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Given my background, I could be a pin-up boy for IP Australia or the U.S. Patents and Trade Marks Office (PTO)
because, you know, here is some success, someone's went to the trouble
of filing a patent and in the end he won out because Microsoft had to come in
and become our customer,
through the force of the patent system.
But in the end, I'm also a businessman,
I love
uh... you know
coming out with great ideas and I love the fact that there are
vehicles out there to protect my interest,
enable me to participate
when the majority of the work is being done by corporations or other people
with large resources
to make my project work really quickly.
In the software business,
you've got this
growing presence which is open source
which is actually protected;
it is actually a protected resource
because you're protecting yourself away with copyright
in that situation, everybody realizes that,
so in that situation
you're allowed to use the software as long as you use it
as it is, or you contribute to it,
but you make it available for everybody else to use in the community.
So, you know, when you say open source is free software, it's not free software.
And theoretically you could do the same with a patent.
You could actually file a patent and say,
"Okay, I want for people
to be able to use this patent under these circumstances
as long as they don't,
you know,
if they start making billions of dollars out of this, they should start paying a royalty.
But everybody that's using it for small to mid-size applications,
they can be free." Agreed?
Everybody think that's a reasonable approach to take?
Alright, well that's good.
Any dissenters from that?
Any dissenters?
Oh, so we've got clarification on that.
Okay,
so what I'd like to ask now is,
what is a software patent?
By definition,
what is a software patent?
I know the term
that I came up for it. Would anybody like to have a shot at it?
Come on someone, someone be gutsy
and stick their hand up and save me here. No?
Oh, chickens [laughs].
Alright, well from what I understand,
a software patent is
a patent that is a
a process or
system that will only work on one
CPU as
basically
one algorithm, because
in reality
the patent system
around the world has agreed that you can't patent an algorithm.
So, E=mc2 is unpatentable.
You know, A+B=C is unpatentable.
But if you put that process on a computer
that talks to another computer that
has another process and the two together
and the two together actually start to work in a system,
then it becomes more of, of what you would call a traditional,
uh... uh...
mechanical
operational uh...
uh... system.
So you get that from, in my thinking,
from the way I understand it, an algorithm
is not patentable,
but as soon as you start introducing these other components it becomes less and less
what we're talking about by definition. So, for example when Jim Fitzsimons,
my very good friend who suggested that I go and get a patent, he says that Uniloc,
my first patent,
was a
software patent,
I agree with him
in generalization. But in reality it is not a software patent
because my patent actually says,
here's a serial number,
it gets put on this computer,
it checks across a physical connection
over the internet to another computer to see if that serial number is legit or not
or that it's been used before.
If it hasn't been
then this computer goes out to physical devices,
finds out
information about those physical devices, makes a finger print from that
information and then
sends it back over to
the home computer
to
link that serial number to that specific
finger print of hardware
and then send back an unlock code that enables them to use that software only on that machine.
That's what I invented.
When I first invented it, it was to enable people to share software freely
in a demo mode.
So, I actually started
try and buy software,
but activation is what everybody's ended up using it for, although try and buy,
it covers try and buy as well.
So that's really what I invented and yet
technically it's not a software algorithm
It actually involves
mechanical processes, components, physical components,
multiple computers.
So, technically,
even though it involves software, it is not a software only patent.
So, I just want to make sure that
that was clarified because
it has a
large bearing on, first of all, this misnomer that people have
about
the unfairness of having a patent, having a software patent.
Because
everything is digital these days,
even
processes, that used to be mechanical if you had a business process in the past,
now,
frequently it's a software process
that includes humans that interact at various times.
But basically if you say there is no such, there is no room for software patent,
then you're really,
it's really open slather
for anybody who could just go faster than the next person.
The other thing that has become clear to me as an inventor
is that there's really only two paths to success
with any kind of
new technology or concept.
One concept, one approach which is,
a good friend of mine Matt Barrie who runs freelancer,
he is a really incredibly fast moving entrepreneur, he thinks quick,
moves quick,
goes after opportunities like a bull out of the gate and he's, he's a scary guy to me.
You know, he is one of those type,
and he just looks me straight in the face and just says,
"Look Ric,
if you can't go as fast as the next man, then, you know,
that's, your fair game,
because the market will demand
who will follow who by who moves the fastest."
But the other approach to that is, "Hey I'm an inventor.
I am not an entrepreneur", I am not,
you know,
I do not know how to
build a team really quickly and how to get
markets to move in to adopt my product.
So,
all I can do is go to a government and say,
"Can you give me some protection to enable me to,
to even
have a go at trying to make some money out of my invention?" Because otherwise,
somebody will just come along and say, "Ric, you've got a great idea!",
"Fantastic Ric!
How does it work?"
"Oh that's great! Oh we might,
we might send you a couple of bucks in a few years,
thanks very much for your time."
You know, we have no control over that and no one
who's a fair thinker, thinks that is
the right way to treat somebody who's honestly come up with a good idea.
So, looking back at that whole process, I am so grateful
for the patent,
for the provision of the patent system.
And before I get into
anything else, I just wanted to share with you something that happened to me
when
we were doing
the re-examine of the Uniloc patent.
The Microsoft team asked the US Patent office, too,
for re-examination of the Uniloc Patent
and usually these examiners who, who sit in and listen to our case
in the re-exam,
they sit
talking to a
table load of,
of lawyers,
but in this case they got me to fly to Washington and I got to sit in the room.
And
what was really surprising is that,
as soon as I came into the room,
the examiners warmed
to the fact
that here was an actual
inventor, one of that rare breed
that actually has invented something
and his name is on the top of the patent and they're actually going to get to meet him;
which is sad because,
you know, examiners these days are dealing with lawyers or they're dealing with
paperwork or
somebody representing you as the inventor over the
phone or over the internet.
So,
and that's interesting, I, just to show that I am
very pro-patent,
they asked me for an opening statement and I said,
the first thing I said,
"Do you need an interpreter?",
with an Australian accent.
And then, at that lawyers were all looking in their papers, "Where's this, where's this,
what's he doing? Where do you, what's he mean to say that?
And you know the examiners kind of took about ten seconds to work out and they just started
laughing
and then after that they said, "Mr. Richardson,
do you have an opening statement?"
And I said,
"Well after myself and my family who
contributed to the
resources that were needed to file the patent,
the next biggest investor, I thought,
was the US people
the people of the United States."
And they said, "Really?" And I said "Yeah, because I know that the $1500
filling fee, or whatever we paid,
didn't cover the time that was put in by the examiner at that time,
to check
whether I legitimately did have a
a legitimate idea or not.
And had checked for prior art and checked that I wasn't taking someone else's idea.
And when they gave me that certificate,
it was a real privilege. And I felt like
it was an investment." And that turned out to be a really good thing to say to examiners,
Especially when
they were being asked to question one of their fellow examiners who made the
decision back in, you know, '93, '94.
So,
you know, looking at it from that perspective, I hope you see me
as an inventor
one of the guys that is the
patent system was set up for.
Guys like me
and Edison and
and all the other greats that we all know and all the little guys in between
like me, who
had a great idea and could be so easily run over by people with more money
or resources.
So now
we're kind of looking at...
So now we're getting into the section where we kind of, where I'm talking
about
what patents mean to me as an inventor today.
And that is that
the reality is, that big corporations are using patents like trading cards
you know, you have this, I have that,
we have disagreement, we'll trade and in the end we'll work out what the
difference is and pay each other out,
based on that
process.
I personally don't see a lot of small guys getting crushed by big guys
because in the end if you do have a patent that protects what you're doing,
they actually value that.
And it's part of your whole acquisition strategy.
And so,
rather than say, hey, big guys with patents are abusing you, if you actually
have something that's unique
and you stop and say, "Okay has now anyone done this? Yes?
No? No one's done this?"
Protect it and it
actually makes you a target for them,
a target in value rather than a target to be squashed.
If you have enough market presence that your product is of interest to anybody
in the large scale,
then you can't but be in the best position possible
if you have a
patent.
And to me
there's these two type of patents like,
I looked very closely at the Lemoxin model. I don't know if you know who
Lemoxin is but he is famous. His foundation is famous for
having
a very large claim
structures,
it cost you 20 grand to just work out whether you're infringing or not.
You know, it is so complicated.
And so, that model is great if you're
basically trolling where you go out and get all these small
infringers
nd you're only asking for $20,000 for the
license anyway so,
so that's why spend $20,000 just working out whether
they are infringing or not or pay $20,000 for the license.
And to many, the patents are very hard to understand.
I'm the reverse,
when I write patents, I don't want to make them a work of art.
I just want to very simply state
that my idea,
state the kind that says my idea is unique,
these are the things that I think are unique about it. I have done a prior art search,
I might have even paid for a prior art search
and then I'll file a provisional based on that.
And then if I survive the first 12 months and the thing is being taken seriously
by the people,
I will go through the filing process and find someone like Peter
to cover my backside and have a really good prior out search done and go
through the whole process.
So, with that
in mind,
I am, I actually, when you look at the software,
the software and copyright issue as against
patent and software issue,
a lot of people, I think there is a misnomer there that
copyright, open source is very egalitarian and patent and software is not.
It's a bunch of people going after money, greedily going after money
But I actually
will make my patents public domain if
i don't think that
not going to engage in a large scale business that I'm not going to legitimately try
that I'm not going to legitimately try and have a go at the product.
I am not going to sit around
filing patents on the hope that somebody is going to use this in the
future and I can pull some money out of them.
And that is not what I did with Microsoft either, you know I actually had
a multi-million dollar business going in the states and eventually
did a lot of business.
We were on the cover page for family PC magazine.
We were on the, you probably would have seen
our software on the front covers of magazines here on Australia.
We actually had a big going concern, so, you know, we're not, even though a lot of
people just spout the name, you know, patent troll, I was never in that category.
And in fact that is what
made us find an agreeable path
with our
new customer, Microsoft.
So with that in mind,
I'd like to confess that I actually do use open source software.
I do,
I find it complicating though,
in that if I want to add to that software,
I actually have to have a divide between what I am trying to do,
that's, I want to keep proprietary
and what is, it is open source.
Whereas, if I could license a patent
to do specifically what I wanted to do and then be free to use that code in any
way that I want, then,
you know, you've got a lot more freedom. And I'd suggest to you
the whole
problem that people have with software and open source
can be addressed
in the patent situation
as long as the people that have done the software
related patents are fair in the way that they licensed it.
You know, one of the situations that really
highlighted this problem for me is that
I was into for a time there, I was trying to solve the problem with backup
batteries
and I was actually in the process of selling a hot swappable backup
power system to HP.
It's something that I invented the ability to
plug as backup battery into the computer pull the existing battery in,
put the other battery
into the computer without the computer being shut down.
During that process,
I worked; wanted to it with Apple computers
but they have this magnetic connector. You know what I'm talking about
the magnetic connector?
So to actually do the test,
I had to
buy an Apple power adaptor and
cut if off
and reconnect
my outside battery to that, to that process.
Because Apple even though they don't
participate
in secondary power supplies,
they ferociously stop anybody else from doing that.
And I felt then the other side of the equation where,
goodness me, they are not going to compete in this space,
but they won't let anybody else compete in this space?
And I actually suggested to the
examiners that I was talking to at
the US Patent and Trade Marks Office, actually said to them,
you know the problem with the patent office, the patent system is that if
the person needs to be protected to be able to run their own
business out.
But if they are not in this business, or this business, or this business,
then people should have a
standard way of knowing how much they should pay
if they want to use these patent in these ways.
They should be allowed to do that.
And I just felt that
there was something missing there because
I get, I get infringed
or I get impacted and restricted by the patents system too.
So even though,
I agree to be the poster boy for the US PTO and IP Australia,
I do share that concern about software. There should be something like,
about patents.
There should be something like the ability to know that you pay 8%
of your sale price or 3% or something like that
as a royalty to the patent owner
for your application as long as it doesn't compete with what they are
actually doing. Something fair like that,
that's the Australian side of me. The inventor side of me says,
"Hey I need to get protection here for something that I came up with."
So anyway,
hope I haven't raved on too much,
and I hope that I shared some insight from my side of the story as an inventor
Thanks for your time.