Paul Graham - Essays

You rarely hear that kind of story in our world. The one example I've found is, embarrassingly enough, Yahoo, which filed a patent suit against a gaming startup called Xfire in 2005. Xfire doesn't seem to be a very big deal, and it's hard to say why Yahoo felt threatened. Xfire's VP of engineering had worked at Yahoo on similar stuff-- in fact, he was listed as an inventor on the patent Yahoo sued over-- so perhaps there was something personal about it. My guess is that someone at Yahoo goofed. At any rate they didn't pursue the suit very vigorously.

Why do patents play so small a role in software? I can think of three possible reasons.

One is that software is so complicated that patents by themselves are not worth very much. I may be maligning other fields here, but it seems that in most types of engineering you can hand the details of some new technique to a group of medium-high quality people and get the desired result. For example, if someone develops a new process for smelting ore that gets a better yield, and you assemble a team of qualified experts and tell them about it, they'll be able to get the same yield. This doesn't seem to work in software. Software is so subtle and unpredictable that "qualified experts" don't get you very far.

That's why we rarely hear phrases like "qualified expert" in the software business. What that level of ability can get you is, say, to make your software compatible with some other piece of software-- in eight months, at enormous cost. To do anything harder you need individual brilliance. If you assemble a team of qualified experts and tell them to make a new web-based email program, they'll get their asses kicked by a team of inspired nineteen year olds.

Experts can implement, but they can't design. Or rather, expertise in implementation is the only kind most people, including the experts themselves, can measure. [5]

But design is a definite skill. It's not just an airy intangible. Things always seem intangible when you don't understand them. Electricity seemed an airy intangible to most people in 1800. Who knew there was so much to know about it? So it is with design. Some people are good at it and some people are bad at it, and there's something very tangible they're good or bad at.

The reason design counts so much in software is probably that there are fewer constraints than on physical things. Building physical things is expensive and dangerous. The space of possible choices is smaller; you tend to have to work as part of a larger group; and you're subject to a lot of regulations. You don't have any of that if you and a couple friends decide to create a new web-based application.

Because there's so much scope for design in software, a successful application tends to be way more than the sum of its patents. What protects little companies from being copied by bigger competitors is not just their patents, but the thousand little things the big company will get wrong if they try.

The second reason patents don't count for much in our world is that startups rarely attack big companies head-on, the way Reveal did. In the software business, startups beat established companies by transcending them. Startups don't build desktop word processing programs to compete with Microsoft Word. [6] They build Writely. If this paradigm is crowded, just wait for the next one; they run pretty frequently on this route.

Fortunately for startups, big companies are extremely good at denial. If you take the trouble to attack them from an oblique angle, they'll meet you half-way and maneuver to keep you in their blind spot. To sue a startup would mean admitting it was dangerous, and that often means seeing something the big company doesn't want to see. IBM used to sue its mainframe competitors regularly, but they didn't bother much about the microcomputer industry because they didn't want to see the threat it posed. Companies building web based apps are similarly protected from Microsoft, which even now doesn't want to imagine a world in which Windows is irrelevant.

The third reason patents don't seem to matter very much in software is public opinion-- or rather, hacker opinion. In a recent interview, Steve Ballmer coyly left open the possibility of attacking Linux on patent grounds. But I doubt Microsoft would ever be so stupid. They'd face the mother of all boycotts. And not just from the technical community in general; a lot of their own people would rebel.

Good hackers care a lot about matters of principle, and they are highly mobile. If a company starts misbehaving, smart people won't work there. For some reason this seems to be more true in software than other businesses. I don't think it's because hackers have intrinsically higher principles so much as that their skills are easily transferrable. Perhaps we can split the difference and say that mobility gives hackers the luxury of being principled.

Google's "don't be evil" policy may for this reason be the most valuable thing they've discovered. It's very constraining in some ways. If Google does do something evil, they get doubly whacked for it: once for whatever they did, and again for hypocrisy. But I think it's worth it. It helps them to hire the best people, and it's better, even from a purely selfish point of view, to be constrained by principles than by stupidity.

(I wish someone would get this point across to the present administration.)

I'm not sure what the proportions are of the preceding three ingredients, but the custom among the big companies seems to be not to sue the small ones, and the startups are mostly too busy and too poor to sue one another. So despite the huge number of software patents there's not a lot of suing going on. With one exception: patent trolls.

Patent trolls are companies consisting mainly of lawyers whose whole business is to accumulate patents and threaten to sue companies who actually make things. Patent trolls, it seems safe to say, are evil. I feel a bit stupid saying that, because when you're saying something that Richard Stallman and Bill Gates would both agree with, you must be perilously close to tautologies.

The CEO of Forgent, one of the most notorious patent trolls, says that what his company does is "the American way." Actually that's not true. The American way is to make money by creating wealth, not by suing people. [7] What companies like Forgent do is actually the proto-industrial way. In the period just before the industrial revolution, some of the greatest fortunes in countries like England and France were made by courtiers who extracted some lucrative right from the crown-- like the right to collect taxes on the import of silk-- and then used this to squeeze money from the merchants in that business. So when people compare patent trolls to the mafia, they're more right than they know, because the mafia too are not merely bad, but bad specifically in the sense of being an obsolete business model.

Patent trolls seem to have caught big companies by surprise. In the last couple years they've extracted hundreds of millions of dollars from them. Patent trolls are hard to fight precisely because they create nothing. Big companies are safe from being sued by other big companies because they can threaten a counter-suit. But because patent trolls don't make anything, there's nothing they can be sued for. I predict this loophole will get closed fairly quickly, at least by legal standards. It's clearly an abuse of the system, and the victims are powerful. [8]

But evil as patent trolls are, I don't think they hamper innovation much. They don't sue till a startup has made money, and by that point the innovation that generated it has already happened. I can't think of a startup that avoided working on some problem because of patent trolls.

So much for hockey as the game is played now. What about the more theoretical question of whether hockey would be a better game without checking? Do patents encourage or discourage innovation?