Risk Management

Software Squeeze: Patently Wrong?

Major software publishers are leveraging the patent process to put legal pressure on competitors, say critics.
John EdwardsFebruary 28, 2006

Is a computer program an invention or an idea? The difference may sound subtle, but for top software publishers it is literally a billion-dollar question. Inventions may be patented, which gives the patent holder legal rights to the core concept of an innovation, while ideas are entitled only to copyright, which protects just the specifics of an idea’s expression.

The U.S. government has been issuing software patents for more than 40 years on the theory that certain types of abstractions, such as algorithms, are more akin to physical inventions than to written ideas. Software patent supporters, including most major U.S. software publishers, argue that the current system is needed to protect developers’ intellectual property rights.

“On a basic principle, you should get credit for your art,” says Laura DiDio, a research fellow at technology research firm Yankee Group. Software developers maintain that without the broader protection of patents, competitors could duplicate their innovations simply by using code written in a different way, which would be completely legal under copyright’s less extensive shield. (For example, “Yesterday, all my troubles were so far away” is entitled to copyright protection; the idea that things were better the day before today is part of the public domain.)

But critics are now arguing that patents have been awarded to software processes that are anything but novel and inventive. “[Patents have been granted for] things like using a loop in a program or printing a page with variable margins,” says Tom DeMarco, a research fellow at the Cutter Consortium, a technology research organization. “The patent office can’t obey its own rules; they’re just overwhelmed and they don’t have the expertise to fairly judge patent applications.”

There are also signs that software publishers may be abusing the patent system to squash smaller competitors with unsupportable legal expenses. Microsoft alone filed more than 3,000 patent applications in 2005, fueling speculation that the company is more interested in laying a sweeping legal minefield than in protecting specific innovations. Other companies — DiDio calls them “high-tech ambulance chasers” — swoop in and buy patents from failed tech companies simply for the purpose of someday suing companies that happen to use a related technology.

The current Blackberry dispute highlights much that is wrong with the current software patent system, says DeMarco. He notes that companies like NTP, which is suing Blackberry maker Research in Motion over the use of several patents, can use court injunctions as a weapon to force successful businesses into paying royalties on technologies that ought to be in the public domain.

With the proper legal maneuvering, he continues, a weak or even fatally flawed patent can be used to launch a potentially crippling lawsuit: “The review of the patent is infinitely long and the injunctive relief is infinitesimally short — sometimes just a matter of days.” As a result, companies often find themselves caving into patent holders’ demands just to save themselves the larger expense of a drawn-out legal battle.

Fixing the patent problem won’t be easy, says DeMarco. He predicts that any move toward reform would be strongly contested by current patent holders, patent attorneys, the U.S. Patent Office, and others with a stake in the current system.

Even so, he argues, reform may ultimately prove vital to maintaining the U.S.’s technology lead; DeMarco notes that the United States is nearly alone among global innovators in granting patents to new types of software. Just last year, the European Union rejected a bill that would have allowed software patents; in Asia, Japan is the only major tech power with a software patenting system.

“As it is right now, with software patents being awarded all over the place, it’s becoming increasingly unattractive for innovators to set up their businesses here,” DeMarco says. “As the number of lawsuits rise, other countries will benefit from our mistake.”