Bill Gates’s Flip-Flop

In today’s New York Times, I make the case against software patents, comparing a 1991 memo by Bill Gates to today’s battle between Verizon and Vonage:

[Microsoft general counsel Brad] Smith has argued that patents are essential to technological breakthroughs in software. Microsoft sang a very different tune in 1991. In a memo to his senior executives, Bill Gates wrote, “If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today.” Mr. Gates worried that “some large company will patent some obvious thing” and use the patent to “take as much of our profits as they want….”

It’s not surprising that Microsoft — now an entrenched incumbent — has had a change of heart. But Mr. Gates was right in 1991: patents are bad for the software industry. Nothing illustrates that better than the conflict between Verizon and Vonage.

Vonage developed one of the first Internet telephone services and has attracted more than two million customers. But last year, Verizon — one of Vonage’s biggest competitors — sued for patent infringement and won a verdict in its favor in March.

The Times has strict word-count limits, so I didn’t have the space to discuss some of the details of my argument. Here is an in-depth analysis of Verizon’s patents. And here is a longer discussion of Microsoft’s change of heart on software patents.