The following is a paper I wrote for my Computer Ethics class during my master's at LUC.
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The intention of the patent system is to protect the small inventor and thus promote invention. Unfortunately, in the case of software patents, it doesn't work that way. Small inventors, as we'll see, get more harm than good from the current system of software patents, and innovation is hampered instead of promoted.
The first problem in software patents is that it is not about patenting a single implementation of an idea (like in the Pharmaceutical industry, where a patent is granted for one chemical formula), it is about patenting the idea itself. And the patent grants a monopoly over the use of that idea for a long period of time. As anybody familiar with software development knows, a program is usually not based in any one single idea, but in a compound of ideas, most of them already in use.
The second problem is the way in which the Patent Office bases its decision for granting a patent in this area. Firstly, they try to find out if there is any prior art regarding the patent application. But this is a very difficult task with software patents because a lot of prior art is in the form or books, which are not included in their database, or it is just part of the industry's "folklore", which means it's not written anywhere but everybody knows about it. Secondly, they consider if the invention to be patented is non-obvious, which is something very subjective, and difficult to determine by a person who is not a professional in the software industry.
The third problem, and maybe the most important one, is that it is almost impossible to know how many patents may cover a program, due to the great number of them, the obscure language they are written on, the lack of a good classification, and the fact that patent applications that are pending are secret (but retroactive). Small companies can easily infringe someone else’s patent without even knowing it. Trying to find out if a program infringes any patents is costly, and the legal process of defending yourself when being sued for patent infringement is event costlier. Most small and medium companies cannot afford it.
If a company wants to use an idea that has been patented from someone else, they can try to license it. The owner of the patent does not have the obligation to license it, though, even if he is not using it. And when the owner does license the patent, it is usually for a sum around 5% of gross sales of the software product. This is already a very high sum, which might make an inventor think it twice before deciding to commercialize a software product, but if the program needs more than one license it’s almost impossible to get it to the market. The profit margin is gone.
Big companies can avoid the hamper to progress that software patents are thanks to cross-licensing, but small companies and inventors cannot. They don’t own a sufficiently large number of licenses to force big companies to cross-license with them when they want to use a patent that a large company owns. On the other hand, it is very difficult that these small inventors can benefit from patents, because their programs probably infringe the patents of big companies, who can force them to cross-license with them. The only case in with a small company cannot be forced to cross-license is when this company is patent troll.
As we can see, the group that is supposed to be benefited by the software patent system, small inventors, is not benefited at all. They don’t have enough resources to participate in the cross-licensing game, to confront a claim of patent infringement, or to make an exhaustive research to make sure they don’t infringe anybody else’s patent.
Big companies are more benefited than harmed. They can force small companies to cross-license with them, thus being able to use their ideas at a very low cost, and is not usually a problem for them if the idea has been patented by another big company, because they can also cross-license. Unfortunately, this does not mean that their investment in Research and Development will be higher; big companies already own vast patent pools that they can use as leverage.
One last issue to consider is that the investment in software development is not that high that it is necessary to protect the idea for long time to let the creator recover the losses, or they would not invent any more. Software development has the unique quality of requiring very low investment to produce and commercialize.
There are two groups that are clearly benefited from the current patent system: patent trolls, and patent lawyers. Nevertheless, these are not the groups that the system intended to protect, and their contribution to innovation is close to null.
Finally, we have the general public. This group is the biggest one, and we think it would be benefited by the modification or suppression of the current patent system. With the current system the offer of programs is more limited than if patents didn't exist, and thus prices are higher. If there were no software patents, there would be a lot more of cheaper high quality software that would solve many of the issues that companies and individuals face in different areas of their lives.
From a utilitarian perspective we can conclude that the way in which the current system is implemented in the US is not good. The disadvantages are bigger than the advantages.
One solution would be to get rid of software patents completely. Another solution is the one proposed by John Preston, President and Chief Executive Officer of Continuum Energy Technologies LLC, and Senior Lecturer at the Massachusetts Institute of Technology, in which the patent holder has to license its patent for a pre-established fee. This would eliminate the advantages that big companies, with big patent pools, have over small ones.
There are also efforts that seem to go in the direction of helping the patenting process. For example, Google is scanning millions of books, which might help in the search of previous art. They also created a patent search engine, which might help inventors finding those that cover their program. Nevertheless, these are limited solutions and a change in the administration's policies is needed to get to a system that is fair for everybody, both big and small inventors, as well as the general public. Our society can greatly benefit from the advancements in software, and software has the unique qualities of zero cost of reproduction, and zero barriers to creativity, that could make for an exponential development of the world we live in.
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