Software Patents Shrugged

In the latest film installment of Ayn Rand’s influential novel, Atlas Shrugged, the government has taken the drastic step of seizing all patents, as well as copyrights, for the public good, under the so-called Fair Share Act. Although the U.S. government has not officially taken such a drastic step, some economists and advisors have recently advocated the abrogation of patent rights for industries involved with software. Indeed, some argue that software patents are deleterious to the public good.

A patent is a bargain or contract with the government designed to foster innovation. The United States’ founders determined that technological advancements should be rewarded, and chose to adopt a patent system as the framework for such social enhancement. The idea is that an inventor would have some incentive not only to conceive of an invention, but also to reduce it to practice — i.e., allow the concept to enter the market instead of keeping the technology secret.

Tricky Business

From the earliest Venetian patents of the late 15th Century to today, the patent system has given inventors a mechanism to protect their ideas. Without protections, rampant copying would ensure and inventors would have less ability and incentive to contribute.

Modern technologies are complex, far beyond the technologies of 1790, when the first patent laws were enacted in the U.S. What would the founders think of smartphones and the software engines therein?

Software is not a physical, tangible thing, although it certainly controls physical things. From the earliest beginnings of software in America, inventors have tried to capture the code in a patent. In most cases, this is no trivial task. Crafting a patent claim, the heart of the exclusive right, can be tricky, especially in view of the various Supreme Court cases that have shaped the issue.

For example, before leaving the Court, Justice Stevens attempted to gut software patenting, particularly software patents involving business methodologies. But for Justice Scalia’s grave concerns about the adverse effect of this drastic measure, Stevens would have led the majority instead of being a vigorous dissenter. The Supreme Court is currently evaluating the issue again.

All new technologies are controversial. From the sewing machine wars of the 1800s, to Alexander Graham Bell’s defense of the telephone to the Wright Brothers’ airplane litigations, any new technology takes some time to settle down — i.e., the industry players establish their pecking order through patenting and other means. This process may take decades.

If It Ain’t Broken

We are living in a time of stupendous technological innovation. The converging and emerging technologies of today leave us dizzy, and the future will leave us amazed. The many players in the IT/telecom arena are now fighting to establish market share, and are engaging in a pitched battle in court and elsewhere to keep or obtain customers.

Chief among the tools employed in these battles are patents. Instead of recognizing that the patents themselves are not to blame for these wars, the public is fed a data stream of negativity about the patent system, particularly about software patents. Furthermore, considerable negativity and misinformation extends to many biotechnological patents as well, particularly those in the growing and critical genomics area.

It is imperative that the innovations of today and tomorrow be fostered. America is at the forefront of innovation in a wide range of technologies. U.S. software engineers are the best in the world, and American software runs virtually all of the world’s computers. The U.S. biotech industry is also at the top. American biotech innovation is growing, especially with the advent of genomics and use of computers to better decipher human ailments.

Americans benefit greatly from the patent system. The world benefits from the innovations it fosters as well, because inherent in the patent system is the disclosure of the technology, allowing others to expand and improve on the state of the art — and prevent mere copying. Without patent protections, innovators would keep their techniques as trade secrets and out of the public domain indefinitely.

Yet, many economists and the press excoriate the patent system in general, and in particular regarding software patents. Headlines that the patent system is broken occur almost daily. Usually, these comments are centered around a litigation, such as the current Apple vs. Samsung smartphone patent litigation.

Oddly, the facts of the litigation strongly support the philosophy of the patent system. Discovery in the case demonstrated the lengths Apple took to create new technologies for its iPhone. These software innovations created a standard for future phones. Samsung and others, innovators in their own right, sought to emulate or improve on these ideas. In the patent litigation, Samsung was found to infringe some of the patented Apple features.

Innovation Tax

Years ago, a small company won a large judgment against BlackBerry manufacturer RIM, and the press then attacked the patent system as out of sync with modern technologies. In that case, the inventor conceived of the idea of aspects of BlackBerry messaging prior to RIM’s efforts in that regard. After much controversy, that case settled, thereby avoiding a potential injunction against some RIM products.

Here, too, the facts in the case support the patent system. Innovation is not confined to large companies. Patent worthiness is not confined to well-funded corporations. The U.S. patent system was originally designed for the little guy tinkering away. It was the later creation of corporations and the consequent struggle for market share and competitiveness that morphed U.S. society and the patent system into what they are today.

For example, through various Supreme Court cases, a small inventor now has a difficult time enforcing a patent. Litigation now is quite complex, even without the difficulty of explaining technologies to juries.

Arguably, only the “real” and extremely valuable inventions will now be litigated. However, American innovation is usually grassroots, and inventors may not have the means to prevent others from stealing an invention. Thus, preventing many small inventors their day in court — e.g., by thwarting contingency fee efforts — benefits corporations, and will likely adversely affect small inventors. Not every small inventor is a troll, i.e., one exploiting the patent system unfairly.

Also, although the U.S. Patent Office is making great strides to cope with the issues of today, many view the current changes in the America Invents Act as the corporatization of the patent system, a transmogrification from the intent of the framers. With many rather large fee increases and the ongoing threat of funds diversion by Congress, this new “tax” on innovation will be severe and may thwart innovation, particularly now with the economy in the doldrums. Small inventors are offered some discounts from these fees, but even the discounted amounts on some of these new procedures are out of reach for most non-corporate inventors.

It is also harder to obtain a software patent. With the many recent court cases, software innovators now must adhere to various new laws and regulations before obtaining a patent, increasing the costs for preparing and obtaining software patents, thwarting patent application filings. As with any new innovation, a software innovation must be new or novel, as well as nonobvious — i.e., not a trivial distinction from what is known — and satisfy other requirements, some focusing on software inventions. Further restrictions are not necessary, and software innovations should not be treated differently than any other invention.

Patents Are Not Forever

As the repertoire of literature and issued and published software patents grows, the contours of what is patentable and what is not become clearer. As mentioned, software is a new industry, and most patenting did not commence until the late 1990s. This is still a new arena and will not settle down soon. Also, the technologies are increasingly complicated. Samuel Morse’s telegraph is a child’s toy compared to the innovations of today, which are adaptable for many more purposes than just one.

Nonetheless, just as with all industries, in time the controversies will diminish as the major players learn to coexist, e.g., through cross-licensing. We are now in the midst of a cutthroat time when major players fight. The U.S. patent system is not evil. Software patents are not evil or unjustified. If a software patent is dubious, the patent system provides many avenues to invalidate it. With the new patent rules, many additional avenues of attack are provided to prevent issuance of or to invalidate a software patent.

As Rand noted in her defense of capitalism, patents are not perpetual and have a limited lifespan, now 20 years from filing, after which they enter the public domain for all to use. For the brief period of exclusivity, during which others may not copy, the patentee is allowed to profit. For smartphones, is it required to include another’s patented feature among the applications? Without recompense?

Software, a quintessentially American endeavor, must be preserved. Thwarting inventiveness in this area will harm the United States. Preventing inventors from obtaining patents for their software will harm humanity by diminishing disclosure of inventions. Although some code is written for free or shared, which is the choice of the writer, the intellectual effort imbued within code requires protection in most cases, at least to prevent mere copying.

The current attacks on the patent system should be taken in the broad context of history. The U.S. founders put a patent system into the Constitution, a patent system for all useful inventions and improvements.

Without software, our lives would be far different. Without software, our society would collapse, much like the anti-capitalist, dystopian government in Rand’s novel Atlas Shrugged. All important technologies require protection. Abrogation or curtailment of patent rights in software, genomics, nanotechnology or any other controversial area would devastate industries and cripple the U.S. Great care should be taken before altering a foundational principle of the Republic.