Blog post

Why We Need Software Patents

By Brian Prentice | July 14, 2009 | 37 Comments

As an IP-intensive industry, IT is facing a unique challenge. We’re in a state of IP flux. There is intense debate over how we define and allocate the assets of an industry generating well over US$3 trillion revenue globally.

My biggest concern with this debate relates to software and business methods patents. Specifically, that we can somehow discuss their validity as though they exist in a vacuum – that they’re not connected to other intellectual property vehicles such as copyright and trade secrets.

From a legal point of view that’s a valid perspective. From an economic point of view that’s a definite mistake. I would put it to you that the single biggest factor driving the increased use of software and business method patents are economic decisions resulting from the evolution of copyright.

It is critical to understand that copyright is in the middle of a transition in information technology. It is becoming primarily a mechanism to support community-owned assets. It is of rapidly diminishing value in protecting entity-specific assets. And that can be put done to one simple factor – Open Source Software!

What’s been happening over the last decade is simply a re-alignment of asset classes to mirror that reality. If you hope to have a viable, long-term commercial IT concern you had better be able to protect your ideas from being copied, not just the specific codification of them. Patents do that. Copyright doesn’t.

So, how do we allow entity-specific assets to be protected? That’s really what’s being debated here. The copyright horse has bolted and will never return. What then happens if software and business method patents are removed as an option? It will be like trying to burst a balloon by stomping on it only to watch the air shift out to the ends? All the focus on IP protection will move to the only option left. Trade secrets.

All IT providers are focused today on managing their trade secrets. But what deeply worries me is how they’ll respond if wholly reliant on it. I feel pretty confident in predicting that the growing lobby power of the IT industry will shift, like Sauron’s all-seeing eye, towards trade secret legislation. They’ll want it beefed up and armor-plated – just like the media industry did with the DMCA. And they’ll do this because there is serious money at stake. The market capitalization of these organizations is tied in no small part to their IP, and if its at risk, tech CEOs will do what it takes to protect it.

A trade secret-obsessed IT industry will be focused on one thing – controlling the flow of labor between organizations. I could well imagine lobbying efforts to assure the universal enforcement of non-compete clauses in employment contracts. I think we’d see a lot more cases like Mark Papermaster and Kai-Fu Lee. Of course, if you’re not top talent you can forget about your hiring employer footing the legal bills. Who knows – IT could end up like the FIFA-governed football (soccer) industry which requires transfer fees to be paid when contracted players move between clubs.

Let’s remember something – patents are a trade-off. An inventor gets an exclusive right in exchange for the public disclosure of her idea. A functioning patent system (which we don’t have) supports the proliferation of innovation. Trade secrets, on the other hand, don’t. Software patents aren’t perfect. There are serious issues which must be sorted out. But in a world where copyright is evaporating as a way protecting anything other than community-owned assets, software patents are a whole lot less dangerous than the alternative – aggressively pursued trade secret protection muscled up through political deal making.

I would much rather we embrace software patents and water down trade secret legislation than the other way around.

Comments are closed


  • valas says:

    Your argument is built on a premise that patents are trade-off and that they are necessary to protect an inventor. If that were the case, we would see lack of inventors and lack of innovation in software industry, which is obviously not the case. Today’s general public and industry can hardly keep up with innovations unraveling around, therefore, I think, it is disingenuous to imply that software patents would benefit general public in any way.

  • Brian Prentice says:

    Hi Valas – actually, my argument is based on the premise that patents are interconnected with other forms of IP. Therefore, their benefit, or detriment, to the general public can not be considered in isolation. My argument is also based on the premise that inventors seek IP protection in order to secure commercial benefit from their efforts. IP mechanisms may change, but the desire to make money from innovation doesn’t.

    To be clear, I’m not implying anything. I am expressly pointing out that an IT industry without patent protection will be an IT industry increasingly focused on trade secret protection. So, if we want to debate what’s in the best interest of supporting innovation, let’s do so on the relative merits of those two options.

  • Jonas Maebe says:

    I think this premise is invalid: “If you hope to have a viable, long-term commercial IT concern you had better be able to protect your ideas from being copied, not just the specific codification of them.”

    Patents can obviously be a nice tool to help thwart competition (although the competition can do the same to you, unless you’re a basically non-producing entity, or a large company vs an equally large or smaller company), but I disagree that being able to patent the basic concepts underlying your software is a requirement in any way to “have a viable, long-term commercial IT concern”.

    See for example this German survey (by one of the Fraunhofer Institutes) from 2003, slides 15 and 16: (the primary sector are software development companies, the secondary sector are traditional industries developing software for internal use such as machine control).

    These companies mention many other business tools besides patents (and copyright) that are much more important to maintaining their business success. The 2003 FTC survey came to similar conclusions about the software sector, and even to some extent also for the computer hardware and semiconductor sectors (see ).

    I also don’t understand how the increased usage of copyright in the context of open source software inherently diminishes its utility to cover closed source software. Where does this relation come from?

    As far as I understand, the main reason that companies increasingly work on and use open source software, is because it’s a good way to share (and thereby reduce) costs for basic infrastructure that, even if done exceptionally well, gives little or no competitive advantage by itself.

    As a result, they can focus more resources on stuff that does give them a competitive advantage. For this category, they often can still use copyright in exactly the same way as before, witness e.g. Apple.

    In fact, I think that the only thing that has severely weakened copyright protection of software over time is exactly the proliferation of software patents. In their absence, copyright guarantees that a company can sell/distribute software that it produced itself. With software patents in the picture, software copyright guarantees very little in terms of business value (only that people cannot copy it, but who cares about that if you’re not allowed to distribute it yourself in the first place, or at least not without paying rent seekers?)

  • FredericBaud says:

    @Brian you’re not answering @valas’ point. You’re saying that by removing patents we risk seeing people move to trade secrets and that it may reduce general wealth. But @valas rightly points to the fact that without the incentive of patents or trade secrets (e.g. through open source) many inventors do contribute today a lot. Which means that we don’t need to strengthen patents to increase the incentive and that the scare you’re describing is very hypothetical (people contributing to open source reject patents & trade secrets altogether).

    On the contrary, completely removing the patent, business methods and copyright system for software will unleash increased opportunities in software recombination (think of a better Windows system that could be legally reverse engineered) and creation of additional wealth for the community at the cost of disappearance of a rent for only a small fraction.

  • Nick Gall says:


    I gotta agree with the thrust of @valas and @FredericBaud’s point: you’re assuming that patents spur innovation. This has been a hotly debated issue for many years, with many “studies” of the correlation between patents and innovation. Here’s a nice summary of some of those studies: . My impression over the years is that there is virtually no evidence that patents spur innovation.

    I also don’t understand your argument about trade secret vs patent. Most SW companies use both. When patenting “software”, they attempt to reveal as little about the actual source code as they possibly can. That seems like the worst of both worlds to me.

    The software market lived quite well without patents for decades. SW patents have not spurred innovation. And open source demonstrates that innovation does not need the protection of trade secrets OR patents.

  • Brian Prentice says:

    Hi FredericBaud – thanks for your thoughts. I do appreciate you adding to the discussion.

    IP is not strictly a function of innovation. It is also about a system of rewards and wealth distribution. So I’m not trying to avoid Valas’ point. I’m simply trying to add that dimension to the broader debate on patents.

    You’re right to point out that many inventors create without the incentive of owning what I’m calling an “entity-specific asset.” But the vast majority don’t. In fact, one of the most notable dimensions of open source software is the amount of it being created by traditional vendors as a supplementary component of a proprietary software strategy (think Oracle’s ongoing engineering work in support of Linux). The bottom line is that there’s value in software. When there’s value there’s money. When there’s money there will be struggles for the manner in which it is distributed through the industry and society in general. Patents need to be considered in this context and also in relationship to other IP mechanisms.

    As per your broader point that removing patents, copyright and trade secrets will increase opportunities for software recombination I will respectfully disagree. I believe that society has a long accepted principle that people can expect some form of protection for innovating because society benefits from them doing so. I don’t see why that principle shouldn’t apply to software.

  • Brian Prentice says:

    Hi Nick,

    First things first – I do not believe we would get a fair assessment of the value of software patents by considering their relative absence through the initial growth period of the packaged software industry. They need to be considered in the context of the evolving industry – one marked by the emergence of highly profitable software behemoths.

    Second, rather than focus on the impact of patents on software innovation let’s focus on something which I think we can agree on. I would suggest that the single biggest driver of software innovation has been the relative free flow of labor between organizations and from existing organizations into start ups. The point I’m trying to highlight is that an industry entirely reliant on trade secret protection – the outcome should there be no patent protection or effective copyright protection – will be an industry highly motivated to stem the free flow of labor.

    This is a key point that I think is missing from the software patent debate – how do entities with established revenue streams and existing market capitalization respond when faced with their absence. And, as part of that question, we should be asking whether the resulting outcome is worse than the current situation.

  • PL Hayes says:

    I’m afraid I don’t understand your arguments either, Brian. You rightly identify economics as the proper disciplinary context for an examination of this issue – and surprisingly many don’t – but beyond that your post seems entirely disconnected from the innovation economics field. As Nick Gall suggests, it is an active area of study and debate¹ and there is even a (not incomprehensibly specialist or excessively large) body of literature relevant to the specific areas of interest here.


  • Anshul says:

    As mentioned above – Software industry has provided the business with the ‘open’ model. Thus bringing down barriers to entry and democratizing software development.
    If Patents are bought in place – it would possibly mirror pharma industry of today. heavily consolidated and focusing only on incremental innovation.
    Also I do not understand how is patent going to stimulate innovation? creating new software does not require years and years of investment like pharma. Speed to market is the key.ricker’

  • FredericBaud says:

    @Brian, the core-assets theory claims that organization need to accumulate specific (rare) resources to create a competitive advantage that will let them capture value and sustain their activity. That does not mean that you need to create artificially rarity on software through patent laws to have organizations producing software, as RedHat illustrates it, you may have organizations developing rare capacity in assembling and maintaining open bricks to create a viable model.

    When you say there is value in software which implies money, you’re missing a critical point: exchange of value can be non-monetary, money is necessary only when there is rarity, and this is to solve exclusive access to the goods subject to the exchange. In the field of ideas and software, rarity was once again artificially created.

    You’re talking of rewarding innovators, which from the economic perspective is only a money transfer and is neutral as long as it does not destroy wealth or prevent additional creation. The key point in patents is incentivization, which means allocating share of the additional wealth the innovator has helped created and that would not have been otherwise. As amply commented here, there’s no need for this.

    IP laws, which were crafted by our forebears in a world where ideas traveled relatively slowly because of the means of communication from that time, insisted on local creation. Today, IP laws prevent massively the possibility to re-use and recombine ideas, resulting in a massive opportunity cost. In the particular case of software, IP laws should be entirely disbanded to free the creation of value we can expect from recombining legacy software. It should be noted that Open Source just recreated everything on a clean slate, free from government intervention. It is time that the authority realize how the outdated IP laws keep destroying value in other sectors of our economic life.

  • Brian Prentice says:

    Hi PL Hayes – good to hear from you again. I’m not sure how to answer your question. I’m hoping that maybe my responses to the other comments might help clarify my position.

    I’m not sure where I’ve gone astray here. This blog was not meant to discuss the role of software patents as a mechanism to for or against innovation. I was simply trying to explore how IT providers would respond if software patents were no longer available given the diminish value of copyright to protect software assets. Based on the stream of comments I’m getting I think I failed to get that message across.

    Maybe the problem is with the title? Perhaps I should have gone with “Software Patents – If You Think They Suck Consider the Alternatives.” 🙂

  • Brian Prentice says:

    Hi Anshul – please keep in mind that software patents are already in place. Nor are patents granted on the basis of the time and investment necessary in bring a product to market. Patents are granted based on innovation – specifically one that advances the state of the art in a novel and non-obvious way. I do agree that open source has lowered the barriers to entry in many cases – but I’m not sure how that’s material to what I’m talking about.

    Thanks for the thoughts. They are appreciated.

  • PL Hayes says:

    Hi again Brian – good to be here, thanks.

    Actually, I think that given the strikingly contrarian picture you’ve drawn, in particular details and overall, as the base for your exploration of the likely consequences of non-availability of software patents, I think you should’ve gone with something like “Sequential Innovation, Patents and Imitation – the Antithesis”. 🙂

  • Brian Prentice says:

    FredericBaud – I think we are on two very different philosophical wavelengths. That’s pretty common in the software patent debate so I really appreciate your willingness to have a civil discussion of those differences.

    I think what you see as artificially created scarcity I see as a property right granted for innovation. I would guess, given your view that IP laws should be entirely disbanded, you don’t like that idea. OK, fair enough. But I am perfectly comfortable with that concept as is the vast bulk society (note – I’m talking about patents in general, whether they apply to software is a separate discussion).

    I would also strenuously disagree with your assertion that “IP laws prevent massively the possibility to re-use and recombine ideas, resulting in a massive opportunity cost.” First off, copyright doesn’t stop anyone from recombining “ideas” – it stops you from lifting someone else’s code. Patents, if they were properly administered, would create few obstacles in recombining because truly innovative ideas (ones which are novel, non-obvious and useful) are few and far between. The problem is the patent system is failing and that is resulting in large numbers of poor quality patents. You might want to look at the general thoughts of Professor John Duffy of George Washington University Law School on the subject (

    Our forebearers created IP not because of the speed by which ideas flowed (which wasn’t as slow as you are hinting – see the book “The Great Upheaval”) but to deal with things like the loss of an author’s income due to the rampant unauthorized re-publication made possible by the printing press or to create equity and transparency in state-granted monopolies. While the technology has advanced, the essence of the issues that our forebearers sought to resolve through IP is as relevant today as they were back then.

  • Brian Prentice says:

    PL Hayes – your title may be more accurate. But mine is much pithier 🙂

  • FredericBaud says:

    @Brian, I don’t think we have a philosophical divergence. My understanding is that we both seek “maximal creation of wealth for the community as a whole”. We actually differ on the solution.

    Your position is that Patents:
    – spur innovation from the would-be grantees
    – don’t detract combinatorial innovation from individual contributions

    My position is that a system without IP laws:
    – doesn’t diminish innovation from contributors
    – can create extensive innovation through easy recombination of individual pieces

    I believe that the two positions can be assessed through fact-based analyses. My view is that the Open Source is providing a lot of evidence for the second position.

    It seems there is at least one thing we do agree:upon: that the current patents landscape is a mess! Obviously we won’t agree on what we can do from there. 🙂

  • FredericBaud – OK – let’s agree that we differ on the solution. But I think you need to better understand that my perspective is even simpler than you’re pointing out. Basically, software should have a consistent application of IP laws. Many of the arguments I hear against software patents are actually arguments against patents in general. My view is that society has, over centuries, establish things like patents for very good reasons. And I fail to see the logic on why those principles don’t also apply to software.

    You also need to remember that open source itself is an enforceable copyright agreement. If there are no IP laws there will be no open source.

    But you’re right about one thing – we agree that the patent regime as current managed is a mess.

  • Anon says:

    Valas said:
    >>> “Today’s general public and industry can hardly keep up with innovations unraveling around, therefore”

    We’re actually not seeing that much innovation. Building a new website application is not innovative – you’re simply using tools to build something they were intended to build.
    You are confusing the rapid development cycle and continuous churn of applications as innovation. This is more a reflection of the business realities and the need to be relevant with the current technology. Innovation are more game changers, not the latest web application that uses HTTP & HTML to do the things it was intended to do.

    It is difficult to really understand innovation until you’ve truly struggled with finding a new answer to a problem – or discovered a problem sitting right under everyone’s nose and they didn’t see it. Right now patents are the ONLY way to protect small or independent companies/innovators in software, we need them otherwise the people putting up their resources (time, $capital, loss of opportunity elsewhere) would just get a $100k job developing applications for another CA.

  • Anon says:


    What is the most innovative thing that’s happened to the Internet in past 10 years? Likely you’d say Google. Google has their core technology under patents. Now compare to the most innovative open source technology to have happened to the Internet – it just doesn’t compare, there is nothing close to a Google, Apple iPhone, RIM BlackBerry which all protected their investors with patents.

  • Hi Brian,

    1) I would slightly disagree that the patent system is a mess. On the surface it is a mess and does provide a cost – but I would argue that cost is beneficial in the long run – especially to small players.

    Currently, patents are the best protection for investment of resources that a small or independent entity has available. For about 3 months of investment in time a small software guy can get a pretty good handle on what patents are about and how they can protect the small guy. Add to that the cost of filing a Provisional patent application – if you get a patent lawyer to review then maybe $1,500 to $5k depending on location (read: Silicon Valley firms are expensive and in my opinion not worth the added costs). That buys you 1 year of protection for you to go out to companies and/or customers to see if there is a market for your potential innovative product. If you feel there is no interest (perhaps valuable feedback) then you can walk away and move on without a big loss.

    Without patents, the other option to talk to a company is to get them to sign an NDA but any half-smart manager/executive will not sign an NDA in fear that his engineers are working on the same thing and that by signing an NDA will get their company into serious trouble.

    Toss in not-invented-here (NIH) syndrome where engineers of a larger firm will provide inertia for someone else solving their problems (e.g. why is the employee useful if an outsider is solving their problems) and without patents it’s difficult for the small guy.

    2) Next consider the removal of software patents and what it would mean for the large players (e.g. a Google, Microsoft, Apple, etc…). It would instantly and completely change their business model – and against innovation of any kind. They would change from spending a portion of revenues on R&D to instead cut 90% of their R&D and instead increase their marketing personnel to now monitor and scan any smaller competitors for features or products that would increase their own marketshare, then those would be copy-and-pasted into their own products or service pack updates. In fact, this copy-and-pasted would likely be outsourced – clear instructions could be provided to Indian or Chinese companies that would say “Look at feature XYZ from competitor Acme and write this language ABC and merge into Clearcase source code branch Product_10.21”.

    A large, entrenched software company with existing companies would be most efficient to leverage their brand and/or marketing muscle and/or deployed customer base. These are all areas that the little guy has NO CHANCE IN HELL in competing. For this reason alone, software patents are crucial to innovation because innovation happens at the small guy in his garage/basement level and not in the large company. Google’s innovations themselves were either at their start and have since been more and more purchased from outside (Keyhole->Maps, Postini->security, etc…).

    So a patent is just another business tool, it has its uses when it can be effective, but it can also be used ineffectively (as the example says: 95% of patents never make the owner/inventor any money).

  • Anon – great comments. They are very much in line with my perspective. I hope you don’t mind if I add two thoughts.

    First off, your comment to FredericBaud about Google and their patents is spot on. But it is also indicative of the nuanced interaction of IP mechanisms that is becoming pervasive in the IT industry. Specifically it is to blend community-owned assets (covered under copyright) with entity-specific assets (which currently is patent protection) to create a marketable solution. This is what Google has done – blend the patent-protected PageRank algorithm with an open source infrastructure. It’s also what Apple has done as the iPhone-related patents are combined the open source Linux kernel. Even Microsoft is doing this! Consider IE8.

    This trend is unstoppable. In fact, I would suggest that this blended asset model will “jump the fence” – it will start becoming a common approach across many industries outside IT. The broader point of this blog post should be put in this context.

    BTW – it should be noted that it is actually Stanford University that holds the patent for PageRank. Google is the exclusive assignee. So, for all those who believe it is big software companies and “patent trolls” pushing software patents, think again. It’s also higher education.

    I am also in absolute agreement with your comment to Valas. My biggest criticism of software patents is not their existence. Rather it’s that the “rapid development cycle and continuous churn of applications” you mentioned ends up becoming patented software. If the system was working as it should, there would significantly smaller numbers of high quality patents. That, by the very nature of innovation, would be few and far between. And that, in turn, would make navigating existing patent holder’s rights much easier.

  • Small Software Guy – it’s great to get some insight from someone “in the trenches.” I have to ask something – as someone trying to build an actual business what do you make of FredericBaud’s open software recombination perspective?

    Also, I want to make sure you’re clear what I mean when I say “the patent regime as current managed is a mess.” All I’m saying is that there are serious shortcomings in the USPTO which results in too many patents being granted that shouldn’t be. That doesn’t mean I think software patents should go away – I don’t. I just want fewer, high quality ones. If that happened we would have less dependence on the courts to determine a patents validity and that will lower costs and create greater confidence.

    Thanks again – great insights!

  • FredericBaud says:

    @Anon, actually, speaking of the Internet and the greatest innovations, I would have cited another IP (the Internet Protocol) and the WWW – which both created immense wealth, just because they were not proprietary. But I agree they do not fit within the last 10 year boundary you set, but neither do the companies you cited. But – not to eschew your question – my point is that we do not look at the sum of the market values of different companies (which represent the value that has been captured by certain actors), but at the total value that has been created for the entire community.

    @”Small Software Guy”, it’s probably true that patents are a way for big companies to outsource IP production to small entities, but I don’t think this is at the benefice of the latter. Given the chance of success and the prize big companies will pay, innovators have probably a better expected return when working for these big companies (but less fun, I totally agree with that).

    @Brian, I don’t necessarily want to go into a technical discussion in this thread on the interaction of copyright laws and the open source licensing scheme but we are talking of contractual agreements that have never been asserted in court – to the best of my knowledge – and could work without copyright laws.But again, this essence of the discussion here, I think, is the advantage of having a “commons” approach versus a proprietary ownership in the production of software, for the good of the entire community.

  • Brian Prentice says:

    FredericBaud – I’m not sure why it’s necessary to create such a sharp distinction between a commons approach and a proprietary approach. The two co-exist now and should continue to do so. The argument that allowing proprietary software to exist eliminates the commons approach is a false dichotomy.

    Actually, open source licenses have been tested in court. Please see this link

    Oh, one more thing. As per your comment to Anon, how is it that you would actually measure that “total value that has been created for the community?” Who’s the community? And why is “the sum total of the value that has been captured by certain actors” not connected with value provided to the community?

    Thanks, as always.

  • PL Hayes says:

    “You are confusing the rapid development cycle and continuous churn of applications as innovation.” –Anon.

    No – that *is* innovation. You are conflating innovation with the one or more inventions that may facilitate it. Inventions (patentable or not) can lead to zero or more innovation. Making the (perhaps subtle) distinction and getting the definitions the right way round are important – particularly when talking about patents (at least if one intends to read some of the economics literature†).

    “Right now patents are the ONLY way to protect small or independent companies/innovators in software, we need them” –Anon.

    That and similar assertions/arguments made in comments following it are simply wrong/fallacious. Several other serious (not just definitional) errors have been made: the – perhaps unwitting – sectorial focus on a mere 5% of all software patents; post hoc ergo propter hocs compounded by (implicit) invalid extrapolations; the (highly ironic) formulation of hypotheses about the relationship between patents and R&D which *contradict* empirical evidence they should be attempting to explain! …

    † There is a freely downloadable primer here:

  • FredericBaud says:


    Thank you for the link. It actually illustrates – in my view – the dichotomy:
    commons have been able to appear, “despite” IP laws, while my position is that the legal framework should instead promote the appearance of commons (and we shall then see what happens to proprietary legacy software).

    The distinction between created and captured value in my comment to @Anon refers to the economic concepts of price and economics surplus (see for a simple presentation around the concepts of consumer and producer surpluses). To paraphrase Adam Smith, just bear in mind that the first glass of water you drink everyday has enormous value for you (life & death), while its price is much lower and the profit of the utility is only a fraction of this price.

    Going back to the Internet Protocol, it is obvious that it created a lot of value for the end-users (consumer surplus), while certainly contributing to the increase in market capitalization of a few firms (producer surplus) and in the end creating considerable wealth for the entire community (consumer + producer surplus).

    It is true that consumer surplus is very difficult to measure or even assess. But it nevertheless does exist, and far surpasses producer surplus in many situations. The role of politicians is to balance the two and try creating the maximum surplus for the entire community. Unfortunately, producer surplus is easier to measure (profits) and this explains why politicians often are more compelled by arguments of companies like majors, claiming losses due to piracy, without taking into account the value created for all the people that listen to musics they would never have paid for at current prices. But I would not want to stray on the subject of music, when the case for software is enough (and very similar).

  • Brian Prentice says:

    To Boycott Novell – it is my sincerest hope that one day you’ll participate in this conversation in a meaningful way. Who knows, maybe you have a perspective that will enlighten myself and those that read and comment to this blog. My commitment is to engage with you in an open and civil manner. However, participation in your conspiracy theory is beneath the dignity of this blog.

  • Brian, you asked my opinions on “FredericBaud’s open software recombination perspective?”

    My perspective is that much of the open source software community has a narrow view of the business world. Believing that a few “tweaks” such as removing patents will have no affect on how businesses operate is in my opinion short-sighted and idealistic. Abolishing software patents will greatly affect software world as I have described it (e.g. massive cutting of R&D and moving towards leveraging their branding and/or marketing and/or existing deployed software base where we know customers have great inertia moving from one platform to another).

    Keep up the good articles Brian!

  • FredericBaud:

    IP, WWW, and other related technology were not created in a vacuum – they had significant resources (read: $money and time) invested. Software patents provide small innovators a mechanism to protect their investments (time, money, lost business opportunities elsewhere (such as a regular salary working for a corporation)). Please don’t take away the only protection I have against the Google’s and Microsoft’s, otherwise I’ll need to go back to slaving away working in a Dilbert world – but at least I’ll get to leave at 5pm!

  • FredericBaud wrote:
    >>> “@”Small Software Guy”, it’s probably true that patents are a way for big companies to outsource IP production to small entities, but I don’t think this is at the benefice of the latter. Given the chance of success and the prize big companies will pay, innovators have probably a better expected return when working for these big companies (but less fun, I totally agree with that).”

    ahem – by “prize big companies will pay” – do you take into account the lost hours every week on bogus meetings, the zero loyalty to employees and layoffs at any chance, working on dead-end or unchallenging projects that make Dilbert a reality, etc…? I lived that “prize” and would rather work every night till 1am to avoid going back to that – at least I’ll see my layoff coming.

  • Brian wrote:

    >>> “All I’m saying is that there are serious shortcomings in the USPTO which results in too many patents being granted that shouldn’t be.”

    I still disagree, many things are obvious in hindsight – not just patents. The system the USPTO has built over centuries is very refined, there are over 7million patents and perhaps a dozen that have caused uproar. Every system has its flaws, but changing an entire system over such a miniscule amount is not the way to go. Besides, even if a patent is awarded, it can still be taken down afterwards and/or defeated in court (such as in an infringement suit).
    Any changes need to be weighed against the affect on what patents were created for: to reward innovation. There have been significant changes to the patent system the past ~3-5 years – all in favour of larger companies – the same larger companies that don’t have innovation as their main competitive advantage (they’ve got marketing $muscle, brandname, deployed customer base as more important advantages).

  • I agree with the perspective of the article that the US would be better off with stronger patents for software and weaker trade secret rules. It has been common to use the end user license of software to attempt to obtain stronger rights in the software than the company would receive under the patent laws. And as pointed out none of these restrictions have the advantage of the disclosure and diffusion of knowledge provided by the patent system.

  • Brian Prentice says:

    Small Software Guy – I think we will have to disagree on our perspectives of the USPTO. Keep in mind that I’m advocate of software patents. But I’ve come to see that many of the arguments against software patents in general are really manifestations of very valid frustrations with the quality of patents which have been granted.

    I would disagree that there have only been a handful of serious patents issues. If you glance through some of the uncontested patents you’ll find large numbers which have been granted on the assumption that a software implementation of a non-novel and total obvious solution is an innovation. Even in the infamous Bilski decision Justice Rader made exactly this point – that particular machine and transformation tests were unnecessary to deal with that case because it could have been simply thrown out on the basis that the Bilski’s claims were obvious.

    And while you’re right that these can always be contested in court that’s exactly what we want to avoid. The cost of contesting an infringement action is so high it makes sense to settle. There is now a healthy trade in cross-licensing which, IMHO, is more a market in litigation avoidance than commercializing innovation.

    This is not done with malicious intent by the USPTO. They are seriously underfunded. Examination times are paltry. Skill sets need to be updated to deal with this new technology domain (new by PTO standards that is). The system you are describing as “refined” is in fact unable to deal with the onslaught of patents – that’s why the USPTO is exploring new concepts like Peer-to-Patent. But nothing has been done to extend these concepts for sustained systemic change. Please take a look at my comments on this topic –

    Other than that issue, I think we’re largely on the same page.

  • Brian Prentice says:

    Dale B. Halling – thanks for the comments. I’m glad to see someone has connected with my key point 🙂

    BTW – I would highly recommend that the people commenting here take a look at Dale B. Halling’s blog – specifically the post on “Scarcity and Intellectual Property.” It’s very relevant to the discussion – particularly the comments from FredericBaud.

  • PL Hayes says:

    “I would highly recommend that the people commenting here take a look at Dale B. Halling’s blog – specifically the post on “Scarcity and Intellectual Property”


    Halling’s article begins by incorrectly identifying scarcity as the salient characteristic of intangibles (instead of non-excludability and non-rivalry) and uses it to construct and dismantle an elaborate straw man argument. Other fundamental and fatal errors, such as the classic post hoc concerning the association of historically strong legal protection with high rates of innovation, appear before the article concludes with an extraordinary, evidence defying assertion and an absurd prediction.

    “I’m glad to see someone has connected with my key point”

    Rational, empirically informed mainstream “dismal science” has connected with it too, Brian – as I’ve tried to point out.

  • PL Hayes says:

    (For clarity’s sake that should really be “(non-)scarcity” rather than “scarcity” in the above).

  • FredericBaud says:

    @Brian, I think the “other side” did get your point, and discard it from my standpoint:

    1) implicitly, by saying that by diminishing protection, wealth will be created means that I don’t credit the threat of trade secret as destroying more value than the one created by loosening up current laws
    2) explicity, when I made the point that making reverse engineering legal would alleviate any potential damaging impact trade secrets may have (that was illustrated with the value that could be created by letting anyone modify and extend Windows).

    @”Dale B. Halling”’s post fails to express any statement that could be tested through fact-based analysis, and could then confirm or infirm his point of view. In this respect, it would seem like a logical thing to do to explain why open source do exist and not retort to a dooming prospect of comparing it to “socialism and communism” (even Mr Steve Balmer has stopped comparing open source to cancer). In fact, it is the point that Free Markets will benefit from Free IP Laws.