Although issues pertaining to IP (intellectual property) and patents have smaller development houses worried, patents actually can benefit small companies, stressed a panelist at the VSLive conference here on Wednesday.

Advocates and opponents of patent procedures for software techniques had their say during a panel session entitled, “Innovation and IP.” Panelists had a heated discussion with much input from the audience.

Calling small firms the engines of innovation, Andre Carter, president and CEO of Irimi, argued that small companies benefit from the protections of patents, copyrights, and trademarks on IP. Irimi provides consulting to small businesses.

“If you look at the perspective of what IP means to your small business, IP is the great equalizer,” Carter said. By leveraging their innovations, smaller companies can partner with larger firms that normally would not work with them, he said.

“There are problems with the patent system per se. There [are also] problems with the tax code, there’s problems with education. That doesn’t mean we eradicate those things,” Carter said.

Patents have been a concern in open source development, with developers not always knowing if a particular technique is the subject of somebody else’s patent. But Carter, saying he had nothing against open source, called the concept “just another form of IP.”

Patent “trolls,” which are companies that do not offer products but make money through leveraging patents, are a problem for open source developers who tend to not have large budgets, said Nathan Torkington, an open source advocate and an editor with O’Reilly Media. Defending a patent lawsuit can cost US$ 3 million, according to panelists.

“There’s systemic defects in patent laws right now that favor large companies,” Torkington said.

One audience member said a small company cannot compete with vendors like Microsoft that can gain patents on things that are too general. “The whole patent process is being subverted because the people issuing them don’t understand technology,” said the audience member, who did not identify himself.

But panelist Jonathan Zuck, president of the Association for Competitive Technology (ACT), a lobbying group, defended Microsoft. “Microsoft has yet to be a plaintiff in a patent lawsuit. What they’ve been doing in the past few years is writing checks as a defendant,” in patent litigation, despite being the largest patent holder in the world, Zuck said.

Microsoft is listed on the ACT Web site as a member of the organization. Another audience member, also unidentified, stressed the distraction patents cause. “If all patents were brought out of the war chest, it would be near impossible to create anything that’s new,” he said.

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