There is heated as to whether and to what extent it should be possible to ''' Patent Software ''' and computer-implemented inventions as a matter of Public Policy .
A particularly active focus of the debate in recent times has been the proposed European Union Directive On The Patentability Of Computer-implemented Inventions , also known as the "CII Directive" or the "Software Patent Directive," which was ultimately rejected by the EU Parliament in July 2005 .
Some of the main economic consequences in general to be expected from patentability are summarised in the following table, taken from Hall (2003) {Link without Title} :
The relative economic significance of each of these effects varies strongly from one industry to another. Supporters of software patentability generally believe the positives decisively outweigh the negatives. Skeptics argue that the particular nature of software and the software industry exacerbate the likely costs of patentability, while making the expected benefits less real or less important than in other industries.
Arguments commonly given in defense of software patents or in defense of the Patentability of computer-implemented Invention s
(which could be defined differently) include:
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- --- Many panelists in a recent US Federal Trade commission study expressed the opinion that patent Monopolies in the software industry diverted money away from R&D and into defensive patent activity. The report states that "commentators were generally skeptical about the benefits of the patent system in the and Internet industries ."
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- --- Software "as such" is not patentable in Europe but these technologies are certainly available.
--Software can be patented in Europe provided that it produces a "technical effect". A technical effect might be the improved operability of a cell phone. See patents by InterDigital for examples. (e.g. "ADAPTIVE UPLINK/DOWNLINK TIMESLOT ASSIGNMENT IN A HYBRID WIRELESS TIME DIVISION MULTIPLE ACCESS/CODE DIVISION MULTIPLE ACCESS COMMUNICATION SYSTEM" ) These patents are licensed worldwide, including to European companies (e.g. Philips ).
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- --- The huge number of software patents filed is caused by (large) software companies feeling that they need to protect themselves against the threat of competitors using patents as weapons against them.
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- --- As opposed to building useful software systems that would directly benefit the company.
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- --- The U.S. became dominant in software before software was patentable in the U.S. It is now losing that lead.
- --- The U.S. patent system has caused serious harm to small companies in the U.S. and has allowed emergence of litigation-only companies that attempt to extract patent revenue without producing any real value.
-- Litigation companies help small companies by providing deep pockets in case a small company's patents are infringed. The litigation company will fund the legal expenses of a lawsuit (typically 2 to 10 million US dollars) so that a small company can afford to bring a patent infringement lawsuit against a big company that is infringing their patents. In exchange, the litigation company receives a substantial fraction of the settlement.
-- Litigation companies also provide a means for investors in small companies to recover some of their investment should the small company go out of business. The litigation company will buy the patents and investors will recover at least some of their funds.
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- --- Certainly, and a lawsuit for unintentional software Patent Infringement can destroy small companies. The question is which of the two is most likely and how important small companies are, compared to big ones, for the competition in the free market.
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- --- The very obscure language makes "published" patents extremely difficult to search and review, even by patent professionals.
- --- This disclosure does not have its intended effect for software, because Source Code is not required to be disclosed.
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- --- Copyright adequately protects that investment. The risk of unforseeable patent infringement strongly discourages investment.
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- ---It is unclear whether software is an invention for the purposes of TRIPs, and copyright law may offer more appropriate protection than patent law.
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- --- Software patent monopolies clearly do not add net economic value to society. Patents may add value for other fields of endeavour such as pharmaceuticals.
- --- The distinction between hardware and software is essential, because for software there is no concept of manufacturing. For hardware, manufacturing cost amounts for majority of cost. This is not the case for software, where R&D costs dominate.
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- ---This statement contains an Unstated Premise that software is something which is subject to intellectual property law. The software patent debate is about this very issue.
-- The Claims In A Patent Application clearly define the protection being sought by way of a patent.
- Claims often do not clearly define the scope of an invention; generalised claims are not valid because they do not precisely describe the invention or how it works.
Claims are examined by patent examiners to determine if an inventor is entitled to the breadth of protection they ask for. In the business method area, almost all claims are initially rejected. Inventors then typically amend their claims to reduce the scope of coverage. Nonetheless, only about 5 to 10% of the current business method patent applications issue as a patent with any claims at all.
If members of the public feel that an examiner has allowed an overly general claim in a patent, they may file an interpartes examination in the U.S., a lawsuit in US Federal Court, or an opposition proceeding in Europe or Japan to argue that claims are overly broad and should not be allowed.
Approximately 5% of all patents that issue from the European patent office are challenged by one or more members of the public in an opposition proceeding. About half of the claims that are opposed are found to be overly broad and are either rejected or reduced in scope. Opposition proceedings can take 2 to 5 years to complete.
Almost no patents in the US are challenged in an interpartes reexamination since it weakens an infringer's ability to defend themselves if they fail in the interpartes reexamination and are then sued for patent infringement.
The Patent Act of 2005 (H.R.2795) has been introduced into the US Congress by Representative Lamar Smith (R - TX) to reform the US patent system. Among other reforms, this act would introduce a full patent opposition system into the US similar to the European system. If the bill passes in its current form, members of the public will have much greater capability to challenge patents that they feel are invalid.
Opponents of software patents argue that:
- A software developer may have to hire an expensive patent attorney and have said patent attorney perform a Clearance Search and provide a Clearance Opinion . These opinions are rarely definitive. Even with a clearance search, a developer still has significant exposure to patent infringement due to the large backlog of pending patent applications. A developer may find that their software infringes one of these patents when it issues in the future.
- --- Patent Infringement Insurance is available to help protect developers against inadvertent patent infringement. Insurance companies also provide services to help an insured avoid infringement.
- ---If a developer files patent applications on his/her own invention, then the process of preparing the application will help the developer become aware of any existing patents that his/her invention might infringe.
- ---A developer can set up a Patent Watch where patents that issue with certain key works are automatically brought to the developer's attention.
- ---Patent applications are published. If a developer finds a patent application that might cover their software when and if the application issues as a patent, the developer can attempt to get a license. A license to a pending application should be much lower in cost that a license the patent that issues from said application.
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- --- Copyright only protects a particular creative expression. It can be circumvented by rewriting code so that the same steps are performed, but using a different series of commands. Patents provide protection for the actual steps performed, no matter what series of commands are used to carry them out. " {Link without Title} rotection conferred by copyright alone is considered too risky. This attitude can easily be understood when considering the huge investments made in order to develop these programs."
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- --- These studies are emprirical in nature and by their own admission do not provide a basis for causal links between patents and their effects on R&D.
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- --- Both overall systems and individual components of a given system can be patented.
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- --- Patent examiners are evaluated based on the number of cases they dispose of, not whether or not they issue a notice of allowance.
- ---In the US, in order to address the issue of patent quality, the patent office has become more strict in its examination of patent applications, particularly those in the software area. Unfortunately, this has led, at least in part, to an increase in backlog at the patent office. It currently takes almost four years for a software patent to issue in the US. The increased backlog has aggravated the problem of inventions becoming widespread and considered in the public domain years before a patent issues. When patents do issue, inventors have little choice but to bring legal action to enforce their patent rights. Inventors that do this are often referred to as Patent Troll s.
- ---In Europe, software “as such” is not patentable. See European Patent Convention
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- --- All patent applications are examined to determine if the claimed inventions are “not obvious to a person of ordinary skill in the art” (US standard) or contain a nontrivial “inventive step” (standard for most of the rest of the world, including Europe).
- ---If any member of the public disagrees with a patent office's determination, they can challenge the validity of the patent once it issues. This is done by an inter partes reexamination in the US and an opposition proceeding in Europe and Japan. In the US, a party may also bring a lawsuit in Federal Court to have a patent declared invalid.
- ---Currently about 5% of all issued patents in Europe are opposed {Link without Title} . Of those, 1/3 are fully upheld, 1/3 are partially overturned, and 1/3 are fully overturned.
- ---Recently introduced patent reform legislation in the US, the Patent Reform Act Of 2005 , will seek to make the US interpartes examination more like the European or Japanese opposition proceedings.
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- --- Most organizations that set standards require that members disclose any pending patents they may have that cover the standards. They also require that the members make those patents available on a nondiscriminatory basis and at a reasonable license fee. Members that hide the existence of patents for inventions that standards are based on can be subject to legal action. See Rambus
- ---Patent applications must be filed before a new idea becomes public. Patent applications are published 18 months after they are filed. In the US, however, there is a one-year grace period between when an invention becomes public and when an inventor must file. Also in the US, inventors can get an exception to the publication rule if they give up their rights to patents outside of the US. The Patent Reform Act Of 2005 proposes to close this loophole and force the publication of all US patent applications 18 months after they are filed. The act is still pending before the US Congress as of Jan 2006.
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- --- They can be avoided by paying royalties that are properly due to patent holders.
-- It is not reasonable to expose small companies to the risk of being required to pay such royalties for independent software development without clear mechanism to avoiding the risk.
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- --- If an enterprise uses a large amount of other people's intellectual property they should expect to pay high fees.
-- No enterprise wants to misuse rights of others. However, it is not possible to avoid patented technology, because no mechanism for avoiding patent-related risk exists.
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- --- This risk is avoided if companies commission professional patent searches of the publicly available databases.
-- This does not actually avoid the risk, because nobody can predict whether some other company has a patent application covering the software, which is not currently available in patent databases, or whether somebody will successfully patent that software in future.
-- Having to search those databases and match your product with badly written and obscured patent language of huge number of patents is time-consuming, costly and does not provide adequate level of certainty.
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- --- If SMEs are not as inventive as large corporations then society would benefit from their removal.
-- The number of patents filed is not a measure of inventiveness.
-- The value to society should not be measured by inventiveness.
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- --- Software invention requires considerable investment that should be protected.
-- Certainly, but, this investment is not adequately protected by patents, which only protects manufacturing. Patents are only relevant for R&D if you assume that manufacturing is the primary contributor for overall cost (and therefore should be primary source of revenue, so R&D would by default not be the target of investment). For software industry, this assumption is not true, since majority of revenue does not come from manufacturing.
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- --- Ideas are not patentable, inventions are. For a software or computer-implemented inventions to be patented, it needs to be disclosed in a manner sufficient clear and complete for the Man Skilled In The Art to Reduce It To Practice .
-- Since all software are just descriptions of ideas, it is not clear which software can be inventions and which cannot. All software can be reduced to practice trivially by running it in a computer, but it does not seem reasonable to hold all software as patentable due to this fact.
-- Source code for software is the preferred form for making modifications to the software, so it would seem that "sufficiently clear" should mean "source code for the invention is disclosed".
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- --- Some software or computer-implemented inventions are concrete and have a technical character and are not merely mathematical methods. They should be patentable. This requirement is not met by pure mathematical methods.
-- All software is by definition a description of a mathematical method (that is, an algorithm or a way of structuring those algorithms.). If it does not try to get a monopoly on a mathematical method, then it is not a software patent.
-Pure mathematical algorithms are not patentable in the United States (''State Street v. Signature Financial Group, Inc.,'' 47 USPQ 2d 1596, 1601-02 Cir. 1998 ) or any other country in the world.
- As of June 2005, the average delay between when a patent application is filed and when it is examined is over three years. By the time patent applications issue as patents, the inventions claimed therein are already in the public domain. This hurts inventors who see their inventions copied without permission, investors who fail to earn a suitable return on the salaries they paid to inventors and the public, which is faced with the uncertain prospects as to exactly what inventions are in the public domain and which inventions will be covered by a pending patent application.
"...There are some new modern-day sort of communists who want to get rid of the incentive for musicians and moviemakers and software makers under various guises. They don't think that those incentives should exist... I'd be the first to say that the patent system can always be tuned...the United States has led...because we've had the best intellectual-property system."
“Patents help protect the right to innovate at Cisco"
"...software is a multi-billion dollar industry with expected growth-rates of 10% p.a. during the next years ... like in any other industry such growth can only be sustained if patents are available."
''Internal memo
"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."
''In a letter to the US Patent Office in 2003''
"I strongly believe that the recent trend in patenting algorithms is of benefit only to a very small number of attorneys and inventors, while it is seriously harmful to the vast majority of people who want to do useful things with computers."
"When I think of the computer programs I require daily to get my own work done, I cannot help but realize that none of them would exist today if software patents had been prevalent in the 1960s and 1970s. Changing the rules now will have the effect of freezing progress at essentially its current level."
"If software patents had been commonplace in 1980, I would not have been able to create TEX ."
"We don't believe that patents serve the security community."
"In our opinion, the cost of the current patent system for the IT industry far outweighs the advantages."
"In the majority of cases in software, patents {Link without Title} independent invention. Get a dozen sharp programmers together, give them all a hard problem to work on, and a bunch of them will come up with solutions that would probably be patentable, and be similar enough that the first programmer to file the patent could sue the others for patent infringement.
Why should society reward that? ... The programmer that filed the patent didn't work any harder because a patent might be available, solving the problem was his job and he had to do it anyway. ... Yes, it is a legal tool that may help you against your competitors, but I'll have no part of it. It's basically mugging someone."
''Submission to USPTO
"Oracle Corporation opposes the patentability of software. The Company believes that existing copyright law and available trade secret protections, as opposed to patent law, are better suited to protecting computer software developments..."
"...SAP would not need patents to protect its investments and is collecting them only as a defensive weapon to prepare for litigation in the U.S..."
"...The American experience of software patents is a disaster. Before imitating them we should rather try to see if they won't agree to change their system..."
"...The time and money we spend on patent filings, prosecution, and maintenance, litigation and licensing could be better spent on product development and research leading to more innovation..."
"...I believe that software per se should not be allowed patent protection..."
"...There is absolutely no evidence, whatsoever—not a single iota—that software patents have promoted or will promote progress..."
"Because it is impossible to know what Patent Application s are in the application pipeline, it is entirely possible, even likely, to develop software which incorporates features that are the subject of another firm's patent application. Thus, there is no avoiding the risk of inadvertently finding oneself being accused of a patent infringement simply because no information was publicly available at the time which could have offered guidance of what to avoid."
"The patent files are glutted with relative nonsense." (Fuller, R. Buckminster, Nine Chains to the Moon, Doubleday Anchor, 1971 p 277)
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