, the company has stooped to what can only be labeled fear-mongering, telling its customers who may be tempted to switch to open-source alternatives to think twice before leaving Microsoft's protective awning.

Last year at a public briefing, Kevin R. Johnson, Microsoft's group vice president for worldwide sales, spoke pointedly of "intellectual property risk" that corporate customers should take into account when comparing software vendors. On the one side, Microsoft has an overflowing war chest and bulging patent portfolio, ready to fight--or cross-license with--any plaintiff who accuses it of patent infringement. On the other are the open-source developers, without war chest, without patents of their own to use as bargaining chips and without the financial means to indemnify their customers.

What would Jefferson think if he were around to visit Microsoft's campus, seeing software patents stacked like pyramids of cannonballs?

Randall Stross is a historian and author based in Silicon Valley. E-mail: ddomain@nytimes.com.

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