Why Patent Injunctions Are Even Worse For Open Source

from the yes,-hard-to-believe dept

The damage that software patents cause to innovation in the computer world is a constant theme here on Techdirt. But as a fascinating new paper by James Boyle explains, the threat to open source, particularly from patent injunctions, is even greater because of the special characteristics of that software development methodology: If open source innovation has great social benefits in fostering competition and innovation, it also has particular vulnerabilities. First, precisely because open source development takes place in a network and allows both small and large players to participate by building on a common technology, it is particularly susceptible to attack and disruption. A proprietary monopolist fully internalizes both the costs and benefits of policing its technology and its intellectual property. Members of an open innovation network, however, do not. Individual members can be "picked off," forced to abandon promising lines of technological development, or to pay ruinous "stacked" royalties because the costs of litigation are too burdensome for any one member of the network to bear. It is in this context that the threat of injunctions is particularly worrisome. In fast-moving technology markets, the dead stop forced by an injunction can be enough to doom a product. An entire network of innovation could be shut down by an injunction obtained against a single small participant who lacks the resources necessary to challenge the patent or defend against the injunction.



Second, most of these markets are characterized by strongly cumulative innovation. A finished product may "read on" literally thousands of potential patents. Boyle explores these great points at length in his paper, which is well-worth reading. He also offers some suggestions for ways in which the threat of patent injunctions against open source can be reduced thanks to a ruling by the Supreme Court, eBay, Inc. v. MercExchange, L.L.C, and the four-part test it introduced: the Court held that permanent injunctions in patent law are governed by the same equitable four-part test as injunctions in other areas of law. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. Boyle writes: this Article argues the Supreme Court’s test in eBay, properly understood, offers some constructive ways to respond to both the benefits of open source innovation and the threats posed to it by injunctions. In particular, the third and fourth factors -- the "balance of hardships" component and the "public interest" component -- are ideally suited to allow recognition of the unique vulnerabilities and the unique competitive and innovative value of open source production. As open source becomes more widely deployed, so the potential damage that software patents can cause to it grows. Boyle's paper is a timely reminder that judges need to take into account the special nature of open source when considering whether to grant patent injunctions if society as a whole is to benefit, and not just the patent holders.

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Filed Under: development, injunction, innovation, software patents, supreme court