Software Patents: Time for a Change
Software Patents: Time for a Change
It’s obvious to me that the patent office has been overwhelmed by both the volume of applications and the technology for software patents, and as a result they've made a lot of mistakes. First, the process is onerous, expensive, and takes a lifetime in today’s technology (2-5 years). More seriously, it routinely grants patents that shouldn't be granted. To be patentable, an invention has to be more than new. It also has to be “novel” and non-obvious. This, especially, is where the USPTO has been dropping the ball. Consider one of the first software patents, the Amazon one-click patent by Jeff Bezos.
The problem with Amazon's notorious one-click patent, for example, is not that it's a software patent, but that it's obvious. Any online store that kept people's shipping addresses would have implemented this, and has done so in a slightly different form ever since. The reason Amazon did it first was not that they were especially smart, but because they were one of the earliest sites with enough clout to force customers to log in before they could buy something.
Applying for a patent is a negotiation. You generally apply for a broader patent than you think you'll be granted, and the examiners reply by throwing out some of your claims and granting others. So I don't really blame Amazon for applying for the one-click patent. The big mistake was the patent office's, for not insisting on something narrower, with real technical content.
A lot of companies (Microsoft and IBM, for example) have been granted large numbers of over-broad software patents, and they keep them mainly for defensive purposes. Like nuclear weapons, the main role of big companies' patent portfolios is to threaten potential competitors who sue with a counter-suit.
So what’s the answer? I would argue to simply eliminate the software patent – since software is already covered by copyright and trademark law anyway. The argument is that software by itself is information, not physical. This doctrine already holds sway in Europe, where software is--in theory, whatever national patent offices may do—not patentable. It is in the jargon not “technical.” It is like a piece of music that is loaded into an iPod, or a record placed on a record player.
Others argue that we should fix the problem by eliminating the litigation intensive model, by integrating institutional competition, and by reforming the internal Patent Office processes. To me, these all sound like band aids, rather than a real solution to the problem.
I’d like to hear some actual experiences from the real world of startups and software patents, either positive or negative. I’m a big supporter of nurturing your portfolio of intellectual property, and maximizing your startup’s valuation, but it shouldn’t be just a game.
P.S. Some of the specifics here were condensed from a more extended essay on this subject, “Are Software Patents Evil?” by Paul Graham, 2006.
Software Patents Time for a Change - To learn more about this author, visit Martin Zwilling's Website.
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I always advise software startups to file patents to protect their “secret sauce” from competitors, and to increase their valuation. I don’t have much conviction that it really does stop competitors, but I do know the rule of thumb that every patent will add $1M to your startup valuation for investors, or for M&A exits (merger and acquisition). Yet the software patent process is a mess. I say this with conviction even after I survived the process, and have a software patent pending.
It’s obvious to me that the patent office has been overwhelmed by both the volume of applications and the technology for software patents, and as a result they've made a lot of mistakes. First, the process is onerous, expensive, and takes a lifetime in today’s technology (2-5 years). More seriously, it routinely grants patents that shouldn't be granted. To be patentable, an invention has to be more than new. It also has to be “novel” and non-obvious. This, especially, is where the USPTO has been dropping the ball. Consider one of the first software patents, the Amazon one-click patent by Jeff Bezos.
The problem with Amazon's notorious one-click patent, for example, is not that it's a software patent, but that it's obvious. Any online store that kept people's shipping addresses would have implemented this, and has done so in a slightly different form ever since. The reason Amazon did it first was not that they were especially smart, but because they were one of the earliest sites with enough clout to force customers to log in before they could buy something.
Applying for a patent is a negotiation. You generally apply for a broader patent than you think you'll be granted, and the examiners reply by throwing out some of your claims and granting others. So I don't really blame Amazon for applying for the one-click patent. The big mistake was the patent office's, for not insisting on something narrower, with real technical content.
A lot of companies (Microsoft and IBM, for example) have been granted large numbers of over-broad software patents, and they keep them mainly for defensive purposes. Like nuclear weapons, the main role of big companies' patent portfolios is to threaten potential competitors who sue with a counter-suit.
So what’s the answer? I would argue to simply eliminate the software patent – since software is already covered by copyright and trademark law anyway. The argument is that software by itself is information, not physical. This doctrine already holds sway in Europe, where software is--in theory, whatever national patent offices may do—not patentable. It is in the jargon not “technical.” It is like a piece of music that is loaded into an iPod, or a record placed on a record player.
Others argue that we should fix the problem by eliminating the litigation intensive model, by integrating institutional competition, and by reforming the internal Patent Office processes. To me, these all sound like band aids, rather than a real solution to the problem.
I’d like to hear some actual experiences from the real world of startups and software patents, either positive or negative. I’m a big supporter of nurturing your portfolio of intellectual property, and maximizing your startup’s valuation, but it shouldn’t be just a game.
P.S. Some of the specifics here were condensed from a more extended essay on this subject, “Are Software Patents Evil?” by Paul Graham, 2006.
Software Patents Time for a Change - To learn more about this author, visit Martin Zwilling's Website.
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