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Software patent debate

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For general information on software patents, see software patent.
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The software patent debate is the argument about the extent to which, as a matter of public policy, it should be possible to patent software and computer-implemented inventions. Policy debate on software patents has been active for years.[1] The opponents to software patents have gained more visibility with less resources through the years than their pro-patent opponents.[2] Arguments and critiques have been focused mostly on the economic consequences of software patents.

One aspect of the debate has focused on 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.

Arguments for patentability

There are several arguments commonly given in defense of software patents or defense of the patentability of computer-implemented inventions.

Public disclosure

  • A patent must publicly disclose the invention. This could educate the public by making them aware of a previously unknown or not obvious software invention.

Innovation

  • In the U.S., the Congress has stated that "anything under the sun made by man" deserves patent protection[3] to promote innovation.

Economic benefit

  • Software patents resulting from the production of patentable ideas can increase the valuation of small companies.[4]
  • Software patents increase the return on investment made by the public on federally sponsored university research, and ensures the flow of knowledge that is required for society to progress.[5]
Main article: Copyright infringement of software

Patents protect functionality. Copyright on the other hand only protects expression. Substantial modification to an original work, even if it performs the same function, would not be prevented by copyright. To prove copyright infringement also requires the additional hurdle of proving copying which is not necessary for patent infringement.

Arguments against patentability

Opponents of software patents argue that:

Software is math

A program is the transcription of an algorithm in a programming language, and being every (Turing-complete) programming language equivalent to Church's lambda calculus by virtue of the Church-Turing thesis, a program is thus the transcription of a mathematical function. Since math is not patentable, neither is software.[6]

Software encourages patent thickets

A patent thicket is a dense web of patents that companies must decipher to develop new technology. There are various types of patent thickets such as when a single innovation is protected by multiple patent holders or when a product is covered by numerous patents. The consequences of patent thickets are increased difficulty of innovation, cross-licensing relations between companies will be too complex, and it discourages newcomers from entering the software industry.[7]

Hinders research and development

  • Some scientific studies and expert reviews have concluded that patent systems paradoxically hinder technological progress[8] and allows monopolies and powerful companies to exclude others from industrial science in a manner that is irreconcilable with anti-trust laws.[9]
  • Gary Becker, Nobel Prize–winning economist, argues, "Their exclusion from the patent system would discourage some software innovations, but the saving from litigation costs over disputed patent rights would more than compensate the economy for that cost."[10]

Cost and loss of R&D funds

  • Should a software developer hire a patent attorney to perform a clearance search and provide a clearance opinion, there is no guarantee that the search could be complete. Different patents and published patent applications may use different words to describe the same concepts and thus patents that cover different aspects of the invention may not show up in a search. The cost of a clearance search may not prove to be cost effective to businesses with smaller budgets or individual inventors.[11]
  • For the U.S. the economic benefit is dubious. A study in 2008 found that American public companies’ total profits from patents (excluding pharmaceuticals) in 1999 were about $4 billion, but that the associated litigation costs were $14 billion.[12]
  • Software developers and hardware manufacturers may be forced to pay license fees for standards that are covered by patents (the so-called essential patents). Some examples are H.264, MP3 and GIF (that uses the patented LZW compression algorithm) and JPEG for graphics.
  • It is argued that traditional copyright has provided sufficient protection to facilitate massive investment in software development.[13]
  • Copyright is the right of an author(s) to prevent others from copying their creative work without a license. Thus the author of a particular piece of software can sue someone that copies that software without a license. Copyright protection is given automatically and immediately without the need to register the copyright with a government, although registration does strengthen protection. Copyrighted material can also be kept secret.

Software is different

See also: artificial scarcity
  • Software programs are different from other electromechanical devices because they are designed solely in terms of their function. The inventor of a typical electromechanical device must design new physical features to qualify for a patent. On the other hand, a software developer need only design new functions to create a working embodiment of the program.[14]
  • Software is a component of a machine. The computer’s hardware is generic; it performs functions that are common to all of the software that is capable of being executed on the computer. Each software program that is capable of executing on the computer is a component of the computer.[14]
  • Computers "design" and build the structure of executable software. Thus, software developers do not design the executable software's physical structure because they merely provide the functional terms.[14]

Trivial patents

  • Anecdotal evidence suggests that some software patents cover either trivial inventions or inventions that would have been obvious to persons of ordinary skill in the art at the time the invention was made.[15]
  • Patent examiners rarely have a comprehensive knowledge of the specific technologies disclosed in the patent applications they examine. This is in large part due to the enormous number of micro-niches in the software field and the relatively limited number of examiners. So, patents are sometimes allowed on inventions that appear to be trivial extensions of existing technologies.[16]

Open source disadvantage

Main article: Software patents and free software
  • The free and open source software community, and many companies that use and contribute to open source oppose software patents because they can impede or prohibit the distribution of free software. They contend that patents threaten to undermine FLOSS, regardless of innovations produced by FLOSS collaborations.

Software patents' usefulness as an information source is limited

  • Some patent disclosures in the software field are not readable to some programmers; as a result, patents are rarely used as a source of technical information by software developers.[17]

Patent examination is too slow

  • For 2005, the projected average pendency for patent applications in the "Computer Architecture, Software & Information Security" department of the U.S. Patent and Trademark Office was 3 and a half years.[18]
  • In Europe, the average time taken to grant a patent in any field of technology was almost 4 years in 2005,[19] with the computer related fields probably[vague] being greater than the average.

Recent Supreme Court decisions

Several Supreme Court decisions since 2000, as well as the Federal Circuit and district court decisions interpreting and implementing them, have dramatically impacted the status of software patents in the United States. They have particularly affected many thousands of business-method patents that issued as a result of Federal Circuit decisions in the 1990s. The two principal Supreme Court decisions were Bilski v. Kappos and Alice v. CLS Bank, the latter of which confirmed the applicability of the earlier decision Mayo v. Prometheus to computer-related inventions in which a computer was used to implement an abstract principle or preexisting business practice. (These cases are the subject of separate Wikipedia articles, which discuss the background and rulings in these cases in more detail, and supply authorities supporting the generalizations about those cases that follow. Additional detail is found in the Wikipedia article Software patents under United States patent law, along with supporting citations not repeated in this summary of those articles.)

Bilski case

The Bilski case involved a patent application on methods for hedging against commodity price fluctuations, which the PTO had rejected. The Federal Circuit, in In re Bilski, upheld the PTO's rejection on the grounds that the claims failed the machine-or-transformation test, which the court held should be used as the sole test of patent eligibility. The court did not hold all business methods to be patent ineligible, although a minority of the judges would have ruled that business methods are not properly the subject of patents.

The Supreme Court affirmed the judgment of ineligibility, in Bilski v. Kappos, but on more general, and less articulated in detail, grounds of undue abstractness. It rejected the Federal Circuit's elevation of the machine-or-transformation test as the sole test of patent eligibility, saying that rather it was simply a "useful clue." The 5-4 majority refused to hold that all business methods were incapable of being patented, but four justices would have established such a rule. A concurring opinion pointed out that the Court was unanimous, however, as to many issues in the Bilski case, including a rejection of the Federal Circuit's late 1990s State Street Bank decision, which allowed patents on any advance, technical or nontechnical (and in that case a numerical financial calculation of stock price changes) that produces a "useful, concrete and tangible result."

The Supreme Court's Bilski decision was criticized because of its lack of detailed guidance on how to determine whether a claim was directed to an abstract idea. Nonetheless, it provided some clarification and affirmed the Federal Circuit's taking a new direction in its software-related patent cases.

Mayo case

In Mayo v. Prometheus, the Supreme Court invalidated a patent on a diagnostic method, because it non-inventively implemented a natural principle; the Court drew on cases involving computer software and other abstract ideas. In this case, the Court was much more detailed in describing how to recognize a patent-ineligible claim to an abstract idea. The Mayo methodology has come to dominate patent-eligibility law. It revived the approach of the Flook and Neilson cases, which is to treat the underlying principle, idea, or algorithm on which the claimed patent is based as if it were part of the prior art and to make patent eligibility turn on whether the implementation of it is inventive. This led to the "two-step" Alice test described next.

Alice case

At the time the Mayo case was decided, there was some uncertainty over whether it applied only to natural principles (laws of nature) or more generally to patent eligibility of all abstract ideas and general principles, including those involved in software patents. The Alice decision confirmed that the test was general. The Alice case involved patents on electronic methods and computer programs for financial-trading systems on which trades between two parties who are to exchange payment are settled by a third party in ways that reduce the risk that one party will perform while the other will not. The patents cover what amounts to a computerized escrow arrangement.

The Court held that Mayo explained how to address the problem of determining whether a patent claimed an unpatentable abstract idea or instead a potentially patentable practical implementation of an idea. This requires using a "two-step" analysis.

In the first step, the court must determine whether the patent claim under examination contains an abstract idea, such as an algorithm, method of computation, or other general principle. If not, the claim is potentially patentable, subject to the other requirements of the patent code. If the answer is affirmative, the court must proceed to the next step.

In the second step of the analysis, the court must determine whether the patent adds to the idea "something extra" that embodies an "inventive concept." If there is no addition of an inventive element to the underlying abstract idea, the court will find the patent invalid under section 101. This means that the implementation of the idea must not be conventional or obvious to qualify for a patent. Ordinary and customary use of a general-purpose digital computer is insufficient; the Court said—"merely requiring generic computer implementation fails to transform [an] abstract idea into a patent-eligible invention."

The ruling continued with these points:

  • A mere instruction to implement an abstract idea on a computer "cannot impart patent eligibility."
  • "[T]he mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention."
  • "Stating an abstract idea 'while adding the words "apply it"' is not enough for patent eligibility."
  • "Nor is limiting the use of an abstract idea to a particular technological environment."

Subsequent developments

After Alice, the Federal Circuit and district courts invalidated large numbers of business-method and software patents based on those courts' interpretations of Alice. Federal Circuit Judge William Bryson summed this up in these terms:

In short, such patents, although frequently dressed up in the argot of invention, simply describe a problem, announce purely functional steps that purport to solve the problem, and recite standard computer operations to perform some of those steps. The principal flaw in these patents is that they do not contain an “inventive concept” that solves practical problems and ensures that the patent is directed to something “significantly more than” the ineligible abstract idea itself. [Citing Alice and Mayo.] As such, they represent little more than functional descriptions of objectives, rather than inventive solutions. In addition, because they describe the claimed methods in functional terms, they preempt any subsequent specific solutions to the problem at issue. [Citing Alice and Mayo.] It is for those reasons that the Supreme Court has characterized such patents as claiming “abstract ideas” and has held that they are not directed to patentable subject matter. [20]

See also

References

  1. ^ Nichols, Kenneth (1998). Inventing Software: The Rise of "computer-related" Patents. Greenwood Publishing Group. p. 15. ISBN 1-56720-140-7.
  2. ^ Välimäki, Mikko (2005). The Rise of Open Source Licensing. Turre Publishing. ISBN 952-91-8779-3.
  3. ^ "Diamond v. Chakrabarty, 447 U.S. 303 (1980)". US Supreme Court Center. Retrieved 2008-06-19.; but in "in Re Bilski, CAFC 08/833,892 (2008)" (PDF). United States Court of Appeals for the Federal Circuit. Retrieved 2008-11-05. Template:Date=September 2010 dissents Mayer, Dyk and Linn cite the full context as "A person may have “invented” a machine or a manufacture, which may include anything under the sun made by man, but it is not necessarily patentable under section 101 unless the conditions of the title are fulfilled.", with different interpretations.
  4. ^ "Ways in Which Patents can Help Your E-Commerce Business". World International Property Organization. Retrieved 2008-06-19.
  5. ^ Coriat, Benjamin (2002). "Establishing a New Intellectual Property Rights Regime in the United States: Origins, Content and Problems". Research Policy. 31 (8–9): 1491–1507. doi:10.1016/s0048-7333(02)00078-1.
  6. ^ Pamela Jones, An Explanation of Computation Theory for Lawyers.
  7. ^ González, A. G. (2006). The software patent debate. Journal of Intellectual Property Law & Practice, 1(3), 196–206. doi:10.1093/jiplp/jpi046
  8. ^ Jaffe, Adam B.; Lerner, Joshua. Innovation and its discontents: how our broken patent system is endangering innovation and progress. ISBN 978-0-691-11725-6
  9. ^ Almarin Phillips (March 1, 1966). "Patents, Potential Competition, and Technical Progress". The American Economic Review. 56 (1/2): 301–310. JSTOR 1821293.
  10. ^ Lee, Timothy B. (31 July 2013). "Here's why economists hate software patents". The Washington Post. Retrieved 31 August 2016.
  11. ^ Mulligan, Christina and Lee, Timothy B., Scaling the Patent System (March 6, 2012). NYU Annual Survey of American Law, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2016968
  12. ^ "Patent medicine - Why America's patent system needs to be reformed, and how to do it". Economist. 2011-08-20. Retrieved 2011-09-26.
  13. ^ "The Basics". NoSoftwarePatents.com. Retrieved 2008-06-19.
  14. ^ a b c Robert Plotkin. "Intellectual Property and the Process of Invention: Why Software is Different" (PDF). Law Office of Robert Plotkin. Retrieved 2011-09-30.
  15. ^ James Bessen & Michael J. Meurer "Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk" Princeton University Press, 2008, ISBN 978-0-691-13491-8: "(...) many people have focused solely on patent examination quality as the objective of reform, based largely on anecdotal evidence of trivial, obvious, or otherwise invalid patents. Although we support efforts to improve patent examination quality (large numbers of questionable patents create conditions in which poor patent notice is unavoidable), our analysis suggests that this is only part of the problem and the patent system cannot likely be fixed by addressing only this issue. Of course, the notice problems that we find central to the poor performance of the patent system are not the only ones looking for a remedy. We argue, however, that many proposed reforms, including reforms directed toward improving patent examination quality, are unlikely to be effective unless patent notice is improved generally".
  16. ^ James Bessen & Michael J. Meurer "Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk" Princeton University Press, 2008, ISBN 978-0-691-13491-8: "It is possible, however, that features of software technology make it particularly susceptible to the patenting of obvious ideas, especially given the legal doctrines of non-obviousness developed by the Federal Circuit. For one thing, the general-purpose nature of software technology—again, because the technology is abstract, similar techniques can be used in a wide range of applications— makes it inevitable that techniques known in one realm might be applied in another, yet the documentary evidence that the Federal Circuit requires for a demonstration of obviousness might not be published."
  17. ^ "Software patents need shelter from the storm". ZDNet - Tech News.
  18. ^ "Table 4: Patent Pendency Statistics". United States Patent Office.
  19. ^ "The patent process". European Patent Office.
  20. ^ Loyalty Conversion Sys. Corp. v. American Airlines, Inc..
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