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. The opponents to software patents have gained more visibility with fewer resources through the years than their pro-patent opponents. 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 Through public disclosure, patents encourage the open sharing of information and additional transparency about legal exposure. Through public disclosure, patents encourage the transfer of mechanical technology, which may apply more broadly.
Economic benefit Software patents resulting from the production of patentable ideas can increase the valuation of small companies. Software patents increase the return on investment made, which includes government funded research.
Encouragement of innovation The ability to patent new software developed as a result of research encourages investment in software-related research by increasing the potential return of investment of said research.
Copyright limitations
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. Copyright law protects unique expressions, while patent law protects inventions, which in the case of software, are algorithms; copyright cannot protect a novel means of accomplishing a function, merely the syntax of one such means. This means that patents incentivize projects that are unique and innovative in functionality rather than simply form. Copyrights, in turn, only incentivize uniqueness in form.
Protection for small companies Software patents can afford smaller companies market protection by preventing larger companies from stealing work done by a smaller organization, leveraging their greater resources to go to market before the smaller company can.
Hardware patents analogy Hardware and software are sometimes interchangeable. If people can patent hardware, then ideas describing software implemented by that hardware should also be patentable.
Arguments against patentability Opponents of software patents argue that:
Software is math A program is the transcription of an algorithm in a programming language. Since every (Turing-complete) programming language implements Church's lambda calculus by virtue of the Church-Turing thesis, a program is thus the transcription of a mathematical function. Math is not patentable. Therefore, neither is software.
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, complex cross-licensing relations between companies, and discouragement of newcomers from entering the software industry.
Hinders research and development Some scientific studies and expert reviews have concluded that patent systems paradoxically hinder technological progress and allows monopolies and powerful companies to exclude others from industrial science in a manner that is irreconcilable with anti-trust laws. 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."
Hinders innovation The Electronic Frontier Foundation published the Defend Innovation whitepaper after doing two and a half years of research on software patents. They concluded that many overbroad software patents are being awarded, which is actually stifling innovation. Interoperability is thought to promote innovation, and patent systems have the potential to block the development of such technologies. There has been a lack of empirical evidence to suggest that patents have any positive effect on innovation, and furthermore, the system primarily “encourage[s] failing monopolists to inhibit competition by blocking innovation.”
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 cost effective to businesses with smaller budgets or individual inventors. 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. 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.
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