The One Minute Case Against Software Patents

The cost of software patents

One prominent form of patent abuse is “submarine patents” – patents which lie dormant until someone discovers their similarity to a popular technology. The patent on the GIF image format surfaced a decade after its widespread adoption on the web. The Eolas patent on web browser plug-ins cost Microsoft $521 million and forced tens of millions of web pages to be crippled or redesigned. The RIM patent cost Blackberry $612.5 million and nearly shut down service to millions of people despite the patent itself being invalidated.

Software patents are becoming a major threat to the software industry. The risk of software patent lawsuits forces software companies to obtain defensive patents in order to obtain cross-licensing agreements and discourage patent lawsuits through the threat of counter- suits. An entire industry of patent trolls extorts businesses with bogus patents by taking advantage of the fact that many businesses prefer to pay licensing fees than go to court.

The problem of software patent enforcement

A software algorithm is an abstract description of a general way to solve a problem, such as a mathematical formula. Many algorithms are popular because programmers have found them to be useful in different fields. Algorithms, such as sorting lists and organizing shopping carts are widely recognized as non-patentable. But how can one distinguish obvious ideas from patentable ones? Does the application of an existing algorithm to a new field deserve a patent?

Software patents cripple software development

Software patents make software development risky because it is so difficult to know whether an idea has been implemented before. Over the years, millions of software programs have been written using billions of algorithms. Is it not feasible to have to study thousands of patents to make sure one does not violate the rights of others, while at the same time designing an integrated product. As a consequence, innovative companies are faced with the constant threat of discontinuing products or paying enormous amounts.

The success of companies such as Microsoft, Oracle, SAP, and Apple was not due to monopolizing certain features, but on continually improving on each other’s innovations. In a 1991 memo, 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…The solution is patenting as much as we can. A future startup with no patents of its own will be forced to pay whatever price the giants choose to impose. That price might be high. Established companies have an interest in excluding future competitors.

Copyrights are a superior alternative to software patents

The same legal principle that protects a book, song, or painting, automatically protects computer programs by forbidding copying or close paraphrasing of the code. Copyrights are straightforward to enforce because it is easy to identify what is being protected: a particular implementation of a set of algorithms to solve a problem, rather than the algorithm itself. They have the advantage of being automatic, free, and only useful against criminals. Copyrights allow the abstract ideas behind a software problem to be created by anyone, but protect an implementation of those ideas in concrete form, so developers who implement their own ideas do not have to worry that someone will put them out of business.

The protection of property rights requires standards that can be objectively enforced. Attempts to protect rights without the guideline of objective criteria will only violate real rights and nullify the benefit of protection.

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Filed under Economics, Politics

7 Responses to The One Minute Case Against Software Patents

  1. Pingback: Are patents stifling innovation in mobile devices? | Truth, Justice, and the American Way

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  3. I disagree entirely. I think strong patents help us in the end. These big companies would not have had these patent enforcement issues if they had paid the rightful owners for their ideas to begin with.

    Without strong patent enforcement the little guy will always have have to just sit back and take that patent infringement of the industry giants with no recourse!

  4. Allison Marie Saad :

    Without strong patent enforcement the little guy will always have have to just sit back and take that patent infringement of the industry giants with no recourse!

    The slogan that the state needs to protect “the little” guy needs protection from “big business” is Marxist propaganda. Laws which favor any discriminate against any part of society ultimately harm everyone . Discriminatory economy legislation only creates monopolistic benefits for established players against new competitors.

    In this case, the desire to “protect” small inventors, superficially discriminates against established companies. But this is an incomplete analysis. In reality, startups are faced with the large patent portfolio of established players and the costs of predatory lawsuits by patent trolls, from which they are more vulnerable. Patents create incentives which discourage potential inventors from creating real products and instead encourage them to go after the successful patent holders. Once successful, patent encourage companies to sue potential competitors out of existence rather than to continue innovating. Instead of being directed into invention and production, patents direct resources to lawyers and patent moochers. This is how we end up with outrages such as the $500 tribute Microsoft had to give Eolas for their browser plugin patent.

  5. Pingback: Patent Trolls, Gnomes, and Unicorns | Political Economy of Media

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  7. Pingback: Yet another Randian recants on IP

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