On 11/18/2010 04:21 PM, Adam Back wrote:
So a serious question: is there a software company friendly jurisdiction?
As weird as it sounds, it seems that most politicians seem to think of patents as being "business friendly" and lump them together under this nebulous concept of "intellectual property", which they consider to be a fundamental principle of our economy.
(Where software and algorithm patents do not exist under law?) If patent trolls can patent all sorts of wheels and abuse the US and other jurisdictions flawed patent system, maybe one can gain business advantage by incorporating a software company in a jurisdiction where you are immune to that.
If you sell into the US you can be sued for infringing US patents. If your customer uses your product and they sell into the US then they can be sued. Probably other ways you could be sued too. You'd have get an opinion from lawyers specializing in international IP, but they usually talk in terms of "minimizing risk" rather than "do this and you cannot be sued".
Big companies do such structuring games all the time for tax or other advantages. eg many of the big software companies IP is owned by an Irish subsidiary and then licensed back. Ireland has a special even lower than normal (normal is 12.5%) tax on IP licensing profits. Tada instant corp tax manipulation tool, even for US sales - adjust IP licensing fees such that retained profit in high tax country is close to zero.
Big companies address this problem by having a stockpile of patents themselves. Every large established tech company has a set of patents they can use against any other company in their industry. It's the game-theoretic equilibrium of mutual-assured destruction all over again, except this time it's lawyers rather than cockroaches that stand to inherit the aftermath.
Large established companies tend to benefit from this situation since it tends to put newer smaller companies at a huge disadvantage.
But the stability of this game breaks down when you have a patent holding company that doesn't actually ship any products. (I don't consider Certicom to be in this category.) They have nothing to lose. They are the equivalent of a non-state actor with small nuclear arsenal. They can cause you a world of pain and have no obvious home address at which you can retaliate. Thus IP holding companies are vilified as "trolls" by the established nuclear club, except when they are created by the companies themselves to manage a patent pool for some multi-vendor standard like HDTV or RFID.
Nobody understands this better than RIM (who now owns Certicom). They went through hell fighting some claims, even to the point of Blackberry service shutdowns because of it. Most likely, the Certicom patents were attractive to RIM who felt it needed to grow its arsenal.
So patents may add value to a tech company's balance sheet under "IP", but not in the sense that you're going to haul Sony into some Texas courthouse and have the judge order them to pay you license fees for every bluray they make. Sure it could happen, but it doesn't seem like a very wise fight to pick. We might expect different behavior now that RIM owns them.
Note that none of this has anything whatsoever to do with "promoting the progress of science and the useful arts".
But what's really sad is that this baloney has affected my ability to sit down and write a computer program that basically does pure math and give the resulting system away or use it to produce value.
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