Prior Art for the BillingNetwork Patent Troll

I am saddened that the supreme court decided not to address the software patent problem with Bilski. They had an opportunity to abolish or at least reign-in software patents, which are an inherently bad idea. Instead they undid what little progress had been made in the Bilski precedent.

I think others have already more eloquently covered how the Open Source community lost in the final Bilski ruling.

Patents are damaging to Open Source healthcare information technology, and by proxy healthcare itself.  I believe it is time to tell you a story that I have been sitting on for more than 5 years, that serves as an excellent case in point. IANAL So understand that this is told from the perspective of a software developer, who, out of necessity has become familiar with patent, trademark and copyright law. As legal advise, this blog post is worth exactly what you are paying for it.

What must I, as an Open Source software developer, do to avoid being sued for patent infringement? The only semblance of protection against being sued is to make my defense so rock-solid that someone who might consider suing me would be worried that I could successfully counter-sue for anti-competitive business practices. So what are the defenses against patent infringement? I pulled these from my own experience, and articles like two most common defenses against patent infringement.

• Non-infringement: My code does not implement your patented method
• Your Patent expired: The time on your patent has already run out before I started making money from my selling or supporting my software
• I have patents too: and if I am infringing yours, then you are infringing mine.
• Have shallow pockets: I am relatively poor, that this lawsuit is pointless, you will never get any “real” money from me or anyone else I associate with.
• Invalid Patent: Your patent is invalid because
  • Prior Art existed: sufficient descriptions, or actual code already implemented or described your patented method before your patent was granted (this one works for me, the developer because I am able to search through sources of prior art myself)
  • Your patent was obvious: although no specific prior art existed that identically replicated your patented technique, your method was obvious based on what was published
  • Your patent process was flawed: You did something that you should not have during the patent process. (not helpful to me as a software developer since it focuses on a particular given patent)
  • Not patentable: Your patent covers something that is not suitable for patenting (also not helpful to me as a developer)

Obviously non-infringement is the best option, but here is the trick: If I do a search for patents that apply to my area of expertise, and I am later to found to infringe on a patent that I read, I might be liable for “willful infringement” which carries stiff penalties. So generally I cannot search for what is actually patented. This makes it somewhat difficult to avoid infringement. You only know when you are infringing because someone contacts you and says “you are infringing”.  This what Open Source developers refer to as the patent minefield problem. The only way to avoid the minefield is to merely replicate software techniques that for which you can find implementations that are more than twenty years old. Finding prior art is not enough, because you cannot know the dates of particular patents without searching for them. So basically, Open Source projects can safely implement any software technique that was in common use twenty years ago. That kind of sucks, because you cannot even improve them, because those improvements might be patented, you can only re-implement them. So the only way for an Open Source developer, like myself, to entirely avoid patent litigation is to stop innovating.

I hope that my readers, irrespective of their perspective on software patents, are already uncomfortable. This is not what the patent system was intended to accomplish. Just because my chosen method of profiting from my innovations is not the same as proprietary/patenting software companies, does not make my work less innovative or valuable in any way. But there is no way for me to make my “innovation process” safe from patent infringement lawsuits.

What options do I as an Open Source developer have? Basically, if I am actually doing something new and different, and I want to release it as Open Source, I just have to release the code and then pray that it is either A. Not a patented technique at all or that B. If it is patented, I can defend myself.

So it is really important to note that there is nothing, absolutely zero, that I could have done -in advance- to avoid implementing someone else’s patented technology.

The Shakedown

Several years ago, FreeB, an Open Source billing engine that I wrote was attacked by a patent troll. When I get the time I will publish the letters I got to chilling effects but for now I will just include snippets. First, I should clear up some confusion. I was contacted by BillingNetwork because I was the owner of the Freemed.org domain name. I was developing FreeB, the medical billing module that Freemed would briefly use, but Jeff Buchbinder was the lead developer of the Freemed project and I was merely a contributor. So I really had two hats, one as a Freemed user and contributor, and one as the primary developer of the billing module, FreeB, that any EHR could (and did) use to enable medical billing.

BillingNetwork is what I would consider a Patent Troll. My definition of that term is any company that makes vastly more money by suing from its patents, than it does from actually selling any product that implements the patented technology. Making good software, that does well in a competitive market is not easy. Most of the software that I have written will never be subject to market forces. Usually this is because the people who hire me to extend or create Open Source healthcare software do so without having a completely reliable business strategy. They just realize that a lack of software is impairing their entrepreneurial aspirations and hire me to fix that problem. Some of my software projects have been tremendously successful in the market, but most of them do not get off the ground from a business perspective, this is true of every software development company or individual that I know. When a software project finally is useful in the market it is usually because there we were several earlier iterations of the idea that were abandoned. Going to market with half-baked software inevitably dooms a software company to market irrelevance.

Patent Trolls, even ones who “market” their own products are usually totally irrelevant in the marketplace. They have not put in the work needed to make their patented idea into a “workable” innovation. The irony is that making software “workable” often means that you have to completely abandon your original design. What actually works in the software market is often dramatically different than any starting software designs. When a Patent Troll patents a software design, without having the ability or often even the intention to turn the design into a working product, they very often patent a very poor design. These patents are markedly different from patents from large companies, like IBM, Microsoft or Google, that create software patents as a side effect, and as side business, from making process of creating fully working products.

BillingNetwork just settled with Athenahealth, a company which has about 1000 times more market relevance than BillingNetwork ever will. Their patented design, as you will see below, is not a particularly good design. They qualify as a Patent Troll in my book.

Here is the relevant text from the letter that Billing Network sent me more than 5 years ago:

We are not charging you with infringement of the patent, but are bringing the patent to your attention so that you may consider entering into a .license agreement with BNC.

(The underlines are mine.) This is really interesting. Billing Network was offering to license me this patent without ever implying that I actually infringed the technology. If Billing Network was actually an “innovator” it was in the field of patent trolling. They would not only contact web-based EHR/PM vendors with letter like this, but they would also send letter to the customers of web-based EHR vendors! Even in these letters they would not actually say that the software actually infringed, only that it might be. If someone owns a patent, and they say to another company “hey you are infringing my patent” then they have to back that up in court. If the patent holder says it publicly while knowing (or should have known) that the claim of infringement was not true, they might be guilty of libel and slander against their target. But if the patent owner says you “might” be infringing, then they have no obligations, and if they say that directly to the users of software, rather than the developers who might be able to actually evaluate that claim, then they can earn “licensing” money from the FUD they create around their patent, and what it covers, without ever having to go to court and prove anything. This is important, because it allows BillingNetwork and other Patent Trolls to use a patent like a shotgun generally against any company in a given field (in this case web-based EHR that does medical billing), rather than merely those companies which actually infringe the patented methods!!

Even if you are against software patents, like I am, you have to marvel at the evil genius at work here!!

At this point I made the mistake of actually calling them and emailing them, as they requested, and explaining that I could not license the patent because that does not work for Open Source. At this time I foolishly assumed that contacting them was better than reading the patent to see if the patented technology was anything like what I had worked on. But this was foolish, once they have said “hey take a look at this patent you might be infringing” there was probably no way that I could have been held as a willing infringer by merely reading the patent.

In my communication to them, I included the link project pages for FreeB and Freemed which of course allowed for full download of the sourcecode in question. The letter that I got back was so contorted and confusing that I realized that I needed legal help, and so I contacted the FSF and EFF and they put me in touch with the Public Patent Foundation. Who helped me out from then on. They wrote a “please go away letter” for me, and after some back and forth, that was the end of it. Perhaps Billing Network sorted out that I although my billing software was in wide use, I was not making money on it. But for the present text I think it is important to show how belligerent they got, without ever actually implying that I infringed anything.

From the second letter:

We are eager to avoid a possible conflict and to resolve any legal issues amicably.
If you are interested in entering into license negotiations, we will have our intellectual property counsel forward proposed terms for a non-exclusive license. While we take our patent rights seriously, we are interested in resolving this matter quickly and believe that you will find our licensing terms to be quite reasonable.
As we indicated in our last letter, we are not charging you with infringement, but are merely offering you a non-exclusive license for the above identified patent.

From the third letter, after I foolishly talked to them:

We have reviewed your email to Dr. Krumholz, and it appears that your FreeB billing system may be covered by the ‘229 patent. Accordingly, you need a license from BNC under the ‘229 patent to continue using the system.

Note the powerful “Accordingly”, you ‘may’ infringe therefore you ‘need’ to get a license. Legal marketing at its best!!

The last letter is the part of the response to the PubPat letter… Specifically this is the part where we said that FreeMED and FreeB do not infringe on the patent in question.

Your letter indicates that you do not believe that the FreeMED system includes several elements of the claims of the ‘229 patent. However, you have included no documentation to support this assertion. We are reluctant to rely upon unsupported assertions by the attorney representing a potential licensee for obvious reasons. Accordingly, we request that you provide us with any documentation that supports your assertion.

Finally, we restate that we believe that a license agreement would be in the best interests of both parties…

(again underlines mine). Remember, I had provided them with a link to the sourcecode in question during our initial discussion. This is a critical issue. BillingNetwork viewed me providing full access to the sourcecode as “no documentation”. In short, from Patent Troll’s perspective, they needed to be given a guided tour of sourcecode that they already had access to, in order to accept our assertion that we were not infringing on their patent. Think about this from a business expense perspective, it is not enough for me to have read the BillingNetwork patent, and be sure that my software works differently, I have to determine which parts of my code -prove– my non-infringement, and then give the Patent Troll a guided tour.

Next we will actually talk about whether I infringed the patent. But for now lets take a stock of where we are:

• Jeff and I (and Open Source software developers generally) have no way to protect selves from this type attack. We could not review the patents the danger of becoming “willful infringers” (the patent minefield problem).
• The patent troll attacked us with the expectation that it was cheaper for us to pay to license the patent rather than even figure out if we infringed the patent. So they are not making money from their “innovation”, but rather the simple fact of having a patent for one design of the tens of thousands of designs that might work. Their patented design, is like an “idea tax” on the process of implementing any of the other designs.
• Thankfully Pubpat stepped forward to help us, but if they had not, we would have been on the hook for hiring lawyers to defend us. Without PubPat, I had no good choices: Go out of business hiring lawyers, or defend myself poorly. Did I mention that Pubpat is an organization that you should be supporting?
• The Patent Troll viewed it as our responsibility to prove that our openly published code did not infringe rather than their responsibility to look at the code and prove that it did infringe. This is the “guide tour” problem.

This is why this a “Troll”. The whole word picture here is that of a troll who charges a “toll” for a bridge. A bridge the Troll did not build. This is why software patents, no matter what you think of them, stifle Open Source innovation. So far we have not discussed if the patent is valid or if we actually infringed, but the expenses that I incurred and the time that I spent dealing with this prevented me from doing… that’s right folks… actually improving my software. Practically speaking this halted my development activity for probably three months in total, at different times.

Now what if I could show, conclusively, that either A: we did not infringe the patent, or B: to the degree that we did “infringe” we did so based on obvious prior art? That is what I will attempt to show next. But at this point I want you to see that even without considering actual infringement, BillingNetwork has a method to shake down any user of my Open Source project using carefully crafted FUD, and that they attempted to do this entirely independently of whether my code infringed or not. Because they have a patent on one design for the type of software that I develop, they have a free ticket to go after my entire market place, without regard for the actual content of the patent in question… This has nothing to do with “protecting” an innovation that BillingNetwork had, its all about using patents to legally extort the free market. I cannot help but quote that Wikipedia article on Extortion:

Refraining from doing harm is sometimes euphemistically called protection

How awesome is that quote?

Did we infringe BillingNetwork Patent 6374229?

note: I would recommend that if you develop healthcare software, Open Source or otherwise, you stop reading now. By reading this, you might become a willful infringer of the Billing Network patent. Although I do not think I give enough detail here to make you a willing infringer, the link to the patent certainly would. Be careful.

That question has two answers. One for my project, FreeB,  and one for Jeff’s project Freemed. But first lets look at the patent in question.

There are seven claims made in the patent:

Claims 2-5 are actually refinements of the first claim, that begins:

An integrated internet facilitated billing, data processing, and communication system comprising:a database server and a home page of a website

The sixth and seventh claims begin:

An integrated internet facilitated billing, data processing, and communication system comprising:a database server and a direct access server electronically interconnected between said database server and a plurality of direct access subscribers each of which gain secure thin client access into said direct access server via a modem and an internet service provider (ISP)

An internet based computer system for billing, data processing and communication for and between subscribers and said system, one type of subscriber being of the browser-based type and another type of subscriber being of the direct access type, said system comprising:

So the version of FreeB in question did not infringe. Why? There was no database, and there was no web interface. The first version of FreeB, and the only one originally written by me (the second version was originally built by the ClearHealth team) and the only one that existed during this letter writing, was designed as nothing more than a data pipe. You connected one end of the pipe into an EHR, and out the other side came properly formatted medical bills in paper and EDI formats. It was a software module and had no direct user interface at all, you configured it by editing text files. It remembered nothing from one run to the next. It was not a great design, but it certainly did not infringe the first five claims here. The claims are all mixes of “browser” and “database” requirements, and FreeB did none of that.

Of course, you could combine FreeB with another system, that could theoretically infringe the patent. In fact you could argue that FreeMED, which was an early attempt at creating a web-based EHR that could do billing might have infringed. But there is no way that FreeB itself, in the version that BillingNetwork said “accordingly” needed a patent license, could have infringed the patent. The sourcecode that was available to BillingNetwork as well as the developer documentation on FreeB available at the time made this perfectly clear. BillingNetworks implication that that FreeB “might” infringe their patent was based only on the fact that FreeB was software in the same field of endeavor (medical billing) as their patented technology.

But what about FreeMED or the combination of FreeMED and FreeB?

There is nothing in the patented claims that even early versions of FreeMED could not be made to do with mere configuration. Many of the things claimed in the patent were done in FreeMED out of the box, but then most of the things written in the patent are done by every web-based medical billing system on the planet. Of course, this is true of FreeMED today, as well as the far more popular ClearHealth and OpenEMR projects, as well as probably half a dozen lesser known web-based Open Source EHR projects that either support billing today or want to in the future.

But FreeMED is unique. As far as I know, it is the oldest Open Source web-based EHR/PM system. In fact, it is so old, that if it did infringe on the BillingNetwork patent, it has been infringing even before the patent was issued.

The date for filing of patent #6374229 is Oct 20, 1999

But FreeMED was already a working codebase at that time. I inherited the FreeMED.org domain name from other owners (sorry it is down right now… still working through a server migration…) but thankfully at the history of the site, and therefore the project itself can be found at the Internet Archive. Let me take you on a quick tour. The oldest version of FreeMED.org that has a snapshot is Nov 25, 1999 at that time, there was already a demo running. More importantly we find that the site itself has downloads of the FreeMED project starting as early as 05/27/1999 the latest of these is from 23-Jul-1999.

These links actually allow you to download FreeMED as it existed, at that time, three months before the Billing Network Patent was filed. But most importantly, are two files in that download. The CHANGELOG and TODO files. No matter how I might disagree with some of Jeff’s software design decisions, I have to admit that the man was a stickler for standard Open Source project conventions and that is paying off.

From the changelog take a look at the entry “19990709 –” which states in part:

a added structures for payment records (for checks, etc) to the admin
module. stupid db reinit — you go squish now.
a added prelim payment records module — working on addition function
now.
a added billing function from main menu with billing_functions module.
n these functions are not ready for prime-time yet. please do not wail
on them then complain that they don’t work 😉 -jeff

Even more relevant is the following section from the TODO file

19990708 ——————————————————-
* implement payments and billing databases, with structures
….
* insurance payments related dbs and tie-ins, possibly with API
revisions

This is an indication of where Jeff was going with the billing system. All of this either documented or actually coded at least three months before the BillingNetwork patent was filled.

I submit that by running a version of FreeMED that contained only what was coded or planned as of 10-1999, and mere configuration of Apache and the FreeMED configuration file, using the versions available in 1999 (i.e. redhat 6.0) you can easily implement every aspect of the BillingNetwork claims, or designs that are largely equivalent (like using php’s direct mysql connection rather than ODBC), all using mere configuration changes. Moreover, you could find using other php projects (like postnuke) that were popular at the time, examples of all the configuration changes needed to make the modes of operation described in the claims work.

I would submit that anything that Jeff was reading at the time, (i.e. the php CMS that he would use for other purposes for instance) would serve as a basis for what should be considered obvious art at the time. Essentially the BillingNetwork patent covers a particular configuration for a web-based billing system. Not even the most intelligent configuration given the software that was available at the time. Jeff’s default configuration was actually a better design than the configuration required to fully emulate the Billing Network patent. This goes back to the habit of Patent Trolls in patenting half-baked technology. No one could run a medical billing practice management service by merely correctly implementing the patent, it would not actually work. But broken technology does not stop a Patent Troll from profiting from a patent, and Billing Network is a perfect example of this.

If my readers demand it (leave comments) I will be happy to give a blow by blow of the simple configuration changes that would have allowed the FreeMED “stack” to emulate exactly the design put forward in the patent. But anyone who understands the basics of the php/apache/mysql/linux stack know that 98% percent of what the patents cover are automatically provided in the stack itself. This was already true in 1999, which was php version 3. Moreover I can list about ten ways that such a configuration is not actually the “right way to do it” but then again, no one in the patent office cares about what actually constitutes best practices or does not when they hand out a patent like this. Sadly amateur design is not what is in question… just “originality” as compared not with what people were doing publicly in the open source community at the time, but with regards to what has already been patented. I think now the patent office is a little better about seeking sources of prior art form the Open Source community, but not by much.

So does FreeMED serve as Prior Art that invalidates the BillingNetwork patent? I think so, but it does not really matter. What is important is that this gives a very specific path for Open Source projects to be immune from attack by this particular Patent Troll. It means that all of the plans that FreeMed made are a safe harbor. As long as we do it in the way that FreeMED was  there is no way that the BillingNetwork “protection” can impact you.

Defensive Patents

Several people in our community have started to consider defensive patents. There seem to be two approaches to this issue. Patent Pools and more recently Defensive Patent Licensing.

Both of these rely on some basic assumptions. If Open Source projects will apply for and get patents for the designs that they use, then they will be able to for the patent office to acknowledge that the methods they use are “innovative”. You might have the patent office reject parts of your patent because they were “obvious”. Showing that your merely implement your own patented method or something that is “obvious”, is one of the few novel defenses against someone who is is attacking with patents but does not have any real business of their own. The pooling method is also a good idea for defense against big businesses with patents. When several projects have patents, and are willing to pool them against people who sue for patent infringement. The “sue you back” tactic would only work against companies with software patents who are actually in business. But “sue you back” does help to defend the community against one kind of patent attack. But “sue you back” is ineffective against patent trolls, who very often have no business at all, so they do not “infringe” on any ideas that might be an Open Source Patent Pool, because they are not “doing” anything at all. This is the reason why I think “We use our own patented designs or obvious designs” might be a good avenue to pursue.

It is deeply frustrating that the Open Source community would need to patent ideas in order to ensure that they could be freely available without charge to users and developers. However, at this point I am simply at a lose as to how to proceed. I am considering pursuing defensive patent strategies like this, and I know that other are too.

Patents frustrate Open Source developers

Hope this helps people to understand why we resent software patents in Open Source. At every turn in this story, my time was taken up, not defending a legitimate claim of patent infringement, but simply jumping through the hoops that some group who had a “related” patent thought I owed them. As far as I can tell, from a non-lawyers understanding of patent law combined with a working knowledge of building web applications, I was utterly, extremely, completely, excessively, non-trivially and enthusiastically -not- infringing the Billing Network patent. But Billing Network made it abundantly clear, even after we told them that I was not infringing, that I should still pay them a toll, because that what a Troll will always say to anyone who wants it to go away. I guess it could be worse; they could have been threatening to go after my knee-caps with a baseball bat.

Joking aside…

If original, innovative Open Source health information software is in the best interests of society, then software patents, as currently implemented  are a serious problem.

-FT

Update 12-01-10: It turns out that someone decided to go toe to toe with BillingNetwork and apparently won. HorizonMIS announced dismissal of a Patent Infringement suit brought against it by BillingNetwork. Bob Bortz called this to my attention and offered to share his experiences with others attacked by BillingNetwork, you should be able to get a hold of him through the contact information at the bottom of the press release.