A lot has changed since the first U.S. patent and copyright laws were enacted in 1790. Are today's rewards commensurate with the benefits to society?

When IBM sued Amazon.com on Oct. 23, alleging that many of the online bookstore's features usurp IBM's patents, the target of the legal attack got surprisingly little sympathy from a group it might have expected would rush to its defense.

Members of the loose-knit coalition of computer programmers, tech entrepreneurs, law professors and civil libertarians known variously as the "open source," "free culture" or digital rights movement have long warned of the perils of increasingly aggressive enforcement of expanding intellectual property rights. They have often raised a ruckus over encroachments on what they perceive to be the public domain. But their initial response to Amazon's predicament was muted. The general consensus was summed up in a headline on an open-source Web forum which said the online retailing juggernaut was getting a "taste of its own medicine." Amazon, after all, had filed a controversial patent infringement suit of its own in 1999 against Barnes & Noble, claiming that its competitor's Web-based bookstore infringed on Amazon's patent for a "one-click checkout" feature.

IBM's claim against Amazon in a pair of lawsuits filed in federal courts in Texas is more audacious. Big Blue alleges that Amazon has infringed five of its patents for functions that are ubiquitous on the Internet, including "presenting advertising in an interactive service" and "ordering items using an electronic catalogue." And it isn't a minor transgression, in IBM's view. "We believe that Amazon's entire business model is built upon these patents and that damages could be substantial," company spokesman Scott Brooks said.

They may have little love lost for Amazon, but open source advocates are certainly worried about the implications of IBM's lawsuits. It marks a further escalation in what James Boyle, a professor at Duke Law School and the cofounder of the Center for the Study of the Public Domain, calls an "intellectual property rights arms-race," which is undermining the rationale for having patents and copyrights in the first place. They are supposed to protect the rights of both owners and users of inventions and artistic expressions. But owners have been the beneficiaries of the recent trends. As Boyle lamented in a law review article, intellectual property protection has "expanded exponentially in breadth, scope and term over the last 30 years," and in the process, "the fundamental principle of balance between the public domain and the realm of property seems to have been lost."

A long and venerated history

Created by one of the first acts of Congress in 1790, the patent and copyright systems aimed to maintain a rough balance by rewarding artists and inventors with government sanctioned monopolies, but for a limited period of time. Copyrights would last for 14 years with the possibility of a 14-year extension. Patent holders were given enforceable, exclusive rights for 14 years in return for filing an application with the U.S. Patent and Trademark Office disclosing exactly how the invention works, giving others a shot at improving on it and incorporating it into their own designs once the patent expires.

The patent sys-tem has been amended and reinterpreted in dozens of major court rulings and statutes since its inception. But it is as effective in fostering innovation as ever, insists Brigid Quinn, a spokeswoman for the U.S. Patent and Trademark Office.

The claim that innovation is squelched by overly aggressive patent enforcement is "hyperbole," Quinn asserts.  Currently 1.6 million active patents are in force, she noted, yet only about 2,000 patent infringement lawsuits are filed per year, and most are settled. That evidently hasn't stifled inventors. The number of U.S. patents granted has doubled since 1985 to 157,717, while the number of filings has surged more than three-fold during the same time period, hitting 417,508 in 2005.  "How can anyone say the patent system isn't working," Quinn says. "The United States is the most innovative nation in the world. Innovation is thriving."

Open Source advocates, on the other hand, see ominous signs in those same numbers.  The greater number of patents granted suggests to them that overwhelmed patent examiners are rubber stamping applications by the thousands without assuring that the inventions are non-obvious, novel and the other things they are supposed to be. The surge in patent filings reflects a scramble for ammunition to use against competitors in court.

Copyrights run wild

A similar worrisome trend has been unfolding in the realm of copyright, open source advocates assert. It is exemplified by the evolution of the Disney Corp. As Larry Lessig, a Stanford Law School professor who is the intellectual guru of the open source movement, has recounted in his lectures and writings, the entertainment titan, known for jealously guarding its own intellectual property rights, got its start in a dramatically different legal milieu. Company founder Walt Disney shamelessly borrowed from a Buster Keaton film called Steamboat Bill for his signature character Mickey Mouse, introduced in a 1928 parody cartoon entitled Steamboat Willie.

Disney could get away with that in those days because, as Lessig explained in a famous address at the 2002 Open Source Convention, "culture lived" in a "a lawyer-free zone," an "intellectual commons … where people could freely take and build."

Once Disney got established, it became a leading force for keeping culture out of the commons. In addition to aggressively attacking any perceived encroachment on its intellectual property rights, the company has swung its weight behind laws that have extended the term of copyrights 11 times in the last 40 years. "Every time Mickey is about to pass through the public domain, copyright terms are extended," said Lessig, who dubbed the latest such piece of legislation the Mickey Mouse Protection Act.

The perils of software patents

In patent law, the pronounced tilt in favor of owners' rights is exemplified by a series of court rulings beginning in the 1980s that first extended patent protection to computer software, setting the stage for the Amazon and IBM suits. That line of rulings culminated in a 1998 decision, State Street Bank & Trust Co. v. Signature Financial Group, Inc., which upheld a patent
on a computerized "business method." That, in turn, set off a scramble to lock up patents for doing all sorts of things on the Internet, followed by a hail of lawsuits over competing and disputed patent claims.

Companies filing patent enforcement actions, of course, insist that they have no intention of interfering with innovation. The targets of their suits aren't innovators, they're thieves, they say.

IBM, for one, was unapologetic about its suits against Amazon. "When someone takes our property, without our permission through a license, we have no option but to protect it through every means available to us," said John E. Kelly III, senior vice president of IBM Technology and Intellectual Property, in a statement announcing the suits. The online bookstore has "knowingly and unfairly exploited" intellectual property that "represents the work product of tens of thousands of scientists and engineers and billions of dollars of investment," Kelly said.

IBM spends $6 billion a year to advance the state of the art of computer science and has been awarded 40,000 patents worldwide for its efforts. That phenomenal engine of innovation could be stopped in its tracks if the company couldn't reap the financial rewards, IBM contends.

Boyle, however, believes that the "maximalist 'rights culture'," exemplified by software patent suits, is the true threat to innovation.  It is slowly but surely removing the building blocks for progress from the public domain. "The potential costs of this loss of balance are just as worrisome as the costs of piracy," Boyle contends.

About Mark Thompson

Mark Thompson is a Los Angeles-based freelance writer and author. He holds a law degree from Columbia University.