Posted on 9 Comments

Website/software patents (social networking)

Friendster got some new VC capital, after putting itself up for sale and nearly running out of money. They filed for some patents a long time ago, and at least one of those came through. That appears to be what the VCs are interested in, one had specifically pushed for patent applications earlier.

See GigaOM and Red Herring: Friendster Wins Patent (don’t click on the actual patent link!)

But what is Friendster’s business model? Some advertising, and subscriptions to phone alerts… I suppose it’s going somewhere, but is it enough? For a small company without VC, this could be a good road for profitability. But with the VCs wanting to see a return on their investment, this is just not going to cut it.

Having a funky social network does not automatically equate to a big revenue stream. The online articles talk about market share in Asia. There are other operators there though, ones that probably understand the local culture better. Just think of Mixi (another MySQL user) in the Japanese market.

Yes, Friendster uses MySQL too. It’s an interesting setup, with a special storage engine that queries their graph-structure back-end for finding the connections. But I really dislike software patents, and how VCs can affect a companies possible development path. In this case, the VCs will be pushing to exploit the patents. That’s going to be a pretty party, with lots of high stakes (the potential opponents also have VCs).

I’m sorry, but it’s just ugly. Exploiting your competitors is NOT a business model. And were they really the first, and did they actually invent something new? Highly improbable on the second, and I know for a fact that they weren’t the first. sixdegrees.com was, who had this kind of stuff working (also with MySQL) way back in 1999 – their patent was bought by LinkedIn and MySpace together. sixdegrees.com didn’t really invent anything new either in terms of algorithms, but they were probably the first applying the concept effectively on a website. And good for them. In fact, I met my wife on their site so I’m actually quite familiar with how that site worked 😉

No, it’s just the same old ugly software patent problem. We need to get rid of them altogether, as quickly as possible. But any small step towards that goal will be good. And VCs, please go for real business models? You will get the market you build… do you really want this one? Once a predator, chances are you’ll soon be pray yourself. It’s going to cost big. Perhaps now is the time to invest in patent lawyers? They continue to be the only ones profiting from this mess.

Posted on 9 Comments

9 thoughts on “Website/software patents (social networking)

  1. Thanks for helping to expose the idiocy of software patents.

  2. patents are there because they serve a need.
    they prevent imitation.

    without this protection VC’s would not fund these startups.. why would they? as soon as the idea is out there 100 people would copy it, and the person who thought of it would get nothing.. is that fair?

    Good Ideas need to be protected.

    Saying that..
    stupid and obvious ideas shouldn’t be patentable, and the length of patent protection should be shortened. 15 years is way too long.. BTW… what is obvious now wasn’t necessarily obvious *before* the patent was granted either.

  3. Thanks for your response. Two aspects: patents, and business models. Let’s deal with the latter first.

    If I have an idea for a web site, being there first is the most important. You know how fast things move. If it takes off, it’ll get critical mass and with a usable revenue model the resulting business is sustainable. You see, no patent involved.
    It really does not matter if someone else does the same, you won’t both get critical mass (unless the two operate in different niches). If your system sucks, the other will win. Do you reckon that having a patent should protect someone even though their system is sucky?
    And focusing on patents (or VC funding) diverts resources (human and monatary) from getting out there and building the real business. I’ve written about that before. It’s a serious burden.

    Then the patents… true inventions merit protection, of course. The key issue is that software patents are not real inventions, or innovative, or actually new at all. They merely recycle old well-known algorithms and methods in fairly trivial ways.

    A critical indicator of the nonsense is the fact that many sofware/web patents are so broad that they overlap existing practice (prior to patent filing). Hmm, how is that possible… a patent that covers its own prior art?

    It’s possible because the USPTO does not sufficient check submissions… they just grant stuff and then let the legal system sort it out. So you can try and get all these patents invalidated and that may indeed have a good chance since the issues are very public… however, it costs a fair bit of money to contest a patent.

    I am very much in favour of copyright, trademarks, and real patents.
    My gripe is purely with software patents. IF the USPTO were to conduct proper research before granting nonsense, we wouldn’t have this mess at all.
    I also agree with you, IF we were to even consider having some software/web related patents (and I don’t think it’s necessary, Europe seems to be very innovative without!) then the timeframe should clearly be much shorter to reflect the speed at which the “state of the art” progresses.

    (note on Europe: some software-related patents have been granted, but none have been enforced. So companies have not based their business model on exploiting their ownership of the patent)

    With all that in mind… can you tell about any non-stupid/obvious software/web patents?
    Then we can look at specifics! Thanks.

  4. Exploiting your competitors is NOT a business model.

    Sure it is. How do you think Starbucks got big?

    🙂 Seriously, though. It’s very rare that an actual algorithm is what makes a company successful, in the long run. I stated just the other day that Google and Yahoo could release all of their search algorithms and still be profitable, because at this point their business is caching the internet…..in fact, the only reason I wouldn’t advocate for Google and Yahoo is that once the ‘secret’ of the search algorithm got out, folks would run to make their website the top result. (here come the META tags!!!) But we already know *some* of those anyway…

  5. You cannot obtain a patent for something obvious, even if it’s never been done before. (my older brother is a patent attorney)

  6. That’s theory. And I’d love for this to be true.
    But reality tells us otherwise. And perhaps the definition of obvious is a tad unclear.
    In Europe it is defined as “non-obvious to an expert in the field”
    Naturally an idea on nuclear physics is likely to be very non-obvious to you and I, but that should not be the benchmark. If people at the USPTO are not experts in software and the web, lots of things will be non-obvious to them, but they are old blah to someone competently active on that topic.

    A funny example (non-US though) is that someone got a patent approved in Australia, which turned out to be a toaster. He did this to make the point. After it received a lot of press, the patent got cancelled.

    If you feel brave, browse the USPTO site a bit and search for common names like Microsoft and HP. They have heaps and you can easily find some curious ones. Note that you shouldn’t do this if you reckon you might be involved in any development, because of the triple damages thing. This is why I’m not going out searching for new stuff to point out the fact here.

  7. FRIENDSTER’S a great site and all but like you said, it’s not the first site that established a social network where strangers get to chat, exchange profiles and stuff and all that. MySpace.com even went further with bigger photos and profiles—some stars like Playboy Playmates post there.

    But then Friendster managed to get some technology prior to the emergence of MySpace.com and this helped draw in clients like a bunch of moths to a flame. Then MySpace.com emerged and Friendster’s been chasing the competition ever since.

    Still, it’s a good thing that Friendster’s getting some financial help in order to boost its coverage and features. Maybe they can give chase to the competition and come out with even better fare for its clients. That could only be good for the social network industry.

    Bailey Dorminc

    http://www.checkbondloan.info

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