Oral arguments in the Bilski patent case were recently heard at the Supreme Court of the United States (SCOTUS).  The line of questioning from the justices suggests to me that they have an understanding of computers and software that could be very problematic for those of us designing software and trying to protect that intellectual property with patents.

Their understanding seems to go something like this.  1) You can’t patent ideas in the abstract, they must be embodied in some concrete form.  2) Software programs are embodied by running them on a computer.  3) But, since the computer is already capable of running the program, simply saying that you run the program using a computer doesn’t make it patentable, because what you’re really patenting is the abstract idea expressed in your software.  4) Abstract ideas are not patentable. Ergo, software is not patentable.

I think a re-framing of the computer/software relationship could help explain why it seems obvious to programmers that their work can be novel, non-obvious and useful (the tests for patentability).

Consider the analogy: a computer is like steel.  Many inventions are made of steel.  That is, steel is the medium in which the idea (say a uniquely shaped tiller blade) is expressed.  Steel is an expressive medium.  Now, SCOTUS has no problem upholding patents for ideas expressed in steel if they are novel non-obvious and useful.  That feels right.  SCOTUS also has no problem upholding patents for new methods of making steel, for alloys, for ways of hardening steel, etc.. That is ways of improving the expressive medium.  That also feels right.

The analogy I’d like to draw is that the computer is an expressive medium for software in the same way that steel is for tillers and many other useful things.  So, many inventions are made using steel as the expressive medium, and I would argue that many inventions are made using a computer (and display and inputs etc) as the expressive medium.  SCOTUS seems to be grappling with the idea that you don’t create a “special-purpose computer” to express a particular piece of software.  That, to me, would be like saying that a new tiller design would have to be expressed in a new alloy specially made for the purpose in order for it to be patentable.

When thought of this way you realize that the very purpose of a computer, that is, a device designed to be programmed to perform new functions, is as an expressive medium for software.  So, just like new alloys, new, faster, lighter, lower power computers are invented all the time.  You’ve improved the expressive medium, and it feels right that these inventions are deemed patentable.

Computers are “ductile” like steel, and creating software is analogous to hammering the computer (the expressive medium) into a functional shape.  You still need to ask if that shape is novel, non-obvious and useful just as you would when someone hammers a new tiller blade out of steel,  but the use of a computer as the expressive medium does not make all software the expression of an abstract idea.

The problem I believe we’re trying to solve is that in some (many?) cases simply claiming that simple (obvious, not-novel) ideas become patentable simply because they are expressed on a “machine” known as a computer.  These are the “trivial” software patents everyone decries. I’ll say two things about that.  First, if these ideas really are “trivial” then they should fail the novel, and non-obvious requirements.  No need to develop a new set of legal tests for that one.  And second (and with only a trace of sarcasm), the definition of a “trivial” patent is the one that you’re infringing. (i.e. I never write a trivial patent myself, but every patent that I infringe is a “trivial” patent that should never have been granted in the first place.)  Let’s not rewrite the patent law to handle cases that it is already equipped to deal with.  If the patent is truly “trivial” it should fall under the most basic test of patentability, novelty and non-obviousness, and if it’s not, then you should negotiate a royalty and get on with your business (it’s what you expect the licensees of your patents to do).

I am just coming back from a meeting of the MIT Enterrprie Forum SIG on digital media.  The session was on consumers social network, and an interesting discussion took place concerning ad-based revenue models in this space. The question was asked: “If your companies are so successful then why is an ad-based revenue model the kiss of death for investors?”

1) Mass-Marketing is Dead (and the internet killed it).

Part of the answer is that ad-based revenue models have been given a black eye by general audience sites that do not form a focussed user community.  In other words “mass marketing is dead.”  If you are serving banner ads to a mass consumption site then you have a very low likelihood of serving anything useful to any particular user.  Combine that with the fact that people will “turn-off” your ads by simply ignoring them and your actual conversion rate will be very low.  That’s why $/impression is usually so low for these sites.

Google gets around this problem (and achieves relatively high ad-rates, by focussing the ads based on the search terms.  Social sites provide an answer to this problem by creating a focussed audience.  If the ads can be tailored to that audience then ad-rates can be 10 times higher (according to the panel).

2) Facebook (yes, facebook).

The facebook problem is a question of what Hangout.com’s President and CEO Pano Anthos calls the “modality” of the site.  Why are people there? For facebook people are there to catch up with freinds not to buy things. Because of this re banner ads on facebook have a notoriously low CPM. Pano’s gave a hilarious analogy to men’s room advertising.  ”I’m just not there to buy things at that moment.”  So the modality of your site is important as it relates to what kinds of ads will work.  An example was given from the mobile platform mocospace.  People are on the site to interact with their friends much like facebook in the mobile setting.  In this context the best form of advertising is not to advertise products, but rather to inform users about brands.  Forget click-through, you just want to inform, and support the site and the environment where the users are spending their time.  So their most effective ads are album releases, movies etc, where they’re not expecting people to actually make a purchase, but just to become aware of the brand.

3) What kind of ads are they anyway?

Finally, there was the great point raised about click-through and click-to-purchase advertising on the web.  The largest and most well understood form of brand advertising occurs on television.  This is not a click-through or click-to-purchase medium and it has done quite well with advertising and vice-versa.  The same is true of print media.  The ads inform you of something, and that is their purpose, not to get you to make a purchase while you’re watching or reading.  The web need be no different.  In other words, everything old is new again.

The name of the game is creating an audience that will be receptive to the information in the ad, presenting information that the audience won’t immediately ignore.  The rest is old-school.  Everything old is new again.

We started writing “Friends” updates, and decided that blogging the progress of the project might be a good form of PathMaking in its own right (that is, until we change the world).

Dear Friends of MakeThePath (FoMTP):

I’m sending this update to keep you in the loop on the progress of the MakeThePath project. In spite of the economy (or perhaps because of it, see below), cool things are happening, and I see an increased interest in community-building projects like ours. Here’s what’s been up (in mini-blog form)

1) SBIR-grant

Just yesterday we submitted our SBIR (Small Business Innovation Research) grant application to the NSF’s Software Engineering division. If we are successful, the grant will provide funding for the first phase of project development and will get us to an alpha-testing stage (which I hope some of you will want to try). Grant writing is always a bit of a chore, but it turned out to be a useful exercise in refining the technical details for how the algorithms will actually work (the precise details didn’t exactly make their way into the proposal, of course). Naturally, we are working on the alpha-version while the NSF deliberates,

2) Investors’ Circle Conference

I attended the Fall conference of Investors’ Circle, a group of investors (including angels) in the socially responsible investing space and made some contacts that should prove useful for the project going forward. These investors face an interesting problem that was the topic of much discussion at the conference. The idea behind socially responsible investing is to maximize social returns as well as monetary returns. The problem is that monetary returns are simple to measure and compare between investments, whereas no standard exists for measuring social return. In the past, socially responsible funds have employed so-called “negative screens” to screen out businesses that were involved in gambling, producing weapons, cigarettes, alcohol, etc. However, the current phase of socially responsible investing is directed at funding companies that not only “do no harm,” but actually create social good. The tricky part is defining “social good,” and measuring it in a way that allows different investments to be compared. Several “ratings organizations” were in attendance, and you can already see a battle of social metrics brewing. It’s important, I think, because until investors can compare funds on some reasonable metric, they (we) will simply sort the choices by 5-year or 10-year returns, and choose on that basis.

A second theme that will be of more interest to the legally-minded among the FoMTP was a discussion of how fiduciary duty norms can inhibit directors from considering anything beside financial return in their role as directors. Socially responsible investors are in an interesting position since they may have a seat on the board, and are concerned about their duties under Revlon when it comes time for their exit (e.g. sale of the company). There is a group working on creating what they term the B-Corporation, which would be a legal entity somewhere between the traditional C-corporation and a non-profit. The idea is to structure the company as a C-corp from an ownership and tax standpoint, but allow the company to explicitly include in their charter and bylaws directives to the board and management to consider other forms of shareholder value in addition to economic return. Some states (including Massachusetts) already allow such considerations and the B-Corporation group is working to amend other state corporation laws (Delaware especially) to make such a structure possible. Green-Arrow is proud to be a Massachusetts corporation for just this reason (though we are aware that this will be a “challenge” down the road).

3) Are we out of our minds?

Finally, as the economy continues its slow melt, I have this motivational article from FoMTP Drew Fitzgerald. I may have been out of my mind for leaving my job just as this was all happening, but at least I’m in good company. Thanks Drew.

http://www.wired.com/culture/culturereviews/magazine/16-12/st_essay

Well, back to making the path, as we say around here.

Thanks for your support, and we look forward to getting something fun for your browser soon.

Best,

Scott