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\title{Free Software and Patents}
\author{Dr.~Peter Gerwinski\\Free Software Foundation Europe}
\date{25 November 2002}

\begin{document}

  \maketitle

  \begin{abstract}
    \noindent
    The concept of Free Software (often also referred to as ``Open
    Source Software'') is often misunderstood. This article explains
    the basic ideas behind Free Software and points out why Free
    Software is vitally endangered by software patents.
  \end{abstract}

  \bigskip

  \begin{multicols}{2}

  \section{What is Free Software?}

  The philosophy of Free Software goes back to the idea of freely
  exchanging knowledge and thoughts that can traditionally be found
  in scientific fields. Just like ideas, software are non-tangible
  and can be copied without loss. Passing them on is rather the
  basis of an evolutionary process which fuels the development of
  thoughts.

  In the early eighties, Richard M.\ Stallman was the first to succeed in
  formalizing this for software in form of four freedoms:
   
  \begin{description}
    \item[Freedom 0:]
      The freedom to run the program, for any purpose
    \item[Freedom 1:]
      The freedom to study how the program works, and adapt it to
      your needs
    \item[Freedom 2:]
      The freedom to redistribute copies
    \item[Freedom 3:]
      The freedom to improve the program, and release your
      improvements to the public, so that the whole community
      benefits
  \end{description}

  Software following these four principles is called ``Free Software''.

  It is essential that Free Software does \emph{not} mean ``free
  of charge''. According to Freedom 0 it is allowed to use Free
  Software for commercial purposes. Freedom 2 includes commercial
  redistribution, and Freedom 1 and 3 allow for offering commercial
  services based on Free Software.

  Thus, the opposite of Free Software is \emph{not} commercial
  software, but proprietary software.

  In order to exercise Freedoms 1 and 3, one needs access to the
  so-called ``source code'' of the software which documents all
  internal details and allows for their modification. (This inspired
  the name ``Open Source Software''.)

  \section{Free Software and Copyright}

  As all software, Free Software is subject to copyright law
  (according to TRIPS Art.\ 10) and comes with a software licence.
  The special feature of Free Software is that the licence grants
  the user the basic freedom described above. In particular, the
  copyright holder does not use his rights to restrict the
  redistribution of the software. By specifying the software
  licence, the copyright holder decides whether the software can be
  Free Software.

  There is a multitude of different Free Software licences around.
  However, more than 50\,\% of all Free Software are licensed under
  a specific license, the GNU General Public License (GNU GPL),
  which establishes a principle often referred to as ``Copyleft''.
  This means that the freedoms granted cannot be taken away and the
  Free Software cannot be transformed into proprietary software.
  Some other licences such as the X11 licence do not implement
  Copyleft and allow for transformation into proprietary software.

  \section{How Does the Economical Concept of Free Software Work?}

  Software development often suffers from the problem that good
  software is distributed to the public in executable form, but the
  source code is hidden as a trade secret. This has led to the
  following drawbacks:

  \begin{itemize}
    \item
      The party who has access to the source code (usually the
      copyright holder) has a monopoly on customisation and
      maintainance of the software, leading to higher prizes and
      lower quality.
    \item
      Since the inner details of the software are kept as a trade
      secret, security holes often remain undiscovered for a long
      time, allowing criminals to break into the computer system.
    \item
      Since only one party controls the source code, further
      development of the software is bound to them. If they go out
      of business or decide to discontinue the development of the
      software (like IBM did with OS/2), users lose their
      investments in the software -- money, education, and documents
      which can only be handled using the software.
  \end{itemize}

  Free Software provides a solution to this problem by providing an
  incentive to the author to disclose his source code: If he
  releases his software as Free Software he can re-use in his own
  software several billions of lines of high-quality software,
  released by other authors under a Copyleft licence. But even if he
  writes every line by himself, he can profit from distributed
  development, debugging, and testing which saves him a significant
  fraction of his work.

  While Free Software is developed both non-commercially and
  commercially, these commercial aspects of Free Software are vital
  for its further development. In recent years, the market share of
  Free Software has increased dramatically -- which would not have
  been possible if Free Software was only developed
  non-commercially. 

  \section{Is Free Software Important?}

  Studies have shown that Free Software plays an important role in
  today's software economy. For example the Internet could not exist
  without Free Software such as the BIND name server. Another
  prominent example is the Apache web server with a share of over
  50\,\%.

  The statement of coalition of the current German Government
  mentions further promotion of Free Software as one goal.

  As Erkki Liikannen pointed out, the improved e-security provided
  by Free Software can also be very useful for the European
  Commission.

  The work programme of the Information Society Technologies (IST)
  Sector, part of the 6th EU Framework Programme, says that Free
  Software should be given preference over proprietary software,
  whenever possible and applicable.

  \section{Software and Patents}

  A patent is a temporary monopoly, granted to an inventor as an
  incentive for investing into research and development. It requires
  publication of the details of the invention in a ``patent
  description'', so the society can benefit once the monopoly has
  expired.

  As praxis has shown, patent descriptions do \emph{not} disclose
  the details of software in a way that would be adequate for
  preserving knowledge for programmers, like source code would be.
  In most cases, it is even easier for a programmer to re-invent the
  software according to the claims, than to understand the patent
  description. (In fact, programmers are re-inventing patented
  algorithms all the time, without even knowing that the patent
  exists.)
  
  In addition, an expiration time of 20 years (TRIPS, Art.\ 33) is
  much longer than the typical lifetime of a given software.

  It is practically impossible to avoid violating patents: Software
  developers are inventing algorithms all the time as a normal part
  of their job. Performing a patent research on each of those
  algorithms would take much longer than the development itself.
  Also, in order to achieve interoperability, a software developer
  must use similar algorithms as his competitors even if he knows
  better ones.
  
  On the other hand, customers demand a warranty that the software
  does not violate any patents of third parties -- something the
  developer cannot provide. As a result, only companies with a large
  legal department have the resources to deal with patents.

  Studies -- including those cited in the CEC Proposal -- have shown
  that software patents tend to promote monopolistic structures in
  the software market and that small and medium-sized software
  companies reject software patents.

  \section{Free Software and Patents}

  When it comes to Free Software, the conflict between software and
  patents becomes even more drastic:

  \begin{itemize}
    \item
      Software patents give their holders additional legal means to
      restrict the distribution of the software. Developers of Free
      Software, who do not even exercise their copyright for
      restricting the distribution of the software, do not benefit
      from this, but they have \emph{solely} the expenses.
    \item
      Since the inner details of Free Software are disclosed in a
      well-readable form (the source code), it is much easier for a
      patent holder to detect a violation of his patent, than in
      proprietary software.
    \item
      On the other hand, a developer of Free Software who re-uses
      source code from third-parties distributed all over the world,
      meets enormous obstacles to ensure that his software does not
      violate any patents.
    \item
      \strong{Fatal:} If a third party holds a patent on an
      algorithm used by the software, that third party can decide
      about restrictions of the distribution of the software. In
      particular, the third party can forbid to distribute the
      software as Free Software.
  \end{itemize}

  The last item is the fatal one because it allows patent owners to
  exclude competing Free Software from market segments. This is
  already happening right now, as the following examples will show.

  \section{Examples for Patents\\Impeding Free Software}

  \begin{description}
    \item[LZW:]
      The patent on the LZW compression method forbids Free Software
      to create GIF files which are widely used in the WWW. The Free
      Software Foundation (FSF) in North America asked for a licence
      but did not even get an answer.
    \item[Panorama Pictures:]
      H.\ Dersch, a German professor of mathematics, had to remove
      his self-written Free Software PTStitch from the Internet in
      order to evade a lawsuit. The software used a calculation rule
      for composing pictures into larger panoramas, developed
      independently by Mr.\ Dersch, but patented in the USA by the
      company iPIX.
    \item[Audio Filter:]
      The Swedish audio software developer Anders Torger had to
      remove his Free Software from the Internet because it used
      well-known calculation rules for filtering, patented in the
      USA by the company Lake Technology Limited.
    \item[Optimisation Graphs:]
      Prof.\ V.\ Bulatov had to remove his Free Software HyperProf
      from the Internet because it displayed graphs using a
      mathematical method discovered independently, but patented by
      Xerox, Inc.
    \item[Drawing Characters:]
      Distributors of the GNU/Linux operating system had to replace
      their method for displaying TrueType fonts by another method
      which works slower and produces a lower quality, because the
      natural method for displaying TrueType fonts is patented by
      Apple and Microsoft.
    \item[MP3 data:]
      Due to a series of European patents by the Fraunhofer
      Gesellschaft, it is not allowed for Free Software to encode
      MP3 data, the de-facto standard for digitalised music. It is
      possible, but not yet decided by a court, that the whole field
      of lossy audio compression is covered by these patents.
    \item[ASF data:]
      Free Software is not allowed to encode or decode video data in
      the ASF format of the Windows Media Player due to a series of
      patents by Microsoft.
    \item[Dolby:]
      Menno Bakker, a Dutch software developer, had to change the
      licence of his software Freeware AAC from a Free Software
      licence to a non-commercial licence due to a patent by Dolby
      Laboratories.
    \item[CIFS and .NET:]
      Microsoft's .NET and CIFS network protocols are covered by
      patents. Microsoft speakers have said in public that Microsoft
      is going to use these patents to forbid Free Software
      implementations of these protocols. This means that the
      current situation of a Free Software GNU/Linux server
      coexisting with proprietary Microsoft Windows clients will not
      be allowed with the next generation of Microsoft Windows.
  \end{description}

  As a consequence of the examples above, Free Software cannot play
  an important role in fields such as multimedia software, where the
  key algorithms are covered by patents.

  We are not aware of a single case where a patent holder has
  granted a licence for developing Free Software -- on the contrary:
  Microsoft, Inc.\ is officially using software patents as weapons
  against their primary competitor: Free Software.

  \section{Other Conflicts between Copyright and Patents}

  Free Software is an important example of a conflict between
  copyright and patents: When there is more than one party having
  claims on a specific software, the restrictions add up, and there
  is less possible use remaining for the user. In the case of Free
  Software, the most common situation is that the patent holder
  simply forbids that a given problem is solved using Free Software.

  However, there are other important examples, such as ShareWare.
  Like Free Software, ShareWare does not restrict the distribution
  of copies. Thus, a patent holder can forbid that a given problem
  is solved using ShareWare just by restricting the distribution of
  copies of the software -- just the same as with Free Software.

  As a general result, patents are suitable to restrict the rights
  of copyright holders: They are no longer allowed to grant
  arbitrary terms of usage to their customers for things they wrote
  by themselves. Instead, the patent holder can put restrictions on
  things he did not write by himself.

  Since patents are expensive, this makes clear that they lead to a
  further monopolisation of the software market. They do not
  ``only'' hurt Free Software in a fatal way; they hurt the whole
  software industry.

  \end{multicols}

\end{document}