Do software patents stifle innovation?

Small and medium businesses lose out from patents, a software developer has said

Software patents are stifling innovation and should not be applied to computational information processing, according to a Victorian software developer.

Ben Sturmfels, lead developer at Sturms, said he represents thousands of members of the software industry in Australia who believe patents on computation and information processing are harming society instead of helping it, as the patent system originally set out to do.

“We believe they don’t serve their intended purpose of promoting innovation and in fact they actually discourage innovation,” he told an IP Australia event on Tuesday.

However, Sturmfels asserted he means software that involves computational information processing — algorithms.

“There’s been, for years, insightful people in the software industry that have been warning us about the problem with patents, and it’s really only coming home to roost in the last five or 10 years and it’s really becoming quite harmful, frankly,” he said.

However, Ric Richardson, inventor of Uniloc, said the patent system has served him well. Uniloc has sued 73 companies for violating its patent, with at least 25 companies settling. Uniloc most recently negotiated a settlement with Microsoft over software activation.

Richardson’s definition of a software patent is “a process or a system that will only work on one CPU as basically one algorithm, because in reality, the patent system around the world has agreed that you can’t patent an algorithm.

“But if you put that process on a computer that talks to another computer that has another process and the two together actually start to work in a system, then it becomes more of what you would call a traditional mechanical operational system.

“From the way I understand it, an algorithm is not patentable. As soon as you start introducing these other components, it becomes less and less what you’re talking about by definition.”

Richardson said that his Uniloc patent was not a software-only patent because it involves mechanical processes, physical components and multiple computers. But he said without software patents, it’s “open slather” for anyone to copy another person.

“No one who’s a fair thinker thinks that’s an honest way to treat somebody who has come up with a good idea ... Looking back at that whole process, I am so grateful for the patent system,” he said.

However, Sturmfels asserted Richardson’s patent story is not relevant to the patent debate.

“The patent system isn’t to give individual wealth to inventors – it might seem like it is, but that’s misinformation. It’s actually to benefit society, so we need to evaluate the patent system on whether it is actually benefiting society overall in whether it’s a success or not,” he said.

“Also, Ric’s success generally isn’t feasible for software companies. Large companies have a standard defence against this. They have a truckload of patents and they can bury anyone in endless litigation about this sort of stuff.

“Society’s giving up a temporary monopoly – a short-term monopoly – on these ideas, and in return they get disclosure for these ideas for the general progress of society. That’s the whole point [of software patents].”

Sturmfels added that building on other people’s ideas is best practice.

“If you’re not doing [that] then you’re doing it wrong. You shouldn’t be a professional software developer if you’re not building on the ideas of other people,” he said.

Winners and losers

Sturmfels believes the real winners in the patent debate are large corporations that have a significant portfolio of patents because those corporations can use their patents to threaten other companies for “getting on their turf”.

Large companies can also trade patents with each other like trading cards, Richardson and Sturmfels both said.

“You have this, I have that, we’ll have a disagreement and trade and in the end work out what the difference is and pay each other out, based on that process,” Richardson said.

However, Richardson said he has not witnessed smaller businesses being squashed by the larger corporations. Instead, patents make smaller businesses valuable, he said.

“I personally don’t see a lot of small guys getting squashed by big guys because in the end, if you have a patent that protects what you’re doing, they actually value that and it’s part of your whole acquisition strategy,” Richardson said.

Sturmfels, however, stood by his assertion that larger companies railroad smaller businesses with patents.

“Unfortunately, if you don’t have a bucketload of patents and you make software, you can’t compete because these guys can push you out of the market simply by burying you in patents. What we’re really giving them with this patent system is a competitive advantage,” Sturmfels said.

“Who are [the] losers? Everyone else. Small/medium business lose. It’s simply not viable to search and defend against patents. What this means is that it reduces investment in small/medium businesses because it’s a landmine out there - no one knows where they are...

“There’s even a lot of areas that it’s just simply too dangerous to go into, things like audio visual coding. You just wouldn’t even bother going there – it’s just too dangerous.”

Follow Stephanie McDonald on Twitter: @stephmcdonald0

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More about: inventor, IP Australia, IP Australia, Microsoft
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