Tuesday, August 23, 2016

Software Patents



<br /> topic - softwares<br />


Introduction


The European Council recently approved changes to the European Union’s Software Patents Directive that will lead the way to widespread patenting of software in Europe.[1] If the changes are ratified without modification, then the European Patent Office (EPO) will have the ability to grant software patents in much the same manner as the United States Patent Office (USPO). This will lead to many of the problems that have arisen in the United States. For instance, the USPO is infamous for issuing patents for obvious software process, such as Amazon’s 1-click shopping. The granting of these obvious patents has led to a flurry of litigation, where the patent holder tries to extort licensing fees for alleged “patent infringement”. This has led to corporations to try and patent “everything under the sun”, in order to protect them from getting sued and to create a platform to launch their own litigation/licensing extortion from their competitors. It has also created a flood of patent applications for software, giving the overworked USPO little time to examine and research for any “prior art” that would invalidate the patent application.


After giving a background on software patent history in the European Union, this paper will attempt to analyze the ethical issues of software patents. Do they bring more harm to society than good? Do they promote innovation and research or do they stifle invention? These questions, along with other issues dealing with software patents, will be examined from a variety of ethical perspectives.


Background


Initially, software was not patentable under European law. This was decreed in the Article 52 of the European Patent Convention of 1973, which states that “mathematical methods, intellectual methods, business methods, computer programs, presentation of information etc are not inventions in the sense of patent law.” However, small changes in European Patent law over the years has led to the patentability of “process claims”, “program claims”, and even “computer-implemented inventions”, which has led to 30,000 software related process patents.


In 2002, the European Commission's Directorate for the Internal Market proposed the creation of a Directive to clarify the patentability of computer-implemented inventions and reduce excess at the EPO. However, the Directive only put on paper what the EPO had already been practicing, which was granting unlimited patentability.


In September of 2003, a set of amendments to the Directive were voted in by the European Parliament. These amendments reiterated the non-patentability of software and business methods, in effect, strengthening the European Patent Convention of 1973. However, in May of 2004, the European Commission approved a draft of the Directive, with many of those amendments removed. According to Gael Duval of MandrakeSoft Linux, the amendments were removed by those with a purpose:


"They are mostly representatives from the national patent offices, backed by the heads of the legal departments of some big industrial companies, all of whom have a common interest. More patents mean more power for them, irrespective of the harm that will be done to the economy at large, and even to their own companies"

Now, the Directive looks like original proposal of 2002, thereby, opening the floodgates to software patents. The European Parliament will vote on the proposal in the fall of 2004 to make it permanent law.


The question then becomes, should the European Union allow software to be patented? How ethical are software patents in general?


Rights Analysis


Stanford Law Professor, Lawrence Lessing discussed the merits of why patents exist:


“Patents are a form of regulation. They are a government-backed monopoly that can extend for 20 years. This regulation is sometimes thought necessary to help spur innovation. Without it, ideas would be too easily stolen; investors, in turn, would not invest in new technologies. Patents, the argument goes, help create incentives to innovate.”

Patents protect the rights of the inventor to be compensated for what they create. All of the effort, specialized knowledge, labor, and time spent to research and create their invention have value. If this invention could be copied after all that work, why would anyone want to innovate? There would be no reward for the endeavor they undertook for their creation. Therefore, from a rights perspective, patents for software are justified.


Fairness Approach


Patents protect the inventor from having their work stolen from them. It would not be fair for an inventor to spend years and years on some kind of creation, only to have the idea easily copied and reproduced by others who did not expend any kind of effort. Therefore, from a fairness perspective, patents are justified.


As mentioned earlier, the USPO has issued patents for what many perceive as simple and obvious business methods such as Amazon’s 1-click shopping patent. Jack Slobodin, a patent attourney, said, "Something can be simple, but we shouldn't be deceived by this. If no one has done it before or thought of it, it deserves a patent. Like the paper clip, or the Post-it note."


But, is software the same as these physical inventions mentioned? Not according to Europe’s Foundation for a Free Information Infrastructure (FFII):


What if patents actually lowered investment in research and development? That would be counter to what they were intended for since they are supposed to provide an incentive to do research. However, a study in 1999 by technologist James Besson and economist Eric Maskin concluded “that software patents in the US actually harmed investment in software research and Development” and that “R&D in software actually fell after patents became common.”[8] Lessing argues that in the software industry, “innovation is sequential and complimentary”.[9] Stifling research and development would lower the number of innovations in software, impeding its progress. This no doubt creates more harm than good, and therefore, from a utilitarian perspective, software patents are bad.


The holder of a patent is granted the right to monopolize that invention for 20 years. This monopoly gives the patent holder the ability to control the price of their invention and charge whatever they say fit. Since there are no competitors, the price can be raised artificially high. High prices reduce demand, and less of that good is produced. If this invention were socially beneficial, such as a cure for AIDS, then overall society would lose out since less of that cure would be produced. This was observed by the economists Michele Boldrin and David Levine:


“Typical economic models recognize that intellectual monopolies are inefficient because they generate what economists call “deadweight” losses. These losses arise because monopolies charge prices that are higher than are socially optimal. The high prices reduce demand, which in turn leads monopolists to produce less than is socially optimal.”

Common Good Approach


One side effect of software patents is the litigation that occurs if software is found to be infringing. Therefore, companies take great pains and use a lot of resources to make sure their work does not infringe on anyone else’s patent. Say two different software companies were developing software to analyze the human genome for cancer research. To make sure they don’t infringe on each other’s patent, they spend some of their research and development money to make sure they don’t “step on each other’s toes” patent-wise. In terms of the common good of the people, this is a waste of money. We have two different means for the same beneficial ends. Wouldn’t it be more beneficial for the common good of the people if they could combine their work and not dedicate resources to avoid litigation? Boldren and Levine observed this in their hypothetical analysis of cholesterol-lowering drugs:


“The R&D investment to produce such “me-too” products is socially unnecessary. This development effort could be put to more socially beneficial ends if competitors could produce generic versions of the initial cholesterol-lowering drug.”

Virtue Approach


United States patent law has it’s origins in the Constitution. Article I, Section 8, Clause 8, says that: "Congress shall have the power …. [t]o 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."[12] Thus, they intended to reward the inventor with “a limited monopoly on using, making, and selling his inventions.”[13] What if the inventor never intends to use, make or sell his invention, but only to threaten litigation to collect licensing fees? That is exactly what is happening today in the United States as reported by Bob Sullivan of MSNBC:


“The chaos of the patent-granting process in the Internet and software realms has made Eureka moments just as common in the courtroom as in the invention laboratory. There's a long line of celebrated cases involving Web sites deploying commonly-used Internet technologies — in patent lingo, business methods — that are suddenly challenged by a patent holder who seemingly emerges from nowhere. Often, the plaintiff is a small intellectual property firm with big plans to cash in. And increasingly, small companies with no legal budget are being targeted because they are the least likely to mount a challenge.”

Large corporations also follow this practice. The largest holder of patents in the United States is IBM. Companies like Microsoft file thousands of patents per year to build their portfolio of patents, and they can be used in a threatening manner:


“Granting patents on some of those rules will cause problems for
many developers, especially small ones. Large companies can easily afford the
legal fees to register patents, and the legal fees to seek compensation from
smaller companies using 'their' algorithms.”

From a virtue perspective, it seems these corporations/intellectual holding companies are not filing patents in the true spirit for what patents were created for. They have no intention of ever creating their inventions, and will only use them to collect fees or hinder the progress of competitors. One questions their honesty, compassion, and fairness when they file these lawsuits. It is because of that, they are not acting with virtue.


Conclusion


Based upon the ethical analysis of software patents, the European Union should reinstate the amendments to the EU Software Patents Directive to disallow the patenting of software. Though there are some compelling reasons to keep software patents from a rights and fairness perspective, but in the end, they cause more harm than good. The nature of software, which can be analogous to writing a symphony or a recipe, does not lend itself to patenting. Copyrighting software is the proper way to protect that body of intellectual property. Software is based upon abstract ideas and principles that cannot be patented, such as mathematical formulas or algorithms. It is this combination of ideas that form the basis of software. As seen in the United States, the patenting of software only creates a quagmire of litigation and frivolous patent lawsuits that suppresses true innovation in the software industry. Until true reform in the United States occurs, proving that patents do not hinder progress in software, the European Union should hold off from granting software patents.


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