No software patents versus patent reform


We often cry ourselves hoarse trying to justify non-waterfall methods of software development saying that software is fundamentally different from manufacturing or civil construction. There is substance to this. Code is design. Compilation (build) is zero cost for all practical purposes. If we agree that compilation is the equivalent of a manufacturing assembly line or brick-laying, then the economics of software development are very different indeed. The economics of software make it particularly vulnerable to the ill-effects ot the current patent regime.
I used to find it surprising when highly credible people said there was nothing fundamentally different about software patents - "If you're against software patents, you're against patents in general." Until I realized that software patents aren't inherently evil - the devil, as usual, lurks in the details.
Patents exist to balance competing objectives:

  1. Encourage innovation
  2. Give innovators a chance to profit from their success
  3. Improve the body of knowledge in the public domain (eventually)
In practice, the second objective is generally met by conferring a twenty year period of exclusive usage rights. Thus, patents are economic devices. Won't the efficacy of an economic device depend on the underlying economics of the industry it is meant for? Do all industries require twenty years to recoup investment and monetize an innovation? It certainly is ridiculous for software. Technology cycles keep getting shorter - twenty years is several generations in most industries today. A two year patent might be more reasonable for software. Of course, that still leaves jokes like the one-click-checkout patent untouched.
When patents were first conceived, they were meant for flesh and blood patent holders, not for mere legal persons (Corporations). Corporations gained personhood much later. However, the majority of patents today are held by corporations rather than individuals. This has lead to barely legal behaviors that end up stifling innovation in the industry as a whole.
What's really needed is a nimble international body that can tweak the terms of patenting for different industries. But then, international co-operation is hard to come by even for life threatening issues such as climate change. No wonder people push for elimination of software patents instead of push for a better patent regime.

5 comments:

Dale B. Halling said...

Your argument against software patents logically. The arguments against software patents have a fundamental flaw. As any electrical engineer knows and software developer should know, solutions to problems implemented in software can also be realized in hardware, i.e., electronic circuits. The main reason for choosing a software solution is the ease in implementing changes, the main reason for choosing a hardware solution is speed of processing. Therefore, a time critical solution is more likely to be implemented in hardware. While a solution that requires the ability to add features easily will be implemented in software. Software is just a method of converting a general purpose electronic circuit (computer) into a application specific electronic circuit. As a result, to be intellectually consistent those people against software patents also have to be against patents for electronic circuits.

You suggest that software patents inhibit innovation. All the evidence shows that when it became clear that software was patentable there was more innovation in patents as measured by the number of people employed making software, number of new companies formed to create software, and the amount of venture (risk) capital devoted to software.

Since 2000 we have passed a number of laws and regulations that are killing innovation in the US. The incredible innovation of the 90s was based on technology start-up companies built on intellectual capital, financial capital, and human capital. All three of the pillars have been under attack since 2000. Our patent laws have been weakened reducing the value of intellectual capital. Sarbanes Oxley has made it impossible to go public reducing financial capital for start-ups and the FASB rules on stock options have made it harder to attract human capital to start-ups. For more information see http://hallingblog.com/2009/05/26/innovation-regulatory-road-kill/.

Sriram said...

@Dale
I agree with your first paragraph and disagree with the rest. I haven't argued against software patents per se. I agree that "If you're against software patents, you're against patents in general." I repeat - The economics of software make it particularly vulnerable to the ill-effects ot the current patent regime.

It is definitely a fact that the software industry has grown and generally done well in the last decade. However, it is disingenuous to attribute this to the patent regime.

Saager Mhatre said...

Amazon's 1-Click patent seems almost plausible in comparison to IBM's famous 'fat line' patent. Man, that one never gets old! :D

Pramod Biligiri said...

Call me simplistic but I'm for getting rid of all IP laws :)
(link)

Pramod Biligiri said...

Hm, I might as well plug another post of mine :P (link)

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