Diff for "SwpatArgumentsEn"

Differences between revisions 1 and 2
- No differences found!

Software patents: Key Arguments

Two good resources are extracts from a report by the US Federal Trade Commission last year,

and a useful checklist of arguments presented in the UK consultation:

The FTC chapter on software and Internet patents concluded:

  • "Many panelists and participants expressed the view that software and
  • Internet patents are impeding innovation. They stated that such patents are impairing follow-on incentives, increasing entry barriers, creating uncertainty that harms incentives to invest in innovation, and producing patent thickets. Panelists discussed how defensive patenting increases the complexity of patent thickets and forces companies to divert resources from

    R&D into obtaining patents. Commentators noted that patent thickets make it more difficult to commercialize new products and raise uncertainty and investment risks. Some panelists also noted that hold-up has become a problem that can result in higher prices being passed along to consumers".

Key issues

Attached below is a summary of some of the key issues, specifically:

  • Threat to competition
  • Threat to SMEs
  • Threat to open source
  • Threat to personal creative freedom

Underlying them all is the notion that copyrights are a good way to protect software, which reflect the work and real investment that has gone in to it. But patents don't, and aren't.

See also:

A good summary of some of the key arguments

Comments of leading economists:

Petition by leading computer scientists:

Statement by the European small business organisation CEA-PME:

"E-patents and financial investing", by Laura Creighton, a software venture-capitalist.

Software patents: the threats

Threat to Competition:

Software patents are more about control than investment.

(a1) Patents hurt competition.

Software is already protected by copyright. This spurs competition, giving innovators a breathing space to get established, before competitors can develop their own implementations.

But patents grant monopoly rights on an invention for twenty years. This kills competition dead.

(a2) Network effects make software patents especially dangerous.

"Winner takes all" is especially prevalent in software. If a piece of software cannot interoperate with a market leader, it is effectively out of that market.

A typical modern piece of software has thousands of functions, and thousands of subroutines, each of which could be the subject of patents. If this is the case a market leader can "tie in" a much larger market monopoly than just the functionality covered by the patent.

The danger is especially acute with regard to communication protocols, for example file formats or web-service specifications. Patents in such areas can allow market leaders to leverage on their dominance in one sphere, to dictate who they will permit to compete with them in another sphere.

Threat to SMEs

(b1) Patents are out of step with the investment needs of the software market.

According to venture capitalists, a typical time horizon from investment to product for a new pharmaceutical may be 15 years and a cost of $400m; for software, 6 months and a few tens or hundreds of thousands.

Software R&D is relatively cheap; and being first to market is a big advantage and incentive to innovate. Software SMEs have not needed patents to flourish and grow.

The hard work in software development is the actual expression and the debugging of the program. Copyright is a good fit because it directly rewards this hard work of implementing the program, and debugging the program to get it right. The more work that is, the more the copyright is worth.

On the other hand the sweeping 20 year protection granted by patents (geological time in the software industry) is entirely out of scale to the creative input required (a mere sketch of how it might be implemented).

(b2) Patents are expensive, and uncertain to rely on.

Copyright is automatic, and free. Copyright cases are much cheaper to fight; and copyright infringement is much easier to prove (or disprove), because it relates to an explicit taking.

On the other hand, software patents are also risky to rely on in court: because it is impossible for patent offices to effectively search all of the computer programs ever written, it is very hard to guarantee whether or not a patent is sound, or whether it will be overturned in court. There is also ample scope for lawyers to debate the patentability of the subject matter itself; the obviousness (or not) of the inventive step; and even the patent's relevance, whether the alleged infringement is actually covered by the language of the patent claim.

The scale of these uncertainties can be judged by the fact that the few companies in Europe which offer patent insurance specifically exclude software patents, because "it would just not be possible to offer a premium that would be economic".

This uncertainty plays into the hands of the biggest companies, with the best lawyers and the deepest pockets. But in any case, to fight a patent case through all its stages costs about £1m in the UK, and about $2m in the USA. If you cannot credibly spend this to enforce your patent, it is worthless. Similarly, if you cannot credibly spend this to defend yourself against somebody else's patent, you had better fold.

SMEs therefore overwhelmingly see patents as a threat rather than an opportunity. The push for software patentability is being led by the largest companies, and their corporate lawyers.

(b3) A minefield for developers

As Richard Stallman has put it:

"Software patents are like landmines for programmers. At each design decision, there is a chance you will step on a patent and it will destroy your project. Considering the large number of ideas that must be combined in a modern program, the danger becomes very large."

Unlike copyright, you cannot be sure that you are not infringing a patent just because a program is all your own independent work. You do not need to have known about a software patent in order for your work to infringe it, you do not even need to have known that the patent owner or their product ever existed. The patent applies to all-comers, regardless.

But independent reinvention is very common in software, with innovations very often 'of their time', as a particular challenge become apparent. Such steps may not be "obvious" in the patent-law sense (ie an unimaginative combination of existing elements), but they are entirely routine in an activity where creative problem solving is a daily requirement.

Certainty that you are not infringing anybody else's patent in a program is almost impossible, because the patent database is so large, and with so many subroutines in a program it is entirely impractical to search the database for every one.

Threat to Open Source

(c1) The importance of Open Source

Open source software has become a tremendous enabler for SMEs and for innovative projects, because it provides a well-tested inexpensive platform to build on, which can be adapted to suit particular needs.

Thus, for example, a website such as the Public Whip is possible because it is running an Open Source content language (PHP) on top of an Open Source web server (Apache), accessing an Open Source database (MySQL), all running on an Open Source operating system (Linux), and able to talk to the world through an open standard, royalty-free protocol (the Internet, specifically TCP/IP)..

Similarly, the thriving UK set-top box industry almost entirely built on Linux, because its ease of availability and open source nature made it easy to adapt to new hardware, which made it possible to develop fast.

Government too is waking up to the opportunities of Open Source. Freedom to re-use and adapt the code means that different organisations (eg local authorities) can adapt software to suit changing needs and new opportunities, pool the enhancements, and access all the improvements made by others. And the open availability and re-usability of the source code guarantees that an "open standard" does not hijacked into a "single vendor lock-in" by the need to communicate with that vendor's idiosyncratic interpretation.

(c2) The threat of lock out.

It is sometimes argued that because someone has the right to choose whether to keep their source code secret as closed source, or to publish it as open source, that similarly they should be allowed to choose whether to patent it, or not to patent it.

The difference is that copyright does not prevent anybody else creating their own version and making it open source. So open source can, with enough time and trouble, eventually catch up. But a patent locks down the functionality for twenty years. Since the point of open source is that it is freely available for copying and redistribution, it is impossible for open source to licence the functionality unless the patent owner offers to make it available royalty-free. If this functionality is essential for compatibility (eg a web-services protocol; or eg the ability to implement some function in a spreadsheet), then effect is to shut open-source out of a market which is vastly wider than just the scope of the patent.

Open source is a useful resource, which is made possible by the zero marginal cost of redistributing an intangible good. The costs of allowing shutting off avenue after avenue to open source should be carefully weighed.

(c3) Open source as a target

Companies in the most actively competitive markets seem to be largely unafraid of Open Source. In such markets, where most of the proceeds of software sales are having to be actively re-invested to keep ahead of the competition, open source has its work cut out to keep up.

But open source is seen as an ever more real threat by companies living off ongoing monopolistic rents in mature markets. The competition posed by open source could be just what is needed to shake these markets up, and create an environment which would reward real innovation.

But such entrenched companies have an incentive to try to stop open source by any means available, and software patents put a very powerful weapon in their hands.

Threat to personal creative freedom

(d) Many programmers feel that writing a computer program is a creative act, most like writing a book, painting a picture or composing music. They feel that this is most appropriately protected by copyright, which prevents wholesale taking of the whole work.

But patents take away the abstract tools of their trade, just as if a novelist were no longer allowed to arrange words in a particular form of clause, or a lawyer no longer allowed to use a particular form of provision in a contract, because somebody else owned it.

For many programmers, this is the most heartfelt reason for opposing software patents of all.

Hosting sponsored by Netgate and Init Seven AG