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Do Software Patents Stifle Innovation?

A debate has been raging about the usefulness of the US patent law governing software patents

Of late patents around mobile technologies have been in the news. Four high profile news items are (1) Oracle suing Google for Java patent violation, (2) Apple and Samsung fighting each other in different parts of the world, Microsoft, Apple, Rim and others jointly buying Nortel patent library for $4.5 billion and (4) Google buys Motorola Mobile and gets 17,000 patents.

This is only the tip of the iceberg. This diagram from Reuters shows the complex battlefield of mobile patent and significant portion of these patents are for software.

In the sideline of this patent war, a debate has been raging about the usefulness of the US patent law governing software patents. Point to note here is that each country has a different patent law. For example, in India, software per se cannot be patented.

If you want to have a quick look at what patenting is all about have a look at -

ABC of patenting – why, what and how

What is the debate on Software Patents about?
In US the patent law is expected…

“…to promote the progress of science and useful arts, by securing for limited time to authors and inventors the exclusive right to their respective writings and discoveries…”

However, the distractors claim that the software patent law does the exact opposite – it stifles innovation. They claim that there are enough scientific studies to prove this point. With so many patents around it is practically impossible to write a piece of software and feel confident that it does not violate any existing patent!

Here is couple of references to those studies:

There is also a Wikipedia page which discusses this topic.

For and Against – Three Arguments each

For:

  1. Public disclosure: Since patent must publicly disclose the invention it is expected to accelerate software development by making previously unknown and not obvious software inventions public.
  2. Allow the inventor to peacefully perfect the invention: Since every invention requires time and effort to perfect, the patent provides protection without the fear of imitation.
  3. Encourage the inventor to additional use to maximize return: The inventor will have incentive to search for further applications of the patented software.

Against:

  1. Patent has never been an incentive for a Startup or VC: Survey of software entrepreneurs and venture investors indicate that they would have invested even without patent protection.
  2. Defensive patenting locks up invention: Companies patent everything they can think of that might be relevant to their business and then implement only a fraction of those things, which creates a barrier for innovation.
  3. Deterrence to work on innovative idea: Companies may be reluctant to invest in a new idea because of the fear that the work may infringe on some existing patents.

What about economic benefit?
Pro
: For small companies patent should (1) provide protection to market their products, (2) increase the valuation of the company and (3) combat large players through patent law suit.

Con: The process of patenting is very expensive and only a small percentage of patents land up making any money. Small companies aren’t very well protected by patent because the damages awarded may be very small. It appears that the economic benefit goes to the “Patent Troll” who buys patents just to fight law suit and claim infringement.

Is Copyright not sufficient protection for software?

Sufficient: Copyright is the right of an author of any software to prevent others from copying their creative work without a license. Copyright protection is given automatically and immediately without the need to register, though registration strengthens protection. Often copyright infringement is relatively easy to determine.

Insufficient: Patents protect functionality. Copyright on the other hand only protects expression. Substantial modification to an original work, even if it performs exactly the same function, would not be prevented by copyright. To prove copyright infringement also requires the additional hurdle of proving copying which is not necessary for patent infringement.

Inventions aren’t created by a single genius
Current research suggests that inventions are created from a bunch of people competing and collaborating as the world changes. That makes the whole theory behind our current patent system is flawed. The current patent system is built around the idea that lone genius individuals need to be incented to make great leaps forward.

See this paper – The Myth of the Sole Inventor

If you believe in FOSS movement then it is very difficult to support software patent
Let me just refer to this post – Why Patent Injunctions Are Even Worse For Open Source.

Finally…
Some believe that…

Software = Algorithm = Mathematics … so it cannot be patented

Related Article

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Udayan Banerjee is CTO at NIIT Technologies Ltd, an IT industry veteran with more than 30 years' experience. He blogs at http://setandbma.wordpress.com.
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