Yahoo has filed a lawsuit against Facebook for violating ten of its patents. You will not be surprised to learn that the patents are for obvious implementations of features that have all been used on literally hundreds if not thousands of Web sites. Facebook is about to generate a huge amount of capital through its IPO and Yahoo has its eye on the loot.

It’s hard to beat Fred Wilson’s direct response, but my personal favorite is Andy Baio’s. His perspective as a startup founder whose company was acquired by Yahoo is particularly interesting.

The question people who are concerned about the ongoing damage that patent litigation is inflicting on the technology industry need to be asking is how to make this a political issue that lots of people care about. Everyone I know who’s a technology insider sees this as a hugely important issue, but most people on the outside are hardly aware of it. If you need a refresher on this issue, there’s no better place to start than This American Life episode 441, When Patents Attack!

Jacob Goldstein, who did the This American Life story on patents, has a piece up about the Yahoo lawsuit.

Eolas has been tormenting browser makers for over a decade with patents they claim cover browser plug-ins, but last week a jury in Tyler, Texas invalidated their patents after defendants presented compelling prior art. In other words, it took years of litigation and massive legal expenses to do something that patent examiners could easily have taken care of with a Google search. Wikipedia has a useful history of Eolas, including Microsoft’s embarrassing “click to activate” change to Internet Explorer to try to get around Eolas’ patent.

It appears as though Apple has become more deeply engaged in patent warfare — transferring patent rights to a patent troll so that they can pursue lawsuits against other mobile handset makers. For more on this tactic, the goto resource is episode 441 of This American Life, When Patents Attack! I’m sure Apple’s response to criticism would be, “Don’t hate the player, hate the game,” but I reserve the right to hate both the game and the players. Apple is one of the most profitable companies in the world, it can afford to stay out of the gutter.

In other patent news, Marginal Revolution blogger Alex Tabarrok argues in his new book that our dysfunctional patent system is holding back innovation in the United States.

Two guys come up with a good idea for a camera strap and start selling it. Competitor applies for a patent on a similar concept. Despite the fact that plenty of prior art exists that should prevent such a patent from being granted, it’s issued on November 1. On November 9, the small company announces that it’s discontinuing its products rather than risk a legal battle over the patent. Once again the real damage of the patent office failing to discharge its duty effectively is illustrated.

In my previous post, I complained about patent trolls — obscure companies using their patent portfolios to attack developers who have no practical way to determine whether or not they’re violating somebody’s patent when they write software. But big, innovative companies who file for patents and use those patents offensively are just as bad, if not worse.

Philip Elmer-DeWitt takes a look at one of the patents that Apple has accused Android handset-maker HTC of violating. In this case, the patent is easy to understand and is associated with a popular and well-known feature of iOS. The patent in question is for the feature that enables iOS to detect data like phone numbers or addresses in text that is being displayed and turn them into links that allow the user to perform the appropriate action — dialing the number on the phone or launching the Maps application with a map of the address.

In this case, I’d argue that the patent fails the test of obviousness. Nobody who designed a phone that displays text would not think to enable users to dial phone numbers embedded in that text by tapping on the number. I’d also guess that there’s plenty of prior art in this area as well. Certainly this is related to the work done on microformats.

There are also email clients going way back that automatically made email addresses embedded in messages clickable. There are even ad schemes that scan pages and convert keywords into ads automatically. The feature in question is useful but not innovative. And yet Apple is finding success petitioning the International Trade Commission to enforce this patent.

Unfortunately, as obvious as it seems to me that the entire system is a disaster, I don’t see any path forward for patent reform in the near future.

Craig Hockenberry warns of the number one threat to small, independent development shops — patent and copyright trolls:

The scary part is that these infringements can happen with any part of our products or websites: things that you’d never imagine being a violation of someone else’s intellectual property. It feels like coding in a mine field.

From our experience, it’s entirely possible that all the revenue for a product can be eaten up by legal fees. After years of pouring your heart and soul into that product, it’s devastating. It makes you question why the hell you’re in the business: when you can’t pay salaries from product sales, there’s no point in building it in the first place.

Can you remember the last time you read a news story that made you thankful for patents or copyright law? I can’t. I had to sit on this post overnight as I thought about whether I was in favor of abolishing the entire intellectual property regime. As it turns out, I’m not. There are three major areas of intellectual property law, patents, trademark, and copyright.

Trademark law has the strongest leg to stand on. It seems pretty clear that people should, for the most part, be able to trust that something with a certain name is produced by the company with that name. Going to the grocery store and seeing shelves of drinks called “Coca Cola” that were produced by different companies would be confusing. And without laws to prevent it, that would certainly happen. Furthermore, it’s easy to see that trademark law is working effectively because companies generally do trademark searches before they name products. Releasing a product with a name that has a trademark conflict is seen as a huge gaffe. That’s a sign of an effective legal regime.

Copyright is horribly abused, and the routine practice of extending copyright indefinitely is incredibly pernicious, but I also think it has value. I don’t think I should be able to launch a site called the Rafeington Post that just publishes the full text of all of the stories from the New York Times that I happen to find interesting. I should be required to give them a light rewrite like that other site does. In a general sense, I should not have to compete with bootlegs of my own work as soon as bootleggers are able to start making copies of it. Again, people who copy others’ work outright understand that they’re in violation of copyright law, even if they don’t care.

I am inclined to argue that patents should go away entirely, with the caveat that I’m not entirely sure how they work in industries other than my own. In software, though, patents are never, to my knowledge, taken into account at any time during the product development process. Patents are generally too opaque to even try to compare to products that are in development. Furthermore, the computer industry is built on imitation. One day, there were no popular phones built entirely around a touch screen interface. Apple came up with the iPhone, and not long after, touch screen phones that looked very, very similar to the iPhone were everywhere. I don’t think that it could be argued that this has hurt consumers. Apple remains incredibly profitable, and mobile phones are evolving rapidly, much to the benefit of users.

People in computing produce the products that they think will be most successful and rely on luck to keep them out of the crosshairs of ruinous patent litigation. Because there are so many patents, and because of the way they are evaluated, there is no way to easily figure out which patents you might violate with a product or how to get around violating those patents. In the end, the application of patent law is completely arbitrary. Given that a system cannot be both just and arbitrary, I come down on the side of eliminating patents entirely, although I suppose I could be convinced otherwise.

In the end, the laws that are meant to protect creativity and innovation instead often stifle them. Cory Doctorow recently reviewed a book that shows that the Beastie Boys’ album Paul’s Boutique would have lost $19.8 million had all of the samples been cleared under today’s regime. And on a more speculative note, Matthew Yglesias also points out that intellectual property laws could in the end be the primary barrier between us and a utopian future.

Here’s Matthew Yglesias on the acquisition of the Nortel patent portfolio by a consortium that includes Apple, Microsoft, and RIM:

I think the basic dynamic to keep in mind here is that insofar as rich high tech companies dedicate resources to hiring engineers to compete with one another by building better products, the consumer ends up winning. But insofar as rich high tech companies dedicate resources to hiring patent lawyers to sue each other or hire investment bankers to help evaluate patent-based acquisition strategies, almost all the surplus is accruing to the lawyers and bankers.

It’s important to remember that the reason patents and copyright are included in the Constitution is to “To promote the Progress of Science and useful Arts.” Keep that in mind when you read the following two blog posts. One, from Alex Tabarrok, looks at why DVDs of “WKRP in Cincinnati” can’t be released with the original music. The other, by Matthew Yglesias, looks at why Google would bid $900 million for Nortel’s patent portfolio.

Patrick Mueller has some patent-related tips for software developers and people who make stuff in general. He was asked to testify in a patent infringement case because the defense attorneys found a paper he wrote published on the Web, and thought it would help their case.

His tips are simple enough:

• Document the crap out of the things that you make.
• Put your documentation on the web, and make sure search engines can find it 20 years from now.

Be sure to click through to read about his experience as a fact witness.