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Amazon's Patent Reform Proposal

Jeff's open letter to Amazon customers [ The letter is no longer available on amazon.com. ] about the patent issues is a great outcome for the discussion we started this past week. After all, if Time Magazine's Man of the Year says that the patent system has gotten out of hand, that may well have more impact on the powers that be than if 10,000 relatively anonymous programmers do so. So I'm really excited to participate with Jeff in his call for a closer look at how we can update the patent system for the Internet age. We're both complete beginners at getting the attention of Washington, and even if we were experts, there is no promise that we'll get results, but I do agree that the reforms that Jeff has suggested would be a great first step towards rethinking the system.

"Rethinking" is of course the key word. Jeff's suggestions are one way to address the problem. Others who know more about the patent system may have even better ideas. We must start by recognizing that we have a problem. Once we do that, we can engage technical, legal, and regulatory experts in an effort to solve that problem. As Jeff points out, that may well be a long process--but not one that is more difficult or more contentious than many of the technical infrastructure issues of the Internet that have been solved by groups such as the IETF or W3C.

I do want to commend Jeff for listening to his customers. He didn't just hide behind his lawyers, or a PR spokesperson, but engaged directly, demonstrating that he does understand the new rules of the Internet economy. I first spoke with him less than 36 hours after I posted my open letter, and we've spoken at least a half dozen times since. Many of those conversations have not been during traditional business hours--he's keeping hacker's hours, like many of the rest of us! He's read a lot of the commentary left on oreilly.com, as well as letters sent directly to Amazon. I can't imagine any other high profile CEO who would be as forthcoming.

While Jeff hasn't done what I originally asked for--to rescind his patent claims--he has most definitely engaged with the problems I was raising, thought seriously about them, and proposed an answer that works for him and his business.

That being said, I don't want to let Jeff entirely off the hook. One thing about a call for action in Washington is that it could be seen as just a way of shifting the focus away from Amazon and onto the PTO. I don't think that is what Jeff is trying to do--but one way to tell that for sure is by the amount of followup we see over the next few months. But in any event, it is most certainly true that the software patent problem is far larger than Amazon's patents. Large as they loom in e-commerce, Amazon is a very minor player in the patent game. Any solution that simply involves Amazon and does not spark larger reforms will be of little importance.

I also do want to point out that I've learned a lot about patents in the past ten days. In talking with Jeff about the details of his patents and why he thought they were original, I was struck by how different his sense of what he had "invented" was from the sense I got by reading the patents themselves, and from commentary I'd read on the net (including my own :-).

In the case of 1-click, the patent claims look to a casual reader as if they broadly cover the use of saved state to make it possible to conduct an e-commerce transaction without forcing the user to identify him or herself. In fact, they cover only the single "point and click" aspect, such that the sale is made without any confirmation step. In short, this patent is far more narrow than it might at first appear. And in fact, Amazon did an incredibly successful job of making 1-click an easy-to-use feature. Most examples of "prior art" that readers sent in to me had various confirmation steps, and were not "1-click" approaches with anything of the slickness that Amazon brought to the table. One e-commerce pioneer claimed that he'd tried a 1-click type of approach several years before Amazon, but had given it up because customers found it confusing. He admitted that the way Amazon implemented it was a significant advance over the way he'd done it. As Jeff has claimed, in hindsight it looks easier to get this right than it did at the time.

In the case of the Associates patent, what is being patented is not the broad idea of referral marketing, but instead a mechanism that allows individuals on the net to establish a little virtual bookstore on their site, with fulfillment by Amazon, entirely on their own, without having to negotiate a business deal with Amazon. In effect, Amazon created an API that allowed others to use Amazon as a service. This was in fact a really nice piece of engineering, and a foretaste of things to come as next-generation web sites start to publish XML-based APIs for content syndication or for business transactions. Jeff points out that at the time the Associates program was introduced, there was plenty of commentary by folks like Esther Dyson hailing it as a real innovation.

But the more I became convinced that Amazon's patents might actually hold more water as original inventions than I thought, the more I became convinced that they were still a bad idea.

I banged this drum fairly loudly in my original postings, so I won't repeat myself here. Instead, I'll quote Harvard Law school professor Lawrence Lessig, author of the recent bestseller Code and other Laws of Cyberspace.

In an April 1999 article in The Standard, Lessig wrote:

No doubt we are better off with a patent system than without one. Lots of research and invention wouldn't occur without the government's protection. But just because some protection is good, more isn't necessarily better. Especially in cyberspace.

There is growing skepticism among academics about whether such state-imposed monopolies help a rapidly evolving market such as the Internet. What is "novel," "nonobvious" or "useful" is hard enough to know in a relatively stable field. In a transforming market, it's nearly impossible...

"Bad patents" thus become the space debris of cyberspace. Nowhere is this clearer than in the context of business-method patents....

Awarding patents of that type siphons off resources from technologists to lawyers--from people making real products to people applying for regulatory privilege and protection. An increasingly significant cost of Net startups involves both defensive and offensive lawyering--making sure you don't "steal" someone else's "idea" and quickly claiming as yours every "idea" you can describe in a patent application.

But this is absurd. When the world was given TCP/IP and the collection of protocols it induced, a billion ideas became obvious to anyone who took the time to think. These were not ideas that were discovered because some lone inventor spent years toiling away in his basement, but because TCP/IP was a language with which practically anything could be done. And with very little promise of protection by government, lots was done. The Internet revolution was born long before lawyers arrived on the scene.

This last point is really key. We've got a good thing going. The free-wheeling development environment that has given us both the Internet and open source tools like Linux, Perl, Apache, MySql, Sendmail, and so on, has demonstrated convincingly that there is enormous power in an open, shared platform where ideas are given away as the foundation for further innovations. So far, entrepreneurs, stock market investors, and computer users have all benefited enormously from the open, non-proprietary approach historically used for developing internet technologies.

I highly recommend Lessig's entire article, as well as the more recent one that specifically addresses the Amazon patents and Richard Stallman's call for a boycott.

In this second article, Lessig wrote about the ever-more slippery slope of business method patents:

You don't have to be against all patents to believe that there is a reason to be concerned here. For contrary to the it's-all-OK-sayers, there is something new about patents in cyberspace. While the old problems with patents remain--for example, can the patent office keep up with the pace of change--there is a new kind of patent that is sweeping technologists in the Valley. Yet we know nothing about the effect this patent will have.

This is the "business method patent," discovered by a federal court in 1998. It gives the holder a monopoly over a way of doing business that gets instantiated in technology. That's troubling enough in real space, where not all ways of doing business can be expressed in technology. But in cyberspace, there is no limit to the potential of this sort of patent. Every method of doing business in cyberspace by definition is instantiated in technology--code. So every method in principle becomes subject to a patent.

This is a problem, because patents impose costs on the creative process, even if they also create benefits. They will move cyberspace from Nike-land ("Just do it") to lawyer-land ("Have you passed that by the lawyers"). And while these costs on balance might be worth it, there is no guarantee. It all depends. Thus, the question that any rational patent system must ask before it launches a new swarm of patents: whether the costs outweigh the benefits.

Congress has not asked this question. Instead, this new monster was called forth from an old statute, reinterpreted by the Federal Circuit. So before any policy analysis has been made, lawyers have been scurrying about the Valley signing up technologists for this dole of government-granted monopolies. And long before anyone in Washington gets around to thinking about the matter, cyberspace will have changed. Lawyers will be regulating the coders; innovation will proceed only as quickly as the licenses can be sold. If they are sold.

...The Net was not built on proprietary technologies; there is a good argument that this weed will choke innovation. But whether one believes that or not, Congress should address the matter -- with full hearings, and possibly new legislation (on this Stallman agrees). This central issue about the future of innovation should not be left to the innovation of lawyers....

That is a sentiment with which I believe most of the 10,000 people who replied to my original call to action, as well as the many hundreds of thousands who have discussed this issue on the net over the past week, would heartily agree.

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