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Cyber War over IP is Here and Now, Single International patents required

Arthur Hanson

Well-known member
The financial community is in the best position to see the results of the ongoing cyberwar over IP and its impact. They look at how the bottom lines are impacted and when it comes to research, financial resources are one of the key inputs and if impacted, the damage can be staggering and devastating. What the world needs is a single international patent system with a timely, fair and open conflict resolution system. The splintered mess we now have, no longer properly serves the increasingly fast-moving technological world we live in and is actually damaging and slowing down progress. The IP wars are going to be just as impactful as military wars as the world we live in becomes more linked to technology in almost every way.

 

Daniel Nenni

Admin
Staff member
Great article, thank you Arthur. To me this means that leading edge silicon will be required for future generations of AI chips. The more processing power AI has the more capable it will be. It also means that domain specific chips will continue to replace general purpose CPUs. Great news for TSMC and Samsung. Bad news for China since they do not have access to leading edge process technology. And not just bad news for China consumers but for defense and cyber security.

If you are considering doing a chip start-up be sure and include AI in your business plan, absolutely.
 
Better processing power does not improve
application program success because of a
concept called combinatorial explosion (number
of states grows quickly beyond any possible
computing capability). If combinatorial
explosion did not exist, there would be
no cryptography. Most current algorithm
improvements are big data and much faster buses.

I also think a global patent system is
a terrible idea. Each country has their
own legal system and standards of evidence.
Fortunately, governments can't agree on
anything. Varied patent systems requires
companies to make agreements and share
new technology. Patents were originally
introduced by kings as a way to
get builders guilds to share their
secrets so King's could build their
castles.
 

Arthur Hanson

Well-known member
Numerous, conflicting IP and Patent laws are a legal and financial mess that is fed by numerous special interests and getting worse all the time. What makes most great empires great is a system of universal rules that streamline tasks throughout the empire. Now that we have a truly global economy where information can literally flow everywhere at the speed of light, we need an IP system that can keep up. The numerous, conflicting, and inefficient IP protection systems have not only created a mess but greatly inhibited progress by making theft, intentional and unintentional a massive and growing problem. We need a system that encourages collaboration over massively wasteful duplication of efforts worldwide. I would like to see something like an open market for IP from initial thought to product development. This would allow much more collaboration since it would foster collaboration over wasteful conflict. If properly designed this market could speed progress both vertically and horizontally, benefiting both the participating parties and world society in general. Hopefully, it could also it could cut conflict to the point we have fewer wars that are almost always losses for all sides. Conflict is expensive, wasteful and destructive and the current IP system is horribly expensive, inefficient, and costly in numerous ways. It is way past time for a change.
 
I think you are suggesting a Roman type system
that requires constant conquests to avoid
decay.

My view is that main threat US economic (enterprise)
success is Silicon Valley cartels. My company sells
EDA simulation software so I see the problem as
EDA. I think it exists everywhere in electronics.
In EDA there is a 3 company cartel that in my view
is responsible for US lack of competiveness.
I think there are antitrust laws on the books that
should be enforced. There are numeros examples
of the 3 EDA cartel members using in my view
questionable patents and other IP cases. I do not
remember the cases, but there was at least one back
end physical design tool company driven into
bankruptcy by file format patents. Maybe now would
be after the fact changed by the recent Oracle verus
Google SCOTUS ruling that APIs are Copyright fair use.

If your need for global rules had existed in the
early 1900s, it would have by used by Standard Oil
to stop US from adopting now not being enforced
antitrust laws. Do think Steve Jobs' theft of open source
BSD Unix is not a problem? I see your view of progress
as better and better Iphones to feed Applehead
need for cell phone video watching.
 

dwisehart

New member
Here is the problem with a universal patent system.

You design and build a product and successfully patent it.

A small shop in country XYZ reverse engineers your design and
starts selling your product for a fraction of the cost under their
name.

You file a legal claim in country XYZ, where most of the
copycat product are sold, and the courts rule that you do not
have the right to sue their citizens.

They consider this an internal matter not open to review or
protest: case closed.

What can you do? Ask your government to go to war over
the violation of your patent rights?

Just because an international body conveys a patent to you
does not provide a means of protecting your rights when
they are violated.

Rights only exist where they are protected by the government.
 
I think you are suggesting a Roman type system
that requires constant conquests to avoid
decay.

My view is that main threat US economic (enterprise)
success is Silicon Valley cartels. My company sells
EDA simulation software so I see the problem as
EDA. I think it exists everywhere in electronics.
In EDA there is a 3 company cartel that in my view
is responsible for US lack of competiveness.
I think there are antitrust laws on the books that
should be enforced. There are numeros examples
of the 3 EDA cartel members using in my view
questionable patents and other IP cases. I do not
remember the cases, but there was at least one back
end physical design tool company driven into
bankruptcy by file format patents. Maybe now would
be after the fact changed by the recent Oracle verus
Google SCOTUS ruling that APIs are Copyright fair use.

If your need for global rules had existed in the
early 1900s, it would have by used by Standard Oil
to stop US from adopting now not being enforced
antitrust laws. Do think Steve Jobs' theft of open source
BSD Unix is not a problem? I see your view of progress
as better and better Iphones to feed Applehead
need for cell phone video watching.
If you have serious evidence that there is an EDA cartel operating, I suggest you take it to the relevant authorities. If you do not, I suggest you do not publish such statements without the evidence to back it up. "Cartel" is a word with a strict legal meaning.

The fact that there are three dominant players in EDA is no evidence of illegal price fixing or collusion (I understand that is what a cartel involves - thankfully I do not know from direct experience - that's after many years working in and around EDA).

It seems entirely rational at this stage in the history of EDA that there are a few dominant players. EDA has become more about delivering complex tool systems and services rather than point tools. The barriers to entry are now extremely high.

Where is the evidence for this alleged cartel behaviour in EDA ? How does that fit with - for example - the periodic lawsuits - not least the notorious Avant!-Cadence case ? Why have the EDA customers never - to my knowledge - reported the EDA vendors to the competition authorities ?

Exploitation of an IP legal/patent system is not illegal. Sure, that system could (and should) be better. But that's not wholly the fault of the EDA companies. They have to play with the cards they're dealt. This is like blaming bankers when the principal fault lies in poor banking regulation (I'm not excusing the bankers here, just stating where the original sin lies).

Having spent quite a long time in EDA, I'd like to believe it's "clean" (or as clean as it practically can be). Perhaps I'm deluded and someone here is about to set me straight ...
 

tonyget

Member
Here is the problem with a universal patent system.

You design and build a product and successfully patent it.

A small shop in country XYZ reverse engineers your design and
starts selling your product for a fraction of the cost under their
name.

You file a legal claim in country XYZ, where most of the
copycat product are sold, and the courts rule that you do not
have the right to sue their citizens.

They consider this an internal matter not open to review or
protest: case closed.

What can you do? Ask your government to go to war over
the violation of your patent rights?

Just because an international body conveys a patent to you
does not provide a means of protecting your rights when
they are violated.

Rights only exist where they are protected by the government.

There best practice is not to file patent at all, but to keep it as trade secret. That exactly what Coca Cola did, no company is able to replicate the exact same recipe and taste even after 100 years.
 
If you have serious evidence that there is an EDA cartel operating, I suggest you take it to the relevant authorities. If you do not, I suggest you do not publish such statements without the evidence to back it up. "Cartel" is a word with a strict legal meaning.

The fact that there are three dominant players in EDA is no evidence of illegal price fixing or collusion (I understand that is what a cartel involves - thankfully I do not know from direct experience - that's after many years working in and around EDA).

It seems entirely rational at this stage in the history of EDA that there are a few dominant players. EDA has become more about delivering complex tool systems and services rather than point tools. The barriers to entry are now extremely high.

Where is the evidence for this alleged cartel behaviour in EDA ? How does that fit with - for example - the periodic lawsuits - not least the notorious Avant!-Cadence case ? Why have the EDA customers never - to my knowledge - reported the EDA vendors to the competition authorities ?

Exploitation of an IP legal/patent system is not illegal. Sure, that system could (and should) be better. But that's not wholly the fault of the EDA companies. They have to play with the cards they're dealt. This is like blaming bankers when the principal fault lies in poor banking regulation (I'm not excusing the bankers here, just stating where the original sin lies).

Having spent quite a long time in EDA, I'd like to believe it's "clean" (or as clean as it practically can be). Perhaps I'm deluded and someone here is about to set me straight ...
I obviously do not know anything about various anti-competiveness laws.
Here is an experiment. Ask VCs why they will not fund EDA start ups?
I think the answer will be the only way to cash out their investment
is for one of the three large EDA companies to buy the company they
invested in. It is possible government policy on anti-trust has changed
with the current investigations of the large high tech companies.
 
I obviously do not know anything about various anti-competiveness laws.
Here is an experiment. Ask VCs why they will not fund EDA start ups?
I think the answer will be the only way to cash out their investment
is for one of the three large EDA companies to buy the company they
invested in. It is possible government policy on anti-trust has changed
with the current investigations of the large high tech companies.
So first point: you have provided no evidence of any cartel behaviour. The sort of allegations you are making may prove legally actionable. I would be more careful unless you can back these up.

Second point: making such allegations needlessly risks bringing the industry you work in into disrepute. This may not bother you. Others may feel differently. There are certainly real cartels out there that do need tackling. Let's make sure we deal with the real abusers here.

Third point: I'm not sure what the "problem" is here. I worked for an EDA startup for many years. Eventually we were acquired by one of the "big three". Full disclosure - no fortune made - I'm still working ! Do I feel there is anything wrong with what happened ? No. We successfully developed some new technology. However, there was no way we could scale that to a full EDA P&R tool - it would have taken far too long and cost way more than we could raise. It was never a real option. What has happened is that the technology we developed has been rolled out to the benefit of far more users than we could ever support. The customers won. Our direct competitor was forced to respond and raised their game too. I don't see any losers here.

In my experience, there are customers who are prepared to engage with EDA startups. But ultimately, the want to deal with a few large suppliers and actively push the large vendors to acquire promising startups. This all seems right and normal to me.

There are absolutely no guarantees with a startup. It's partly luck and timing which determines success. But it's an experience I would go through again, even if it ended in abject failure (rather than moderate success). Nothing beats the intensity and fun of a startup. Going back to a larger company can be really tough. I sometimes think there are two experiences everyone ought to go through in technology: 1) getting laid off, 2) doing a startup.
 
Discussing and claiming monopolistic behavior is
normal going back to Standard Oil and passing
of current antitrust laws back in the early 1900s. Antitrust
needs interpretations and policy decisions so
it needs to be discussed. US has had a tradition
of antitrust enforcement with new theories. Do
you think people advocating break up of Apple
or Alphabet are in legal jepordy? Also, my
company has an injuncton against Cadence
for stealing (my inpretation) Tachyon DA
simulator. Case is Antrim Design versus
Pragmatic C Software Minnesota Federal
court. Pragmatic C was old name of Tachyon
Design Automation.

My feeling is that currently large electronic companies
will buy start up tools and there are many
point tools (already a loaded term) that are
not being developed.
 
Discussing and claiming monopolistic behavior is
normal going back to Standard Oil and passing
of current antitrust laws back in the early 1900s. Antitrust
needs interpretations and policy decisions so
it needs to be discussed. US has had a tradition
of antitrust enforcement with new theories. Do
you think people advocating break up of Apple
or Alphabet are in legal jepordy? Also, my
company has an injuncton against Cadence
for stealing (my inpretation) Tachyon DA
simulator. Case is Antrim Design versus
Pragmatic C Software Minnesota Federal
court. Pragmatic C was old name of Tachyon
Design Automation.

My feeling is that currently large electronic companies
will buy start up tools and there are many
point tools (already a loaded term) that are
not being developed.
Monopolies and cartels are two quite separate things. You seem to have combined them together.

It is not illegal to gain a monopoly position through fair and legal commercial success (Intel, Microsoft, ...). Nor - I think - should it be. It is the "unfair" (up for discussion) behaviour of those in monopoly positions that needs careful scrutiny and precise legal bounds. I'm no fan of these big monopoly suppliers as they tend to restrict competition and innovation - that's just in the nature of things and hard to alter.

I am certainly not going to make any comment on ongoing legal cases ("sub judice").

My understanding of US law is that defendents are "innocent until proven guilty". So again, I would be very careful about accusations of [cadence=] "stealing" until any such legal verdict is reached (if indeed it ever is). Counter-suits are not unheard of. Defamation is a thing.[/cadence]
 
My interpretation of anti trust law is different than yours.
Traditionally any monopoly was illegal. Break up of
ATT is an example. There was no need to prove
"guilt". I think starting with Reagan interpretation
of antitrust law changed. One new area of change was
consumer damage. Intterpretation of antitrust law
can easily change again.

Tachyon DA has a injunction that prevents Cadence
from using Tachyon DA software that the court ruled
they gained access to in violation of the license contract
between Pragmatic C and Antrim Design. Cadence
bought Antrim assets and financed the legal case
that started with Antrim suing Pragmatic C to gain
access to the software. The case goes back to early
2000s. US federal court injunctions do not expire.
 

IanD

Active member
The patent problem is not just the lack of a worldwide patent system which is enforceable, it's also the appalling standard of patents in the US which are basically to grant any pile of crap and let the lawyers fight it out afterwards -- and yes I know why this happens (applications are cheap and quick), but it's partly responsible for the mess we're in because there are so many patents which would fall apart if challenged (so people ignore them) that this attitude spreads to the meaningful ones, companies assume they will get away with it because their real-infringement needle is hidden in a massive haystack with rounded corners...

When trying to ensure that patents were valid and strong -- you know, one of the reasons for filing them -- we always used to file in the EU first because their examiners are *far* better than the US ones and the system is better set up to reject junk patents. More costly and slower than in the US, but at least at the end you got something out that was likely to be valid and defensible. I'm not saying the EU patent system is perfect (it has big problems of its own) but it's light-years ahead of the US one.

A worldwide system would undoubtedly be the best solution but will probably never happen; however fixing the US system would be a big step forwards and could be done, if anyone wanted it to happen. Unfortunately the big companies who benefit from a system where they can flatten smaller companies under junk patents and pyramids of expensive lawyers (with massive bills) quite like things the way they are, and they have the money and the ear of government... :-(
 

Paul2

Active member
Great article, thank you Arthur. To me this means that leading edge silicon will be required for future generations of AI chips. The more processing power AI has the more capable it will be. It also means that domain specific chips will continue to replace general purpose CPUs. Great news for TSMC and Samsung. Bad news for China since they do not have access to leading edge process technology. And not just bad news for China consumers but for defense and cyber security.

If you are considering doing a chip start-up be sure and include AI in your business plan, absolutely.
Yes, those "AI" chips keeps collecting dust, and nobody buys them, or even know how to use them, (often including their own designers). The biggest waste of silicon the world has seen.

Putting AI keywork on your roadshow paper is surely a great way to get money, but make money not so much.
 
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