The Impact of Patent Reform on Public Safety
OK… I’ll admit right off the bat that given the myriad of issues we face in public safety, patent reform does not bubble to the top of the to do list. Having said that, as a vendor, I find myself spending a lot of time thinking about intellectual property and over the past couple weeks patent reform has been a hot topic in the news. It also has big potential impacts on our industry.
Congress is debating the Patent Transparency and Improvements Act to reform parts of the patent process (http://techcrunch.com/2014/04/09/senate-patent-reform-bill-delayed-yet-again/) while the Supreme Court is taking up a case called Alice Corp v. CLS Bank. At first glance, you’d be hard pressed to see why any of this applies to a public safety practitioner, but the reality is that both the legislation reform and the court case could have far reaching effects on innovation in our industry and others.
At the core of the Supreme Court case is the fact that many technology patents are around ideas and processes, not physical machines. The court has previously ruled that “mental steps” are not patentable, but an innovative process to solve a real-world challenge that happens to have logical steps that are implemented by a machine is patentable. What does that mean practically? Every software patent issued over the past couple decades describes a real-world challenge and has a machine (computer) executing steps to solve that problem.
The cost of software development has dropped drastically over the past 10 years, but the true cost of innovation has not. Between open source libraries, powerful programming languages, off-shore development and new development tools it is possible to create applications faster than ever.
The cost today is not the “coding” but the workflow and design around what will be created. Innovative companies must spend significant effort and resources to identify the core issues the software should solve and how best to solve those issues. That takes time and effort. It’s not just about sitting down and writing software code. In fact, many studies show that developers actually only spend between 18 and 25% of their time actively “coding”, the rest is spent fixing bug/issues, collaborating around requirements, and designing how they’ll meet those requirements (and some admin time). Adding in product management and design specific roles, and you see that the investment in “mental steps” around any successful product is significant. I estimate Rave’s investment in design to be about 3 to 1 vs actual implementation.
So what does that mean for public safety?
The patent system is broken, and is creating perverse incentives around product development that in many ways discourage investment in innovation. Without innovation by vendors, the vision of NG9-1-1 and FirstNet will not be fully realized. For many, there is huge financial value in letting others take the risks in innovative research and then rapidly copying their approach.
Without proper protection for those willing to make that investment (which entails lots of trial and error), there is an incentive to wait and see what others do. Often this “fast follower” approach involves infringing on existing intellectual property with the full knowledge that it is not worth the effort of the “first mover” company to pursue the issue. For others, there is a financial model in attacking legitimate companies with a portfolio of only partially applicable patents. Often called patent trolls, these entities don’t have a vested interest in the success of an industry, and very often don’t have valid claims, but hope that legitimate vendors will pay them to stop impeding business.
I’m not sure how the Supreme Court will handle the current case, or how the legislation currently working its way through congress to reform the system will ultimately be implemented, but adding friction, risk and costs to a system does not result in a better or more cost effective solution. In fact, many would argue that the costs and complexity of our current system are biased towards larger firms.
On the flip side, a strong patent system that is effective in protecting intellectual property rights is a key underpinning of the successful innovation in an industry. One of the great virtues of capitalism is rewarding those that are willing to take risks and make bets on the future. For years, the U.S. patent system protected small innovative companies from being over-run by large pocketed rivals, and prevented incumbents who invest heavily in innovation from always having a less cost effective financial model. I’m hopeful we’ll come up with changes to the system that recognize the value of hard work and innovation to our industry, while also simplifying what can be an archaic and painful process.