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The cost of software patents


One prominent form of patent abuse is “submarine patents” – patents which lie dormant until someone discovers their similarity to a popular technology. The patent on the GIF image format surfaced a decade after its widespread adoption on the web. The Eolas patent on web browser plug-ins cost Microsoft $521 million and forced tens of millions of web pages to be crippled or redesigned. The RIM patent cost Blackberry $612.5 million and nearly shut down service to millions of people despite the patent itself being invalidated.


Software patents are becoming a major threat to the software industry. The risk of software patent lawsuits forces software companies to obtain defensive patents in order to obtain cross-licensing agreements and discourage patent lawsuits through the threat of counter- suits. An entire industry of patent trolls extorts businesses with bogus patents by taking advantage of the fact that many businesses prefer to pay licensing fees than go to court.


The problem of software patent enforcement


A software algorithm is an abstract description of a general way to solve a problem, such as a mathematical formula. Many algorithms are popular because programmers have found them to be useful in different fields. Algorithms, such as sorting lists and organizing shopping carts are widely recognized as non-patentable. But how can one distinguish obvious ideas from patentable ones? Does the application of an existing algorithm to a new field deserve a patent?


Software patents cripple software development


Software patents make software development risky because it is so difficult to know whether an idea has been implemented before. Over the years, millions of software programs have been written using billions of algorithms. Is it not feasible to have to study thousands of patents to make sure one does not violate the rights of others, while at the same time designing an integrated product. As a consequence, innovative companies are faced with the constant threat of discontinuing products or paying enormous amounts.


The success of companies such as Microsoft, Oracle, SAP, and Apple was not due to monopolizing certain features, but on continually improving on each other’s innovations. In a 1991 memo, Bill Gates wrote “If people had understood how patents would be granted when most of today’s ideas were invented and had taken out patents, the industry would be at a complete standstill today…The solution is patenting as much as we can. A future startup with no patents of its own will be forced to pay whatever price the giants choose to impose. That price might be high. Established companies have an interest in excluding future competitors.”


Copyrights are a superior alternative to software patents


The same legal principle that protects a book, song, or painting, automatically protects computer programs by forbidding copying or close paraphrasing of the code. Copyrights are straightforward to enforce because it is easy to identify what is being protected: a particular implementation of a set of algorithms to solve a problem, rather than the algorithm itself. They have the advantage of being automatic, free, and only useful against criminals. Copyrights allow the abstract ideas behind a software problem to be created by anyone, but protect an implementation of those ideas in concrete form, so developers who implement their own ideas do not have to worry that someone will put them out of business.


The protection of property rights requires standards that can be objectively enforced. Attempts to protect rights without the guideline of objective criteria will only violate real rights and nullify the benefit of protection.


Further reading:




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  • 2 months later...
One prominent form of patent abuse is “submarine patents” – patents which lie dormant until someone discovers their similarity to a popular technology.

Could one call them "latent patents?" Would doing so be excessively absurd?

-Q

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I respectfully disagree with this argument against software patents.

To argue against having patent protection for a particular subject matter starts from an argument of pragmatism. This appears to be the argument and what it would lead to: “Software development is important to a lot of companies. Drugs are crucial to the health of our people. Cleaning is important for sanitation and good health, too. Fuel-efficient engines are important for our country’s independence from oil-rich countries. But furniture, toys, paint, and electric alarm clocks are not very important to the economy, so we don’t care about what the businessmen in those industries say about the patent system. The current patent system is expensive and costly to litigate. Therefore, patent protection should apply to furniture, toys, paint, and electric alarm clocks, but not to software, drugs, cleaning products, and fuel-efficient engines.”

A principled approach is as stated in the U.S. Constitution: “The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

How to implement this principle can be discussed, of course, but I do not think the solution is to pass separate sets of laws for software, drugs, cleaning products, etc., etc.

The citation to Wikipedia shows how distrustful we should be of that source as a supposedly authoritative or scholarly reference. I also saw no support for this pragmatic approach to patents in Thomas Jefferson's letter.

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I'd have to agree with Toad. The reasoning here is not fundamental.

Elsewhere, patents are divided into two broad categories: composition of matter, and process patents. The first is what somehting is composed of that has particular novel properties, and the second is how something is made.

The argument here is that in the sofeware world, process patents are not patentable. I think the real question is what makes for a valid process patent and an invalid one. Other fields have already figured this out, and there seems to be no reason that software could not.

Certainly if there is a valid claim that software processes are unpatentable, it would not start with the fact that the software industry needs it to be that way.

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The cost of software patents

I don't see how this is relevant. The developer decides whether the costs make the effort worthwhile, and the consumer decides if the product is worth the cost. These principles are true regardless of whatever factor may affect the cost of a product or service.

Software patents cripple software development

It is not one software developer's responsibility to ensure others can develop software more easily. It is his/her responsibility to protect their investment.

Attempts to protect rights without the guideline of objective criteria will only violate real rights and nullify the benefit of protection.

What "real rights" are you referring to? Certainly the right to protect one's (intellectual) property is a "real right".

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My argument against software patents is not that principles should be abandoned when they are "impractical." It is that the particular method by which the intellectual rights of software developers are enforced is impractical.

The principle of property rights does not dictate that software patents are the only principled tool of enforcement - anymore than the U.S. Constitution is required as the one and only principled framework of government. (Indeed, the Constitution has a number of flaws.)

In fact, I present what I believe to be a superior alternative - copyrights - as a method of protecting software. But regardless of whether copyrights are indeed the proper legal tool, I question one particular means of protecting intellectual property because we have to take the practicality of particular methods of enforcement into consideration to determine the proper means of enforcement.

Copyright law includes the notion of "fair use" as an acknowledgement of this. We are not required to request permission to record a wedding with music in the background, and we don't have microphones everywhere to catch every single offender who whistles a song without permission. Furthermore, we are not required to contribute to the estate of Ayn Rand every time we discuss Objectivism. We only recognize property as such when the assignment of rights is possible - that is, practical.

As technology and society matures, so do our legal standards. On the Western Frontier, it was much easier to get someone lawfully convicted and hanged than it is today - not because different principles applied, but because it was not practical to obtain the same kinds of evidence, or the wealth to keep a criminal in jail for many years.

This is why patents carry an expiration date - because beyond certain point, it is impossible to know which party is responsible for an invention. How else do you propose to set the ideal duration of a patent? If we don't take practicality into consideration, should not all ideas, theories, and formulas be patented forever?

So the point I am making is not that property should not be protected, but that the particular means of protecting software needs to respect its nature.

A principled approach is as stated in the U.S. Constitution: “The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Reality, not the Constitution is the ultimate standard of good and bad laws, and in any case, it does not provide any guidance as to whether software is a “Writing” or “Discovery”

How to implement this principle can be discussed, of course, but I do not think the solution is to pass separate sets of laws for software, drugs, cleaning products, etc., etc.

No, of course, not, but I argue that software in particular should be protected by copyrights rather than patents. We do make the distinguishing between a patent of Drano and a copyright on a book – because we recognize the different nature of both.

I think the real question is what makes for a valid process patent and an invalid one. Other fields have already figured this out, and there seems to be no reason that software could not.

Well, the point of my original post is to provide some reasons why the very nature of software makes that distinction too arbitrary for an objective legal system.

Certainly if there is a valid claim that software processes are unpatentable, it would not start with the fact that the software industry needs it to be that way.

No, but my point is that the history of software patents proves their arbitrary nature. This is not something you could know a priori. Rationalism seems to be the only alternative if you want to protect rights without considering how they might actually be protected.

The developer decides whether the costs make the effort worthwhile, and the consumer decides if the product is worth the cost. These principles are true regardless of whatever factor may affect the cost of a product or service.

Yes, but whether copyrights or patents should be used to protect software is not a principle, but a practical matter.

It is not one software developer's responsibility to ensure others can develop software more easily. It is his/her responsibility to protect their investment. What "real rights" are you referring to? Certainly the right to protect one's (intellectual) property is a "real right".

In this case, the “real right” that is being sacrificed is my freedom to develop new software (I speak as a software developer myself) without coercion and intimidation from competitors who uses overly broad patents to keep me out of the market.

There are many fields in software (such as communication and audio/visual manipulation) where if I want to create a new product, I must spend many thousands of dollars on patent research first, and still not have any certainty of being put of business by overly-broad patents. There are also many stories of small companies with innovative products which were put out of business by competitors with large patent portfolios and legal budgets. For example, Creative mined soundcard-related software with patents in the late 1990’s so well that they were able to eliminate their major competitors through litigation and maintain a virtual monopoly on high-end consumer soundcards to this day.

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Software patents are granted and enforced the same as in any other technological area – the same standards apply. There is nothing particularly different about the enforcement of software patents compared to patents on other technologies.

The U.S. Constitution is a good example of a principled approach. Regarding protecting writings and discoveries, it does not enumerate newspapers, books, pamphlets, printing presses, methods of printing, hoists, horse plows, and any and all manner of specifics. If it did, it certainly would not have been able to address later technologies, neither software nor “Drano.”

Regarding guidance between writing and discovery, the distinction is not especially complicated, historically or presently. A “writing” includes all forms of writing, printing, engravings, etchings, etc., by which the ideas in the mind of the author are given perceptible expression. A “discovery” is an idea put in physical form to a useful end, such as for a toaster oven, paint, a diesel engine, a method of making wine, or a process of taking inventory with a computer, etc.

“Atlas Shrugged” is a “writing.” A computer disk was a “discovery,” regardless of what particular “writing” may be put on it.

Software properly falls into both categories. It is a “writing,” i.e., a particular expression of an idea, such as a way to efficiently sort data. When the software is combined with a physical computer for executing the commands in the coding, effecting varied output or other changes, it is thereby being put in physical form to a useful end -- it is part of a useful process.

I agree that based on the nature of each of these two types of intellectual creation, laws should be passes giving different types of protection. But software, when implemented in a physical form with a machine to accomplish a useful end as a new and useful process, is properly a subject of patent protection, and I see nothing special or particular about its nature that justifies excluding it from patent protection.

Protection for a “writing” is very narrow. It only protects against copying of the expression of the idea. For example, copying “Atlas Shrugged” or a piece of software is prohibited, but does not protect against the writing of a different book on the theme of the role of man’s mind in existence or an independently created software code in “C+” for sorting a list of data. Because the protection is so narrow, the duration is relatively long, generally the life of the author plus 50 years (or in the case of a corporate authorship 75 years). The fact that "Atlas Shrugged" is copyrighted for so long does not prevent us from discussing the ideas exemplified by that particular expression of her ideas, or from writing other books -- fiction or non-fiction -- on her ideas in that book. It only protects against copying her book (or substantial portions of it).

Protection for an “idea” is much broader. It covers both the example of the idea, e.g., both the design of a particular toaster according to a new idea, and all toaster designs that could be made using the idea. Because the protection is broad -- for the idea, not just one particular toaster design -- the duration is relatively short. Under U.S. law, the duration is currently is generally limited to 20 years from the filing date of the application for patent

Respectfully, most of the statements about the nature, benefits, or problems of patent and copyright protection are based on popular misconceptions. You are correct that the cost of the patent system is high. I disagree that we should address that for software patents in particular, however. I also disagree that copyright protection is all that a software developer should be entitled to for his ideas.

Edited by Old Toad
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Toad,

I don't think you really address the reasons I give for why software is different. I agree that there are benefits to software patents - but there are also costs. My argument is that the particular nature of software makes objective enforcement impossible. It just doesn't make sense to attempt to protect rights in a way that violates more people's rights than it protects.

You mention "software code in “C+[+]” for sorting a list of data." Are you aware that sorts are a fundamental type of mathematical algorithm taught in every basic C programming class? I had to derive them on the fly for a programming 101 test. There are only a few types of basic sorting algorithms and patenting one of them is a silly as patenting the law of gravitation or the quadratic equation. On the other hand, there are applications that use simple sorts to do complex tasks and complex sorting applications for complex data -- and those deserve a copyright.

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Hi Dave,

The problem with your arguments as they stand right now is that there is nothing particularly unique about them with respect to software.

1. Submarine patents as threat to the industry. Submarine patents aren't a threat to anyone, and they exist in all sorts of industries. What makes software different?

2. Software patents as general descriptions of how to solve a problem. THis is the very defintion of a process patent and all the issues that you mention are already present in a process patent, namely what is obvious vs patentable.

3. Development as risky because of the possiblity that one will trespass on someone else's property. Well, yeah, it's the patent applicants responsibilty to assure that he has not trespassed on someone else's property (this is called prior art). If you think there are many patents in software, then you ought to check out other industries.

Patents DO NOT cripple development. This is a fallacious argument. In a previous thread I argued this point, that the value of a patent is negotiated and it is both parties interest to see the technology commercialized because that is what generates the profits from which both parties benefit. MS paid the $500M, but they didn't stop stales did they? Same with Blackberry. If a company gets put into a bad strait because they didn't uncover a submarine patent IT IS THEIR RESPONSIBILITY. This is true of any industry and frankly investors carefully scrutinize the effort with whic potential investment copmanies have established prior art in their IP portfolio. What's the problem?

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Hi David,

In fairness, I probably should have stated earlier on this thread that I am an intellectual-property attorney, which you already know but others do not.

I think the difference we are having may be clarified by considering the basic standards for obtaining patent or copyright protection and then the exmaples of your paragraph about taking a software test, discovery of the law of gravitation, and quadratic equations.

PATENT

The basic standards for obtaining a valid utility patent are briefly summarized as the following:

1. Subject matter -- “a new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof”;

2. Novelty -- the subject matter must be new; and

3. Non-Obviousness -- the subject matter must not be obvious over what has been done before.

These are the standards that are used to determine whether an idea is patentable or not, regardless of whether it is a toaster or a software patent for a word processing program.

COPYRIGHT

The U.S. statute provides (17 USC 102):

(a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories:

(1) literary works;

(2) musical works, including any accompanying words;

(3) dramatic works, including any accompanying music;

(4) pantomimes and choreographic works;

(5) pictorial, graphic, and sculptural works;

(6) motion pictures and other audiovisual works;

(7) sound recordings; and

(8) architectural works.

(B) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

(Emphasis added.)

Notice that the list under section (a) is exemplary and non-exclusive, but that the limit is stated in section (B).

THE EXAMPLES

When taking a software programming test, if you independently create a short algorithm, say just a few lines long, that may not be sufficiently "original" to be the subject matter of copyright. And if it is copyrightable, which it may be because the threshold for originality is low, if it is also truly independently created, that is still not copying from someone else’s work. Therefore, it would not be copyright infringement, even if someone else had earlier written a similar algorithm.

Discovering the law of gravitation or solving a quadratic equation is not patentable. But patentable subject matter would include, for example: (a) the use the law of gravitation to make a U-bend in plumbing to solve odor problems; (B) the use of a quadratic equation in a missile launch system; or (c ) the use of a software algorithm in a computer to determine the spacing of letters in a word processing machine (e.g., a computer). However, even though patentable subject matter, patent protection on any of these ideas would be subject to the other two requirements, that is, being new and not-obvious over what has been done before.

Even if there are only a few types of sorting algorithms, the first to invent them and put them to a useful purpose deserves both credit and patent protection for that, if he wants to seek it.

The same is true of the U-bend for plumbing. There may be only one way of doing that, in principle, to solve odor problems. But we should all be glad someone figured it out, and for 20 years either pay the inventor what he asks to use the U-bend or continue to use the old out-house until his patent rights expire.

I hope the audience does not mind me making such a long post, I tried to keep it short and I hope it is helpful to clarifying some common misconceptions about patent and copyright.

Edited by Old Toad
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There are times when the legal is not the moral, or when acting morally means that one is breaking the law (that shouldn't exist), or that utilizing an existing law is not moral. However, when it comes to patenting software codes, I don't think the legal is in conflict with the moral; that is, the creator of those codes (insofar as they get a computer to do something that wasn't possible before that set of codes) have the right to decide the terms under which someone else can use those codes that he created and has patented.

In principle, this is no different than me paying a company for their length moulding that is a component in a larger work, the completed picture framing package. We buy the lengths of moulding and then cut them to size for the individual picture frame. I don't know the specific law when it comes to length moulding, though I would assume something like a copyright can be applied to a designed shape, which means no one else would have the right to manufacture that shape without paying the originator a licensing fee for copying the work. And some of that length moulding is very expensive, costing over $100 for enough to build a frame. But we know that cost ahead of time, and charge the consumer the price required for us to make the frame and make a profit.

The same principle would apply to software designers. If a particular code is patented, and you want to use that code in a larger work of programming, then you either ought to pay the creator for his work, or find some other non-patented way of creating your own code.

What I would be against morally is some sort of retroactive form of invoking the copyright or patent laws. In other words, if someone created a particular piece of code -- say the GIF codes for image display -- and then let people use it for free, and then later claim that everyone using it now must pay a licensing fee that is retroactive to that (say for a few years prior to the decision). I think if you are going to apply for a patent or a copyright, then one ought to decide what one is going to charge for that work so that everyone utilizing it will know ahead of time what they are getting into.

For example, right now I am not charging anyone to access my copyrighted material on my website. I could, morally, decide that I will turn it into a subscription only website, with a password system, such that only those who pay me will have access to it. However, I couldn't enforce that retroactively, stating that anyone who viewed my website (when it was free) now must pay me the subscription fee, post-dated back to when I created the website. I think that would be immoral.

In other words, if a particular software producer had decided not to charge, say Microsoft, a licensing fee for their product; but then later changed their minds and were going to begin to charge a fee; then that decision should not be retroactive to the time when there was no charge to utilize the software codes. For any future usage there could be a charge -- say Microsoft was not being charged for Windows XP but they will now be charged for Vista -- but it shouldn't be retroactive -- say Microsoft wasn't charged for Windows 98, but they will be for Vista, but then the software company wants back fees all the way back to Windows 95.

One aspect of contractual laws being objective is that they must be clearly stated at the time of the agreement, say a charge or no charge for utilizing a set of codes, but future contracts would have to also be clear and unambiguous as to under what circumstances a licensing fee will be charged. If Microsoft decided to pay retroactive fees in order to use the codes currently, then that was their decision to make at the time the contract was signed. $400 million dollars sounds like an awful lot of money, until one realizes that this is probably less than a dollar per new unit being sold by Microsoft. Like the picture framing example, this is just the cost of doing business in that field.

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  • 2 weeks later...

Here is a typical example of a patent troll:

Premier is a shell company which makes no products, but simply patents various ideas and then tries to sue as many companies as possible in the attempt to extort money from them. Some of the cases get dismissed, but even when the software patent is clearly absurd, many companies would rather settle than spend money disputing the patent. This in turns provides the profit and precedent to sue more victims.

In 1997, Premier applied for, and in 2001 received, a patent for the playlist. Premier sued Apple in 2005 and recently settled with them.

The idea of patenting playlists seems ridiclous now, but the first Windows media players with playlists were released late in 1997. "Music scheduling" software for broadcasting has existed since mid 1980's.

As is typical of software trolls, Premier contributed nothing to the evolution of media player software -- the playlist patent remained dormant until digital media became a multi-billion dollar market. While someone had to be the first to come up with the idea of a playlist, most programmers would agree that a playlist is a digital analog of a well-known physical practice. (The word "playlist" was not invented in 1997. Or was it - my spell checker does not recognize it, no thanks to dozens of patents on it.) Once the hardware for personal digital libraries became available, literally dozens of independent software projects started up to take advantage of it, and evolved rapidly as they competed for market-share. Many (most?) software patents simply add "in a computer" or "on the internet" to patent well-established inventions, algorithms, and business methods. Reality is the primary source of inspiration for programmers.

Today, Premier sued 19 companies: Microsoft, Verizon, AT&T, Sprint, Dell, Lenovo, Toshiba, Viacom, Real, Napster, Samsung, LG, Motorola, Nokia, Sandisk, Hewlett-Packard, Acer, Gateway, and Yahoo are named in another. Some of these companies don't make software - they are accused of building computers capable of doing so.

It's probable that this patent will be thrown out if challenged. But it's not a certainty, and in the long run, enough businesses would rather settle that Premier is able to keep making profits. The continued existence of Premier and many other shell companies which extort billions of dollars from legitimate businesses demonstrates the problem inherent in patenting abstract algorithms (as opposed to their actual implementations).

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(The word "playlist" was not invented in 1997. Or was it - my spell checker does not recognize it, no thanks to dozens of patents on it.)

I distinctly remember hearing that word on WKRP (the comedy show about a radio station) which means it was around in 1982--though granted that's in a non-computer context!

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Here is a typical example of a patent troll:

Premier is a shell company which makes no products, but simply patents various ideas and then tries to sue as many companies as possible in the attempt to extort money from them. Some of the cases get dismissed, but even when the software patent is clearly absurd, many companies would rather settle than spend money disputing the patent. This in turns provides the profit and precedent to sue more victims.

For you to have a case, you would have to show that Premier never wrote a piece of code regarding this patent. If they did write the code to interface a user with a computer for the sake of playing electronic content in the user selected order, then it is not just an abstract algorithm. It is my understanding that one has to present an actual functioning machine or process to the patent office in order to get a patent -- one could not simply come up with a flow chart diagram. So, if the patent office is doing it's job, then Premier wrote the code that could perform all of those claims on their patent. And if they did that, then they have a process patent.

There may well be issues of prior usages or prior art that could challenge Premier, but if nobody does challenge them on prior usage or prior art, then they patented that process before anyone else did. A Patent is not always about who did it first, but who applied for the patent first. Of course, the other companies would then have to prove prior usage or prior art, which might be difficult to do.

The automatic or semi-automatic means of doing this earlier may not be similar enough to the way it can be done on modern computers to warrant canceling the Premier patent.

But these are all very technical details that I don't think we can resolve in this thread.

What I am concerned about is the usage of terms like "mining the field with patents" or "extorting monies from companies" as if Premier is some kind of thug just because they filed for and was granted a patent that they think is being violated by other companies.

I'll grant you that sometimes the US Patent Office grants patents for seemingly silly things, such as a woman getting a patent for printing the checker board pattern on a scarf that could be worn or that could be placed down onto a table top so that one could play checkers or chess. I would think that the checker board pattern for the sake of playing chess or checkers was already patented by major game manufacturers, and that it wouldn't matter if it was printed onto a wood board, a plastic board, cardboard, or cloth. But, evidently a specific patent was awarded to this individual because it could be worn or played upon, and one can't wear a checker board -- at least you couldn't before she did what she did.

So, one may well want to challenge Premier's patent, but so long as it stands, they have the moral right to get monies for people using that process.

And patents can be very specific. For example, there are currently at least three ways of underpinning two frame pieces together to form a angled corner for the purpose of building a picture frame. One patent is for a V-shaped metal piece, one is for a corrugated metal piece, and one is for an I-beam plastic piece. The patent office rules have changed, it is my understanding that at one time each of these methods would have been included as one patent -- i.e. underpinning the two pieces together instead of pounding nails in the side of the frame pieces would be the patent, and what it was made of would have been irrelevant. However, they are different shapes and require different machinery to be used, so maybe that is why they are different patents.

Premier's patent, speaking as a laymen and not a patent lawyer, seems very comprehensive for almost any means of creating a user interface with electronic content; but the devil would be in the details of the code -- i.e. on the process that they use to accomplish that long list of claims. If you could come up with a substantially different process to accomplish the same ends, then you would not be violating their patent, and could file one of your own.

If Premier actually created a code that could do everything that a modern computer could possibly do in order to generate a user friendly playlist, then they should be congratulated.

Your argument amounts to saying that if Thomas Edison wouldn't have had so many patents, we would be much better off. And I sincerely doubt any such claim.

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