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Abolish Software Patents? Be Careful What You Wish For

By Brian Prentice | August 08, 2010 | 0 Comments

The Future of Ownership - IP & IT Industry

Having just read two recent articles on why software patents need to be abolished, I thought it would be worth pointing out that there’s something a whole lot worse.

Trade secrets.

To be clear, I have no disagreement with the underlying principles of the anti-software patent argument. I share the view that innovation must be fostered. But the history of innovation in the IT industry is much less a story of the free flow of ideas than the free flow of labor.

Like the making of the American West, the IT industry is largely a story of pioneers. Where would we be today if Gordon Moore and Robert Noyce hadn’t left Fairchild Semiconductor to start Intel? And Fairchild Semiconductor only existed because of a staff exodus from Shockley Semiconductor Laboratory. Whether we’re talking about the founders of start ups or the staff they hire as they expand, it’s been people’s willingness – and right – to pull up stakes and start again that has allowed great ideas to manifest into great products and great companies.

And that is why I’m much more concerned about trade secrets than software patents. Inherent in the execution of a trade secret strategy is the limitation on the free flow of labor. It’s trade secret practices that are responsible for those non-compete and non-disclosure clauses in your employment contract.

And if you think that software patents and trade secrets aren’t intricately intertwined then think again.

The IT industry is now an economic powerhouse dotted with organizations and individuals with unimaginable wealth, power and influence. History has shown, time again, that this type of combination foster efforts to distort markets and maintain the relative power of the status quo. Particularly through the political process. This has happened with the industrialists of the late 19th century, the East India Company in the 18th century and with guilds in the middle ages, to name a few. I see disturbing signs of this occurring with the IT industry today.

Should software patents be abolished it won’t mean we’ll be working in the Elysian Fields of pure, unrestricted innovation. If history is our guide I believe that these moneyed interests will redirect their attention to protect their assets – which are largely intellectual property – by seeking to transform and fortify trade secret law. Particularly as copyright offers a diminishing capacity to protect assets (thank you open source software). The thought that powerful IT players would not respond to an abolition of patents without some reciprocal effort to protect their interests I consider to be naive. And the thought that all forms of IP protection will disappear is down right fantastical. Maybe that’s possible on Pandora, but not here on planet Earth.

Now, if a handful of influential media interests can alter copyright law through things like the Copyright Term Extension Act and the Digital Millennium Copyright Act and even get lawmakers to push their agenda on other countries through Free Trade Agreements I’m afraid I don’t hold much hope for the future of things like California’s ban on non-compete clauses once powerful technology lobbyists focus their attention on eliminating them. Just look at the lobbying effort that has gone on in the State of Massachusetts since they’ve considered outlawing such clauses.

If we all care about supporting innovation then we need to see software patents within a broader framework of IP rights. And we should be advocating action which is politically and economically realistic. I am happy to concede the limited monopoly of ideas if it secures the mobility of labor. The reverse is a truly frightening proposition.

That is why I think we should be focusing our collective effort on banning all restrictions on the rights of people to work where they want, when they want. As a concession to technology businesses we must allow software patents to exist. Such a position does not require one to accept the rubbish software patents in existence today or the broken system which granted them. Rather it necessitates fixing the oversight of the system so we can have a much smaller set of novel and non-obvious innovations that are discoverable and understandable.

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