The European Patent Conference

Learning to Fly

In January 2007, I opened a conference with a short slide show entitled "The History of Flight (abbreviated)". Our hero watches birds flying high, and decides to imitate them. Strapping on a set of cardboard wings, he jumps off a small rock, but fails to achieve flight. So he climbs up a huge cliff and leaps off, reminding us of the joke where a man falling from a skyscraper says, "so far so good… so far so good."

The occasion was the launch of the European Patent Conference (EUPACO). In this article I'll explain why as president of the FFII (Foundation for a Free Information Infrastructure), I felt it necessary to launch this forum, what we expected to gain from it, how well it's worked so far, and what our plans are for the future.

The cartoon figure jumping off a cliff was meant to represent Europe, and the birds the USA. If the Lisbon Agenda means learning to fly, then Europe's imitation of US policy on patents (which can be simplified to "the more the better") is about as effective as jumping off a cliff, wearing cardboard wings. Not only is Europe's economy different from the US economy in key ways (like the linguistic diversity that keeps the economy much more reliant on tiny firms), but US patent policy is now widely accepted as flawed.

Europe's patent system has arguably not yet leapt of the cliff. But it seems close. The failure of the Community Patent, the growing tensions within the European Patent Organization, and the calls for a "final effort" to find a political solution, are to me clear signs of an impending crisis.

The Digital Revolution

Looking at the patent system and how it has evolved over the last decades, it seems that this crisis is being driven by two main factors: the Digital Revolution, which has changed all the rules, and Europe's tendency to follow the US to lead in the IP debate (as in many areas), so that European patent policy has until recently been developed by a small group of experts, based on incomplete data and little or no dialog with challenging opinions.

In the 19th century, the Industrial Revolution saw the birth of modern cities and global industry. At the start of the 21st century, the Digital Revolution sees the elimination of communication barriers, and the digitization of knowledge and art and commerce. Everything we know and do and a lot of what we make is becoming bits, and those bits get carried ever faster, in ever more volume, to ever more people.

Global society and economy can be seen as a massively-parallel problem-solving machine, and the Digital Revolution has super-charged that machine by many orders of magnitude. When I started my career in software in the mid-80's, the global community was connected by post, telex, fax, phone, and face to face contact: all costly and limited. Today we're connected by mobile phone, email, instant messaging, web, and wiki: cheap, widespread, and accessible to all. The result is chaotic, irreverent, and often stretches the limits of convention, but it is nonetheless a Revolution.

William Gibson said that the future is already here, it's just unevenly distributed. The avant-garde of the Digital Revolution is the online team, which comes together for profit or fun, works rapidly and cheaply and competitively, and runs circles around more established organizational models. Today I can start a new business, register a domain name, create a web site and pull together a team of self-employed sub-contractors, in a day, for less than a thousand euro, and without leaving my seat. Traditionally I'd need capital, a notary, legal advice, an office, full time administrator, trademarks, employment contracts, HR staff: it would take months and cost hundreds of thousands of euro.

The patent system, designed for the days before this cacophony, has found itself forced to adapt, yet barely able to keep up. The expansion of the patent system into the digital domain in the late 1990's was both inevitable and highly risky. It was inevitable because major industrial patent holders saw their processes become digitized, in the form of software, and made the obvious and logical decision to seek patents on their new digital assets. But then the patents themselves became the products, asserting themselves no longer against tangible products, but against the intangible fabric of the digital ecosystem.

The balance between patents and products that worked in classic industries did not translate well to the software industry.

The online avant-garde, especially in the software sector, began to see the patent system as a threat. This perception was reinforced by the behavior of specific large software firms, who saw patenting as a way to stop the commoditization of their key markets. Patents became weapons stockpiled in an arms race typified by two large and opposing patent pools: Intellectual Ventures (IV), a secretive firm that is widely-believed to be funded by Microsoft to combat open source, and the Open Invention Network (OIN), funded by Microsoft's main competitors to defend open source. Patents as weapons of "mutually-assured destruction" promotes no progress, no innovation, no new markets. But it does make many people angry.

In the US, the patent system's move into digital assets happened early, before the Digital Revolution got up to speed, and despite complaints from the early online avant-garde, became an accepted wisdom of business life. There was, it seemed at the time, a plausible balance. In post-Millennium Europe, the online avant-garde was forewarned, forearmed, and aggressively challenged the accepted wisdom, culminating in a major confrontation between those who supported a US-style move into digital assets, and those who considered this move to be unsafe and unnecessary. The 2005 EU directive that would have either allowed, or banned, patents on software, was abandoned in its second reading, a singular event, and the online avant-garde - banding together as the "FFII" - became a small but significant political force, for the first time.

The sensitivity and polarization of the issue is extraordinary. The FFII demands "no software patents". The EPO denies that it grants software patents at all. Brussels maneuvers to get control over the patent system. Munich lobbies to keep its independence. National patent offices argue with the EPO over revenues. Non-EU states try to kill EU initiatives like the Community Patent that would cost them patent revenues:. Large software firms still see software patents as a key tool for controlling their markets, and small firms still see them as a sword to the throat. In the US, the pharmaceutical industry glowers across the table from the IT sector, taking opposite sides in the patent reform debate. Globally, the USA, Europe, and Japan have abandoned talks with the rest of the world, while Brazil, India, and China start to flex their muscles and wonder, "what kind of patent system would WE like?"

How the FFII thinks

In "The Wisdom of Crowds" (Doubleday, 2004), 'New Yorker' business columnist James Surowiecki wrote: "under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them". If four basic conditions are met, a collective intelligence will produce better outcomes than a small group of experts, even if members of the crowd don't know all the facts or choose, individually, to act irrationally. Surowiecki's "wise crowds" need four things: diversity of opinion, independence of members from one another, decentralization, and good ways to aggregate opinions. The diversity brings in different information; independence keeps people from being swayed by a single opinion leader; people's errors balance each other out; and aggregation ensures that the results are "smarter" than if a single expert had been in charge.

Surowiecki could have been describing the FFII, and indeed much of the online avant-garde. The FFII is different from most players in the IP debate. We are a grassroots organization, a crowd of crowds. Our teams construct themselves around issues, work pro-bono, and are fiercely independent. There is a small core of professionals who look after infrastructure, and a board that acts as referee and patron. In terms of reaching people, the model works. In a recent petition on an ISO standardization issue, we got 14,000 signatures in two weeks. In terms of producing the "right answers", only history will tell, but my feeling is that Surowiecki got it right.

In 2005, I took over the presidency of this organization, akin to being given "charge" of a field full of cats. My main credentials, as far as I could tell, were that I was able to give a good speech, and had a reputation for giving good parties.

Looking at the European patent debate in late 2006, I was struck the clash of cultures. On the one hand, we had the patent establishment, which broke all Surowiecki's rules. Too little diversity, independence, or decentralization of opinion. Looking at those promoting US-style centralization of the patent system, I saw patent holders and their lawyers, the patent administrations, and Brussels policy makers. Looking at their opponents, I saw an online avant-garde community centered around the FFII, but increasingly also supported by IT-sector patent holders who were worried about the US situation and wanted to avoid the same scenarios in Europe.

If Surowiecki is right, and wise crowds like the FFII can find the "right" answers where an establishment of experts cannot, the outcome would be increasing polarization and tension between the patent establishment and the online avant-garde. This seemed to me dangerous, counter-productive, and probably unnecessary. As a scientist, I believe there are such things as "right answers", and the correct way to spread these is communication, not confrontation.

Software is the key

The basic principles of the patent system should in theory be compatible with the Digital Revolution. Disclosure in exchange for protection from commercial copying should work as well for designs (I don't like describing the recipes that let us make software as 'inventions' or 'ideas', both these terms are dangerously inaccurate) as it has worked for source code. The Digital Revolution runs on software, of course. But the software industry is inefficient, each generation reinventing huge domains, mainly due to ignorance. True progress happens slowly, beneath the superficial impression of rapid change. What if the patent system could become an instrument for recording the many valuable designs that sit in our software systems, and do this in a way that both helps the designers, and their peers?

Copyright and trademark law have found their place in the Digital Revolution. So why not patent law? This is the multi-trillion dollar question.

If we can solve the question of how to update patent law for the Digital Revolution, we will, in my belief, have solved much of the question of how to design the digital property systems we'll need for the next hundred years.

The question of how to adapt patent law for the Digital Revolution seems too large for the FFII. (The question of how to redesign the full range of digital property systems is even vaster, but one must start somewhere.) Our best answers to date have still excluded the patent system from any role in the Digital Revolution, on the (so far accurate) basis that no role is better than a destructive role.

I wondered if it was possible to build a "wise crowd" that included more diverse opinion. Could we reproduce the FFII's intellectual successes on a wider scale? We'd need diversity, independence, decentralization, and aggregation. That seemed feasible. At the very least, we needed input from large firms, not just the online avant-garde businesses who's opinions we easily represent. But also input from academia, policy makers, institutions, and from other countries. Independence, so no single source of funding. And then aggregation, through conferences, email lists, and web sites. One of my ventures is a communications platform built for the online avant-garde (Wikidot.com) and this seemed the perfect aggregation tool.

The EUPACO project

Building a Surowieckian crowd is a bit like organizing a large party. People may be hostile to the idea at first, but they rapidly get into the mood when they have a drink or two, and get into the music. EUPACO faced hostility from the EPO, from online commentators, and even from people in the FFII. Industry and academia seemed to welcome the chance to discuss.

EUPACO-1 was a simple affair, a test of the concept, eight speakers from various backgrounds, a good mix of industry, academia, IP specialists, and activists. Everyone seemed to find it useful. Three months later we ran the first major event, EUPACO-2, bringing thirty-five speakers to explain their views on the patent system.

It is difficult to capture the exhilaration of listening to a wide range of expert speakers, many of whom are passionate, angry, and eloquent about their subject. Most people who came to EUPACO-2 felt they were taking part in something new and unusual.

We certainly had diversity of opinion, ranging from "Basel 2 will pop the patent bubble in sevens months from now", to "the patent system will lose credibility and be abandoned in fifteen years", "the European patent system works well", "Software is not patentable in Europe", and everything in between.

EUPACO-2 raised more questions than it answered. After the conference I noted some of the questions that had been raised: "Does the patent system produce the benefits it claims? How much does it cost society? Does the EPO deliver high-quality patents, or low-quality patents? Can the quality problems be fixed, and if so, how? Is the 'one size fits all' model working, given the huge disparities between different sectors, and between small and large businesses in the same sector? Are there plausible alternatives? Do we need to trim back the patent system first, and then introduce alternatives, or can competition to classic patents fix things?"

Everyone who went to EUPACO-2 took home a different lesson. Personally I was struck simply by how many diverse people wanted to come from afar and speak.

US Federal Trade Commissioner Bill Kovacic ended the conference with a hair-raising attack on the isolation of many policy makers but the EU Commission, Parliament and EPO were well represented, and I believe they found the presentations and discussion useful.

Let me answer some key question about EUPACO.

First, funding. Who pays? Up to now, it's been a handful of software firms and organizations, who are listed on the EUPACO site. The software business is perhaps most driven to solve what it sees as a defining issue. The rest comes from participation fees. The FFII launched the process but did not fund it after EUPACO-0, the seed event.

Second, authority. Who controls EUPACO? Currently, it's my project and I've been protective of it. The crowd needs time and space to assemble. Some in the FFII were hostile to the idea of creating a forum to explore new ideas - after all, the FFII has developed mature and powerful policies over the last seven or eight years. After EUPACO-2, all participants were satisfied that this was a route worth exploring, and authority becomes less relevant as the crowd gets more confident.

Third, organization. Who defines the program and runs the events? For EUPACO-2, the Program Committee consisted of Brian Kahin, Ron Marchant, some of our partners, and myself. A Brussels-based FFII daughter organization, Esoma, ran the event. We're keeping the same structures to plan and organize future events.

The view from the trenches

I've tried to explain the need for EUPACO from the larger perspective. But why should someone like myself spend time on this? There are no paychecks, all the work spent on building the program, liaising with speakers, and organizing the events is pro-bono.

My firm, iMatix, has experience with the patent system: a few years ago we developed a platform for self-service mobile applications. It was a great deal of work, and costly. During roll-out, we were confronted by a litigious firm that claimed a patent on a small but necessary part of the overall design. We tried to build an alliance of other affected firms, to oppose the patent. This failed. The patent holder began to threaten customers with litigation. We finally withdrew the product; legal costs would have ruined us.

Today, my firm is involved in the development of a new high-speed messaging standard (AMQP) which will be a big hit in the financial sector. We're making exciting products, and constructing new business lines to take advantage of the opportunities that will come from the commoditization of enterprise messaging.

And yet this whole investment - by many firms, not just iMatix - is vulnerable to exactly the same patent pitfall that cost us so much before.

It's unlikely that the vexatious impact of patents on the software industry (and all those industries that depend on ever-cheaper software technology) will be solved soon, but if EUPACO can help speed this process up by even a day, it's worth doing.

I've hinted that I believe there are ways in which the patent system could help, not hinder, the Digital Revolution. I can summarize my view on this, as a small-scale entrepreneur who believes in free markets and competition: patent law needs to deliver precise, cheap, fast, and safe rights. It should be possible to protect a non-trivial design from commercial imitation, just as copyright protects the expression of that design. This protection should be available over-the-counter, very cheaply, and immediately. It should last only as long as needed. Independent re-invention should be allowed, just as it is for copyright. Lastly, I don't want litigation to be part of the process, anymore than it is for other rights. Litigation should be extraordinarily rare.

However, my views don't need to be consistent, worthy, or treated with any respect, The beauty of the Surowieckian crowd is that individuals don't count very much: I can be totally wrong, it does not make my contribution less valuable.

The future of EUPACO

Organizing large conferences is either a lot of work, or very costly. We can hope to run a major event once a year. Between conferences, we continue to stimulate dialog and aggregate opinion through smaller events, such as the event run at the European Parliament in Strasbourg last month. We will hold smaller workshops during the third quarter of 2007, and start with seed events in other cities across Europe, since national influence on the patent system is a large part of the equation.

EUPACO is not the only crowd discussing the patent system. IBM's Inventor's Forum has been collecting diverse opinions via its wiki site. The EPO's Scenarios project has done a similar job of asking diverse experts to act as devil's advocates and challenge the conventional wisdoms. And we have EPIP, the European Policy for Intellectual Property, which describes itself as "an international, independent, interdisciplinary, non-profit association of researchers".

It's too early to analyze these projects, and unclear to what extent they are "wise crowds", but we're clearly seeing the European patent reform debate expand, and that is a good thing.

My hope for the European Patent Conference is that it can bring together all participants in the discussion, even as this discussion expands to bring more and more groups into active debate.

The EUPACO website is www.eupaco.org.

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