Holding a contrarian view could carry out great benefits: there has always been a need for a procedure to protect any innovative software from reverse engineering that at the same time allows for its appropriation and exclusionary use, as well as it precludes any imitation of its functionality, implementation details aside. This procedure really exists, it’s the proverbial patent: a negative right, temporal and exclusionary, to protect any novel intellectual property in exchange of publishing enough information to replicate it. In some sense, it’s the only open window for the ordinary citizen to introduce its own personal legislation, a strong general purpose tool, however double-edged it may be.
The frontal and so popular opposition to software patents transcends the software world: indeed it can be found in past centuries and for other technologies; for example, the most cited case, and therefore so full of hyperbole, is the decades-long delayed adoption of the vapour machine due to the machiavellic use of the rights conferred by one of its patents.
Regarding current practices, a detailed study of the descriptive statistics of the use of software patents shows that they have been the fastest growing category for decades, though software companies have not been granted many of them because the biggest appliers are other industries similarly intensive in their use of IT capital but also with a strong record of filing for strategic patents. Note also that in the absence of strong patents rights, custom and common sense have required the use of copyright protection (which also does not need to give up any source code) even if it’s a far weaker protection: in fact, both of them are complimentary, but their actual use is substitutive, because whenever one of them is weakened, the other gets used much more.
From a purely economic point of view, studies show a statistically significant increase of the stock value of the software patent-owning companies and they happen to be a mandatory prerequisite to enter markets in which the incumbents already own strongly interdependent patent portfolios. And contrary to general opinion and practice, their use in software start-ups is, overall, positive: they increase the number of rounds and their amount, as well as survival and valuation in case of acquisition. From a strategic point of view, software patents raise barriers to entry acting as a deterrent mechanism to the kind of competition that just follow profits without investing in any kind of sunk costs in the search of technological advances: in short, an increase of 10% in the number of patents entails a reduction in competition between 3 and 8 per cent. And even if their valuation is a very complex matter, the intrinsic value of software patents is higher than that of the rest of patents.
In practice, the biggest burden in their granting and defence is the search of prior art: that is, even under the assumption that the inventor is operating under the principles of good will and full coöperation, he can’t get access to the full prior art because most software is developed internally for companies and never sees the public light. This gives rise to a great number of non-innovative and trivial patents, and others that ignore the prior art on purpose, a matter which sometimes can be difficult to settle (vg. Apple Multi-touch, Amazon 1‑click). Fortunately, malicious uses don’t fare well in the Courts of Justice: the strategies of the so-called patent trolls aren’t successfully long-term, that is, those who are operating within the letter of the law but against its spirit, and are using the patent system to extract rents from others that are using them for productive purposes, a problem that carries a very high economic cost. Only their fair use brings a true premium to business valuations, that is, building a good patent portfolio that does not enter into practices of dubious ethics like filing for patents that only pursue the cross licensing with competitors to avoid paying them for their intellectual property.
The fastest way to begin to learn how to write software patents is to start with this set of documents. And since real learning only happens from the best sources, there are lots of noteworthy software patents, examples to follow for their high degree of inventiveness and the business volume that they backed and helped generate:
- The first practical algorithm to solve linear programming problems.
- DSL, the technology that allowed for the cheap diffusion of broadband connectivity.
- Pagerank, the famous patent that laid out the foundations of Google; it also takes into account the method to quickly compute the rankings of indexed pages.
- Lempel-Ziv-Welch, the well-known algorithm for lossless data compression.
- In the cryptography field, the RSA and ECC algorithms, at the core of public key cryptography.
- The beginnings of digital sound would not have been possible without the DPCM method or FM sound synthesis, and the patents of MP3 compression are dispersed across many companies.
- In the storage field, it’s curious how RAID was invented a decade before its definition as a standard.
- Regarding hardware, we shall not forget the patents awarded to the transistor (Shockley and Bardeen) and modern magnetic storage enabled thanks to the GMR phenomenon.
