A Generation of Software Patents Examined

pieterh writes "Boston University's James Bessen has published a landmark study [abstract; full paper available at the link, free of charge] on a generation of software patents. Looking at almost 20 years of software patents, he finds 'that most software firms still do not patent, most software patents are obtained by a few large firms in the software industry or in other industries, and the risk of litigation from software patents continues to increase dramatically. Given these findings, it is hard to conclude that software patents have provided a net social benefit in the software industry.' Not that this surprises anyone actually innovating in software."

Oh Patents

[Morphine007]

They're definitely a contributing factor as to why I'm still in academia, rather than trying to start a software shop with my CS degrees.

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[Morphine007]

I guess I should say "Oh Patent trolls" and not just "Oh Patents"

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[jellomizer]

Really is that really a big issue? For most firms it is small... Really small issue. The trolls and the big guys won't even notice you until you make it big, then you can usually work out some deal so you don't loose your shirt. Perhaps you should leave Academia for a while and see how the rest of the world works, consider it a Sabbatical. In actually the For Profit industry isn't as bad as it seems.

Re:Oh Patents

[Anonymous Coward]

The current case of LodSys (Google it or search on SlashDot) suing small iOS app developers and individuals is one example that little people can get in big trouble because of software patents.

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[Morphine007]

Exactly.

Right now, the most attractive market (or means of distribution) for a "software tycoon in training" is the smartphone market (specifically Android and iPhone, since their distribution methods have the lowest overhead for the actual software authors).

The LodSys bullshit has definitely left me feeling a little gun-shy...

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[brainzach]

The biggest obstacle of breaking into the app market is creating a quality app and marketing it so people will buy it.

The Lodsys patents are completely unfair and we don't like being taken advantage of, but the amount of money they are asking for is less than 0.5%. It won't stop anyone from implementing their killer idea to make money.

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[The Dawn Of Time]

Yeah, and sometimes people get murdered on the street. Doesn't mean you can't leave your house, or that all of society is fucked.

But I get it - I should demand everything for free, because... I don't get that part, but fuck it. I should demand everything for free.

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[Batmunk2000]

I agree. This is an issue with a lot of hype and no bite. From what I have seen, patent lawyers have stirred up this pot to make some coin from large companies. Sure there have been some high-profile lawsuits, but it's hardly an epidemic nor is it shutting out innovation. The lawsuits I have been involved in or witness to - common sense has prevailed or, *gasp*, would-be borderline tech wasn't pursued and actual original solutions were implemented instead of copycat BS! If the industry should be outraged o

Re:Oh Patents

[mellon]

You know, when I see a 700 million dollar settlement over a garbage patent that was later overturned, and I think about how that would have affected me as a small software developer, what I do *not* think is "all hype and no bite." What I think is "I could lose my house." And so I work for a corporation, so that if/when that corporation gets sued out of existence, I will be on the far side of the firewall, and all I will lose is my job.

People who say this is a small issue that won't effect them either aren't software developers, or are whistling past the graveyard.

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[mooingyak]

You know, when I see a 700 million dollar settlement over a garbage patent that was later overturned, and I think about how that would have affected me as a small software developer, what I do *not* think is "all hype and no bite." What I think is "I could lose my house." And so I work for a corporation

You can start your own corporation. You have to keep your personal assets and corporate assets distinct from one another and some other fun accounting headaces, but it serves as the exact protection it sounds like you want.

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[Oxford_Comma_Lover]

You know, when I see a 700 million dollar settlement over a garbage patent that was later overturned, and I think about how that would have affected me as a small software developer, what I do *not* think is "all hype and no bite." What I think is "I could lose my house." And so I work for a corporation

You can start your own corporation. You have to keep your personal assets and corporate assets distinct from one another and some other fun accounting headaces, but it serves as the exact protection it sounds like you want.

Which is why we keep the lawyers. Risk management.

Re:Oh Patents

[mellon]

Actually no, you can't start your own corporation. I mean, you can, but it won't protect your personal assets if the person suing you can show that the corporation exists only to serve as a firewall. If the corporation is a real company that employs real people, that's a different story, but if it's just a shell, it's of very limited value. The only lawsuit it will protect you from is one where the additional cost of making the case that the corporate veil should be pierced is prohibitive. That's not the sort of situation that you'd be in if a patent troll came after you and you had significant assets.

Think about how it looks to a court: you make a corporation, and the corporation makes a bunch of money, infringing some patent in the process. All of that money is paid out to you, or else goes to pay the minimal expenses that are involved in operating a corporation of this type. And then when someone comes after the corporation to be made whole as a result of the patent infringement, there's no money, because it's all been drained into one bank account: yours. Making the case to pierce the corporate veil here is a slam-dunk.

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[Teancum]

Actually no, you can't start your own corporation. I mean, you can, but it won't protect your personal assets if the person suing you can show that the corporation exists only to serve as a firewall. If the corporation is a real company that employs real people, that's a different story, but if it's just a shell, it's of very limited value.

Even being a real company isn't going to protect you if you are a principle shareholder and member of the board of directors/VP or CEO. You can personally be sued for damages if that is the case. As a middle manager or mere peon, yes it can protect you. As a minority shareholder you are likely going to be protected as well (particularly if you weren't involved in any decision making that led to patent infringement).

But if you actually own the company, forget it. Your assets are as good as gone if you lo

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[tehcyder]

As a minority shareholder you are likely going to be protected as well

As a shareholder of any size, your liability is limited to the nominal value of your shares. That is the whole point of having limited liability companies.

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[Teancum]

Not quite. You can have liability that goes beyond the value of your shares if you are a member of the board of directors or are one of the major officers of the company.

BTW, that is why they get the big bucks too, as they do take that personal risk when running a company. If any criminal conduct was happening while you were running the company, that can even compound the situation even further, and shareholder lawsuits can really ruin your day if you aren't careful, where your personal assets can be at r

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[terminalhype]

"Perhaps you should leave Academia for a while and see how the rest of the world works, consider it a Sabbatical. In actually the For Profit industry isn't as bad as it seems."

Or..."Come into my parlor" said the spider to the fly.

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[Anonymous Coward]

Actually the problem is when you're starting to get big. Being small isn't an issue and being huge isn't an issue it's the in between when they kill you and force you to sell your ideas to someone who can afford to defend against the lawyers. If you explode onto the scene alla Facebook then no worries because there isn't time for the slow moving legal system to get you and by the time they get there you're 100% right you can work something out.

Most firms aren't like Facebook however and experience a more

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[Morphine007]

Again, the LodSys example mentioned by an AC just a few posts up flies in the face of the "it only matters if you become successful" argument. Sadly... =(

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[The Dawn Of Time]

Yeah, one example in an economy so big no one person can even comprehend how to comprehend it. OH NO THE SKY IS FALLING.

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[tehcyder]

They're definitely a contributing factor as to why I'm still in academia, rather than trying to start a software shop with my CS degrees.

Yes, because no one else is able to open a "software shop", anywhere, so you might as well just give up.

For "contributing factor" read "limp, largely theoretical excuse".

Too Expensive

[jellomizer]

Patent process are too expensive for the average Programming shop. As well many of their innovations are not produced in systems for the general public but for their customer. The time it would take to write up the patent application get it approved etc... Could takes days or weeks of work away from working on a project that can bring revenue now.

Big companies that can produce software to a large scale (write once copy a million times) have the ability to deal with Patents, as once the product is released it is making money and will bring in a stream of revenue for a while, giving time to make formal patents and do R&D.

Interesting Points

[Pop69]

The language in the US Constitution says

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

If software patents do not promote the progress of science and useful arts are they not unconstitutional ?

Re:Interesting Points

[Maximum Prophet]

If software patents do not promote the progress of science and useful arts are they not unconstitutional ?

Lawrence Lessig tried to argue that about retroactive copyright extension before the Supreme Court. He lost.

Re:Interesting Points

[Pope]

That's because his argument, as told to the Court, sucked. He wrote about how he botched it afterwards.

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[NoNonAlphaCharsHere]

Argue once, fail forever. Not on the basis of the argument itself, but on HOW the argument was made. Gotta love the legal system :(

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[chemicaldave]

SCOTUS, understandably, simply does not have the time to hear cases twice. It's not the legal system's fault Lessig botched his argument.

Re:Interesting Points

[robot256]

So? Are you defending a system that relies on a single person's single argument to save the entire society from an unconstitutional law that should never have been passed in the first place? Sounds like there's a bit of a weak link in the chain.

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[chemicaldave]

A single person's argument? You're assuming that Lessig's side would have won the case. As if the outcome hinged on his argument and his alone. No. Supreme Court cases rely on many peoples' input. Given how many cases the SCOTUS must hear each year, they should not be required to rehear a case simply because someone did not come prepared.

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[dachshund]

That's because his argument, as told to the Court, sucked. He wrote about how he botched it afterwards.

Whatever. I've read Lessig's apologia, and while I appreciate that he's humble about it, there was absolutely no way that the court was going to overrule Congress and the largest media companies in America.

He made a legitimate constitutional argument, the court sidestepped it, and that was that. It would be nice to live in the world where the Supreme Court cared about copyright terms, but we don't live

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[jellomizer]

That is not not false. Well it is a question that will need to be brought up in court. Because even though only large companies are seeming to use software patents, it really doesn't prove or disprove that it is hindering Science and Arts.

I can use double negatives too.

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[drb226]

not not false...I can use double negatives too.

I believe, sir, that was a triple negative. Also, English questions phrased "is it not _?" usually are an assertion of _, so in this case the double negative doesn't actually double negate. It turns into an assertion of "unconstitutionality".

Re:Interesting Points

[Morphine007]

I don't think so.

The argument being made is that securing those rights (at least, using the current methods) doesn't actually promote that progress. So I suppose it could possibly be interpreted that the current system doesn't fulfill the intent of that portion of the constitution. Which might make the current process for obtaining a patent unconstitutional.

However, to claim that it makes patents themselves unconstitutional doesn't seem valid.... but, again, one could draw the conclusion (with a lot more evidence, I'd think) that progress in science and useful arts can't be promoted via granting parties exclusive rights to writings and discoveries at all... which would mean that the portion of the constitution that you quoted would have to be deemed as being sel-conflicting and therefore stricken from the constitution or amended... and while that claim might actually be true, I don't think getting it amended would be easier than revamping the patent system/process

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[Anonymous Coward]

Even if that were a valid legal theory (ie that empirical evidence of software patents inhibiting innovation could make them illegal), you could never make the showing. The companies acqiring software patents are also spending billions in R&D, so you would have to proove that eliminating software patents wouldn't simply redistribute the innovation, or cause a net decline.

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[Morphine007]

In the case where companies with a large patent portfolio are actually spending billions in R&D, I'd say you have a massive point, and that any claims made by anti-patent folks that patents are stifling innovation would be extremely difficult to substantiate... and that those claims may not even have any basis in fact.

However, in the case of companies with a large patent portfolio that do little to no R&D (with companies whose sole business case is patent trolling being the most obvious case), I wou

Anecdotal evidence that they don't

[Beryllium Sphere(tm)]

I got called in for a deposition when $BIGCOMPANY was sued for infringing a patent on $OBVIOUSTECHNIQUE in $FIELD. The level of inefficiency in the proceedings was staggering, particularly since the project I was on hadn't even used $OBVIOUSTECHNIQUE. One of $BIGCOMPANY'S attorneys told me that progress in $FIELD has halted due to fear of patent litigation, which anyone much smaller than $BIGCOMPANY couldn't possibly afford.

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[presidenteloco]

You are in deep sh$t!

Please reference US Patent 94362451: A method and process of generalizing textually rendered statements by the inclusion of variables.

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[Fjandr]

No, since descriptive clauses like "To promote the progress of Science and useful Arts" have no force in and of themselves. They give the reasoning behind why a power is granted government, but don't prevent that power from being used for other things so long as it does not exceed the scope of power granted.

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[Grond]

This is not true. From Morton Salt Co. v. GS Suppiger Co., 314 US 488, 492 (1942):

The grant to the inventor of the special privilege of a patent monopoly carries out a public policy adopted by the Constitution and laws of the United States, "to promote the Progress of Science and useful Arts, by securing for limited Times to . . . Inventors the exclusive Right . . ." to their "new and useful" inventions. United States Constitution, Art. I, 8, cl. 8; 35 U.S.C. 31. But the public policy which includes inve

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[Fjandr]

Interesting, I was not aware of a single ruling holding that a descriptive clause carried any force to limit a power granted to Congress.

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[Fjandr]

After reading the ruling, it seems we're talking about two different things. I was talking about the scope of powers granted to the government. The government's power is not constrained to limit legislation governing the issuance of patents by the "promotion" clause of the Constitution. The ruling limited the scope of contract terms that a patent-holder could impose in return for licensing a patent.

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[brainzach]

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

Copyrights and trademarks are the tools to protect the rights of inventors and promote progress of the software industry.

Most of the value in the software industry comes from the implementation of ideas and not the idea itself. If you spent millions of dollars developing a type of software, chances are a competitor will have to do they same so there are already barriers of entry.

Copyrights are able to protect someone from directly copying your work, but they don't stop anyone from independently implementin

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[booch]

Unfortunately, the Supreme Court said that Congress should get to decide what it means to promote progress.

direct link to the paper

[ravenII]

A Generation of Software Patents http://www.bu.edu/law/faculty/scholarship/workingpapers/2011.html [bu.edu]

Really useful

[ciaran_o_riordan]

To slashdotters, this may be "duh" science, but it's really important to have this on paper when we talk to judges and legislators. Otherwise, we're left explaining the problems and hoping that the legislator will agree that our logic is "obviously" correct.

Bessen also co-authored Patent Failure with Michael Meurer and a previous study An Empirical Look at Software Patents, along with Robert Hunt.

http://en.swpat.org/wiki/Studies_on_economics_and_innovation [swpat.org]
http://en.swpat.org/wiki/James_Bessen [swpat.org]
http://en.swpat.org/wiki/An_Empirical_Look_at_Software_Patents [swpat.org]

Incompatible

[Nethemas the Great]

The patent process takes longer to complete than the lifespan of most software products. Writing software patent applications would pull valuable engineering resources away from where they're needed most, engineering. If everything that "could" be patented "was" patented then no one would be able to write software without infringing upon someone else's patent. This is largely the case already. Most dev houses get away with infringement because they are either not big enough to bother frying and/or the infringement is non-obvious and they fly under the radar. The expense of patenting from authorship, to lawyers, to application, through to approval is prohibitive. Enforcement of patent rights is reserved for those with war chests large enough to field the researchers, lawyers and court costs, etc..

Has anyone done a statistical study of obviousness

[presidenteloco]

In US software patents?

i.e. Get together a panel of computer science professors and experienced software engineers / architects / guru coders (i.e. practitioners in the field) and have them assess a random sample of software patents with an assessment: definitely obvious to a competent practitioner in the field, probably obvious, , probably not obvious, definitely not obvious.

I'd be really curious about the result. (Maybe it needs to be done on a claim by claim basis, but it would be interesting even to see

enforceability

[flipk]

My biggest problem in getting my patent applications approved has always been "enforceability." One example was a method for maximizing PCI bus utilization in a many-board CompactPCI cage (it was a sort of token-distribution method for preventing wait-cycles and bus-to-bus bridge fifo overruns, kind of silly in retrospect). The patent review board looked at the stuff I've written and says "yeah, that's a really good idea, but how would you ever detect that a competitor's product is violating it?" Which