OPINION

A Long-Term View: Software Should Be Patentable in Europe

The European Parliament and European Commission are in the midst of deciding whether software patents will be permitted in the EU. The Commission recently informed the Parliament that it would not redraft the proposed Computer Implemented Inventions Directive (CIID). The European Parliament must now decide if it will adopt the Directive as is, which would make software patentable in Europe.

The Parliament might alternatively reject or amend the Directive. In other words, whether or not software is patentable in Europe is up in the air, as it has been since 2002 when the Directive began its journey through the legislative corridors of the EU.While the ultimate outcome of this issue is unclear, there is no doubt that the advantages of software patents far outweigh their perceived disadvantages.

A Comparison with the United States

The debate in Europe is similar to the one that existed in the United States until about a decade ago. Up until the mid-1990s, it was not possible to patent software by itself in the United States. You could get a software-related patent only if you combined the software with hardware. This is similar to what exists in the EU today, albeit on a country-by-country basis.

The law changed in 1995 through a series of court decisions. As a result of these decisions, software became patentable in the United States, whether or not combined with hardware. Later that year, the U.S. Patent & Trademark Office issued the “Examination Guidelines for Computer-Related Inventions.” The guidelines standardized the procedure for obtaining software patents, and in so doing enhanced legal and commercial predictability of the software patent landscape in the United States.

To be sure, the legal change of making software patentable in the United States has presented challenges. But these challenges are comparable to those faced by other technologies and industries. On balance, the advantages of software patents far outweigh the disadvantages advocated by their critics.

Why Is Hardware Worthy of Patent Protection, But Software Is Not?

The reasons that compelled the United States to change its law and make software patentable are valid in Europe, as well. Considering the case from a technical point of view, why is hardware worthy of patent protection, but software is not? All else being equal, the same amount of technical brain power goes into making a software invention as a hardware invention.

Some critics argue that software is less patentable because it takes less time to write code than wire a circuit board. Even assuming that that is true (which is debatable), the patent laws reward innovation. They do not penalize efficiency of effort. From a technical point of view, there is no reason that hardware is patentable, but software is not.

Patents promote innovation. Patents give software companies more incentive to invest in R&D because they allow those companies to protect their inventions. Without patents, a company cannot effectively prevent competitors from incorporating its software inventions into competing products.

Copyright Provides Little Protection

Critics argue that software is adequately protected by copyright. This is not correct.Copyright protects expression, not functionality. Copyright would protect a company’s code, but not the code’s underlying functionality. Since functions can be coded a variety of different ways, copyright provides little protection of software inventions.Patents are necessary to protect the functions contained in software.

Of course, if those functions were invented and used in the past, they can’t be patented. Critics argue that software should not be patentable in Europe because the European Patent Office would do a bad job and issue bad software patents. That’s akin to throwing out the baby with the bath water. Making software patentable in Europe is the right idea. Getting the execution right may take some time, but it will happen.

In the United States, the Patent Office has addressed the execution issue by hiring more examiners, investing in better prior art search tools and resources, and tightening examination procedures. The fact that pending U.S. applications publish after 18 months (as in the rest of the world) also helps since it adds to the repository of prior art.

It’s an ongoing process, but that is no different from the challenges faced by other technologies. Arguing that software should not be patentable because the execution is not perfect is not valid, unless you’re advocating wholesale revision of the entire patent system.

Software Patents Help Small Companies

Critics argue that software patents favor large companies over small. This is not correct.There is no doubt that some large software companies have extensive patent portfolios. However, large companies enjoy many competitive advantages. It’s hard to say how much of their success is due to patents.

A small company has few competitive advantages. Paradoxically, what advantages it has are often tied to its small size and short history. Not burdened by the heavy inertial often associated with large companies, a small company can often out innovate its larger competitors. But how can a small company prevent its competitors from pilfering its software innovations, once they hit the market?

To be successful in the marketplace, and maintain and build upon that success, small companies need a barrier of entry. Something to prevent competitors from moving into their technological turf. Patents provide that edge. Patents level the playing field, and provide small companies with the time they need to become large companies.Patents also add value because they help small companies raise money. Angels and VCs often want to see that a small company has secured its inventions via patents before making an investment.

Software Patents, Open Source Can Co-Exist

Open-source leaders argue that all software inventions should be freely available to all, and thus oppose software patents. But how is it equitable that a party should be forced to dedicate its property to the public domain? Software may be intellectual property, but it is still property.

A company should be able to maintain ownership of its software, just as it should be able to maintain ownership of its building, and the land that the building stands on. A neighbor might prefer that ownership be swept away, so as to build on an unoccupied portion of the company’s land. But that view is shortsighted, because it puts the neighbor’s property at risk.

There is no doubt that the open-source movement has produced great quantities of superior software. The enormous brain share that results from open-source has produced highly efficient, effective and robust code.

It’s not that software patents are good, and open-source is bad, or vice versa. Instead, companies should have the right to elect one or the other. Prohibiting software patents means that companies cannot protect their inventions, and thus effectively forces everyone to open-source their software. The open-source leaders’ position against software patents seems antithetical to their philosophy of freedom.

The Quid Pro Quo of Software Patents

The opposition to software patents is short-sighted. True, allowing software to be patented will restrict use of the patented software. But that restriction is only about 20 years, a relatively short period in the scheme of things.

Patents have a quid pro quo that more than compensates for the short-term monopoly given to the patent owner. To get a patent, inventors must fully describe the invention. That information is publicly available, usually before the patent issues. While the public cannot use the patented software without the patent owner’s authorization, the public can study and build upon the inventors’ work. There are many examples of the follow-up inventions being much more innovative and valuable than the original idea.

From a long-term point of view, this quid pro quo is the key component of the patent system. It ensures technical advances are documented and preserved, and made available to others for their study and improvement.

As it moves towards its decision on this software patenting issue, one hopes that the European Parliament grant appropriate weight to the long-term, as well as short-term, implications of its decision.


Attorney Michael Q. Lee is a director in the Electronics Group at Stern Kessler Goldstein Fox. He may be reached at mlee@skgf.com.


9 Comments

  • Lee says, Arguing that software should not be patentable because the execution is not perfect is not valid, unless you’re advocating wholesale revision of the entire patent system.

    Right on. In the end, Lee is right about this one thing in his article. Before we can permit any software patents, we must demand a wholesale revision of the entire patent system. Justice, fairness, and simple logic require us to create a system that will work for the greater public good, not the just the WIPO mob good before we put it into operation.

  • The issue is not so much over whether patents should be allowed, as what kinds of patents are fair or unfair. Massive portfolios of trivial features, used as bargaining counters AM ong the big boys and held for many decades, are unfair. No patents at all is unfair. Somewhere in the middle are "technical contributions" which make a real difference, held for approximately the lifetime of the inventor.
    The European Parliament have an opportunity to move the Directive in the right direction. Let us hope they are able to, and let us help them by lobbying for fairness.

  • Dear Mr. Lee,
    I AM writing to you in response to your article concerning
    software patents. Let me introduce myself.
    My name is Ron Arts, and I AM the owner of a small
    software/services company in Amsterdam, The Netherlands.
    I AM in my forties, and have been a programmer for 30 years.
    I want to explain to you why I oppose the patent system
    as currently exists in the US, and as people are trying to
    instate in the EU.
    For the sake of this argument I want to use my brother-in-law
    (please bear with me here). His job is to produce drawings
    for pipes and conducts on ships. He knows a lot about pipes,
    connections, crossings, standards etcetera.
    Every time he produces such a blue print it is different.
    Also, his colleagues produce different drawings when given
    the same assigment. What counts is if the end result works
    for the customer.
    My argument is the following. Producing software is very
    much akin to producing drawings like this. And the patent
    system makes things very hard. Why? Because if you look
    at software patents too many details are patented. Even
    to the extent that I can hardly write a program without
    inadvertently stepping on some patent.
    Suppose you want to make a drawing of a curved pipe, but
    someone has patented the left curve, drawn from left-to-right
    with a certain pencil (the same I want to use)? That
    would be unworkable wouldn’t it?
    Well, exactly this is why I oppose the current system.
    It enables large companies to patent obvious procedures
    which very often can be made to look like unique
    ‘inventions’. This way they can built large patent portfolios
    they can use against competitors with less funding.
    For our company a threat would already be enough to
    bankrupt us, because patent lawsuits are so expensive.
    If you look at the above comparison, you’ll also understand
    why I think copyright is enough for us.
    Of course, there *are* software companies that may
    benefit from patent protection. Speech recognition,
    Artificial Intelligence come to mind. I feel that
    patents should remain possible for these inventions,
    because they may be real inventions. My personal
    opninion is that such patents should only be valid
    for a short period, say 5 years, because time-to-market
    in the software industry can be very short, so there would
    be AM ple time to recoup your R&D investments.
    Regards,
    Ron Arts
    CEO NEoNova BV

    NeoNova BV, The Netherlands
    Professional internet and VoIP solutions
    http://www.neonova.nl Kruislaan 419 1098 VA Amsterdam
    info: 020-5628292 servicedesk: 020-5628292 fax: 020-5628291

  • There is no evidence whatsoever that software patents benefit innovation or the industry as a whole and plenty of evidence that they do the exact opposite:<b>
    http://www.zdnet.com.au/news/business/0,39023166,20276395,00.htm [attempt to patent ecommerce in Australia]
    <b>
    http://www.infoworld.com/article/03/10/29/HNmsversuspatent_1.html [Microsoft successfuly sued for $500 million because Internet Explorer validates patent on having plugins in web browser]
    <b>
    http://www.eff.org/patent/wanted/ [10 worst software patents]
    <b>
    The list goes on and on – google the AM azon 1 click shopping patent and so on.
    <b>
    Copyright does in fact provide plenty of protection for software. The cost and effort involved for a competitor to make a product of the same functionality as yours will be at least the same as your cost and effort in making that product. Software is not like a physical device or machine that, if not patented, could be quickly and easily duplicated for much less than the original cost to research and develop it.
    <b>
    "Europe because the European Patent Office would do a bad job and issue bad software patents"
    The anti-software-patent argument goes a bit deeper than that – the problem is that there is no reliable way to say that something is a legitimate and innovative invention in software. Further its a bit ridiculous to think that "addressed the execution issue by hiring more examiners, investing in better prior art search tools and resources, and tightening examination procedures" will fix the problem when more bad patents than ever before are getting granted. Either way an entire industry shouldn’t be held hostage to the possible future improvements of a single government department for its well being.
    <b>
    "Software Patents Help Small Companies"
    The opposite is in fact true. Big companies are continuously engaged in a mad scamble to patent anything and everything that they can, for example:
    http://news.com.com/Gates+wants+patent+power/2100-1014_3-5288722.html [Microsoft aims to file 3000 patents in 2004, IBM 3400, HP 1700]
    There is no way that small companies (even combined) can keep up with this level of patenting and even if they could they could never muster the $1 million or so it takes to prosecute a patent claim. Even worse if the small software company ever tried to use its patents to protect itself against a large company such as Microsoft or IBM it would die under an onslaught of patent countersuits, using the well reported Mutually Assured Destruction aspect of the current softare patent landscape [http://www.eweek.com/article2/0,1759,1778839,00.asp]. So in effect patents are near useless for small software companies.
    <b>
    "Open-source leaders argue that all software inventions should be freely available to all, and thus oppose software patents. But how is it equitable that a party should be forced to dedicate its property to the public domain? Software may be intellectual property, but it is still property."
    <b>
    No a patent isn’t property, despite the term ‘intellectual property’, it is a temporary reward granted by the government to encourage research and development, a bit like a tax break for R&D spending except under a more formalised system. Any arguments trying to compare it to the right to own a building or other physical property are complete garbage.
    <b>
    The current nature of software patents allow companies to steal obvious and well used ideas from the public domain (eg. one click ordering, ecommerce, plug-ins in browsers). Its ridiculous to say that not patenting something denies the would-be ‘inventor’ of a piece of their property, just as if you were to illegally build on someone elses land. Mr Lee needs to do some reading on the nature of capitalism, the free market and private property and how patents have nothing to do with these ideas and in fact are contrary to them in some ways.
    <b>

  • The author writes:
    .
    "True, allowing software to be patented will restrict use of the patented software. But that restriction is only about 20 years, a relatively short period in the scheme of things."
    .
    Here’s an interesting challenge. Starting now, let the author limit himself to the services of only that software that is 20 years old or more. Should not be much of a burden since 20 years is a relatively short period in the scheme of things.
    .
    Anyone who could write something that asinine merits no attention. At least if he takes up my challenge, he’ll be off the web until 2010 or so.

  • This is the LinuxInsider Site right? Whats up with all the yay patents stuff?
    Linux is predicated on the GPL, copyleft. And one poster has already stated that copyright for software is better than patents, and I agree. But Linux is by definition against copyrights, therefore I believe and have seen alot of people espouse that Linux should be waaay against patenting software.
    All of Linux’s code is available for all to see. Now how many podunk patent squatters (some of whome don’t even have actual code in some cases) do you want to just read the source code and sue the Linux developers. And that’s supposed to foster innovation?
    To true LinuxInsiders patents on software are abomination.
    What is going on here?

  • The whole argumentation is built on the premise that there is actually a well-defined concept called "software invention", when in fact there is not.
    Additionally, instead of asking why hardware should be patentable and software shouldn’t, perhaps the author should ask why mathematics shouldn’t be patentable.
    "Critics argue that software is adequately protected by copyright. This is not correct. Copyright protects expression, not functionality. Copyright would protect a company’s code, but not the code’s underlying functionality."
    Copyright protects software solutions. Software patents can easily protect _any_ solution, because the functionality is protected. At the risk of stating the obvious, this is bad for competition, and therefore innovation. What is less obvious is how this problem eludes so may proponents of software patents.

  • The article states: "Patents promote innovation. Patents give software companies more incentive to invest in R&D because they allow those companies to protect their inventions. Without patents, a company cannot effectively prevent competitors from incorporating its software inventions into competing products."
    .
    Wrong. Software patents *discourage* software innovation. Patents are a tool used by companies to stifle others from writing similar software, reducing the universe of available code. Patent wars distract software companies from writing software.
    .
    I believe that this article is not well thought out.

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