Opinions on patents have been flying about lately. Because the US Patent and Trademark Office has issued a few software patents that are actually silly, some observers conclude we should stop granting patents for software altogether, and maybe even abolish the whole patent system. But we should not stop granting patents for truly innovative software or end our patent system just because a few frivolous patents were mistakenly issued.
Foolish patents have been around for a long time, and are not issued only for software. Years ago, before every supermarket checkout station had a conveyer belt, register clerks had a device they used to pull groceries forward for checkout. It was a familiar sight in every market, essentially a big version of a casino croupier’s rake, a low, three-sided bottomless box with an upright handle at the open end toward the register. You would put your groceries on the counter inside the three sides for checkout by the clerk. When it got to be too long a reach for items at the back, the clerk would move them forward by pulling the handle, like a croupier pulling in chips with a rake.
I was surprised at the time to learn that a fierce battle was raging over patent rights assigned for this simple device. How could the patent office assign a patent for something so obvious? After all, wasn’t it, like the croupier’s rake, just another variant of the ordinary garden hoe, in use for at least ten thousand years?
So although recent comments have focused on software, it isn’t just for software that the patent office has occasionally granted seemingly absurd patents. Many critics cite recent frivolous software patents to argue that patents should never be granted for anything implemented in software, and maybe we should even abolish patents altogether.
But consider this:
Suppose you are an angel investor, looking to invest $1 million in a fledgling software venture. You are approached by two promising companies, each hoping to attract your investment. Each needs development funding to bring its idea to fruition. You estimate that prospects for successfully completing product development are about the same for both companies, and both are addressing attractive new markets. But there is one significant difference between the two.
The CEO of Company A believes that far too many frivolous patents have been issued, especially for software. Society would be better served if there were no software patents at all, the CEO believes, since such patents actually stifle innovation. Company A intends to rely on its nimbleness and technical excellence to thwart any attempt by a bigger industry player to run away with its “secret sauce” after it is introduced to the marketplace. It plans not to apply for patents.
Company B on the other hand is headed by a CEO who is taking steps to protect the intellectual property it is developing. The CEO believes that when an innovation is introduced to the world and it begins to gain acceptance by customers, all too often a better-funded industry participant quickly reverse-engineers the innovation and takes over the market for it, to the detriment of its originator and its investors. To avoid being rolled over like that, Company B has already filed for patents to protect its intellectual property.
Will you put your $1 million into Company A, or Company B?
Which company is more likely to raise the capital needed to complete development of its innovation, allowing society to sample its possible benefits?
Should software startups shun patents, leaving their ideas open to exploitation by others with more capital?
Should software patents be eliminated, making it more difficult for companies to raise the risk capital needed to develop innovations?
Even NIH and NSF, in disbursing Small Business Innovation and Research grants, want recipients to protect resulting intellectual property with patents, to help assure that recipients can attract the additional capital needed to make results actually available in the marketplace.
Let’s not forget that the patent system was created originally to benefit society by encouraging innovation, and it does so still today. On Lincoln’s birthday last year, in an eloquent speech from the Illinois state capitol in Springfield where both had served, President Obama quoted some stirring words of President Lincoln on the valuable benefits contributed to society by innovation.
The full excerpt from Lincoln’s speech, most of it omitted by Obama, reveals that Lincoln had been passionately defending the patent system. He said “Next came the patent laws. These began in England in 1624, and in this country with the adoption of our Constitution. Before then any man [might] instantly use what another man had invented, so that the inventor had no special advantage from his own invention. The patent system changed this, secured to the inventor for a limited time exclusive use of his inventions, and thereby added the fuel of interest to the fire of genius in the discovery and production of new and useful things.”
(Lincoln himself applied for several patents, was granted one, and remains the only US president to hold a patent.)
Let’s end frivolous software patents, yes. But despite its lapses, the patent system has served us well. Sometimes software embodies true innovation. We should use the patent system to keep encouraging such innovation. Ending software patents would greatly decrease venture capital available for software development. Many valuable innovations would never attract the funding needed to reach the market, and society would never benefit from them.
So let's keep our patent system, and keep granting software patents, but only for true innovations.