The End Of Software - Anibal's Blog

"A patent is a set of exclusive rights granted by a state to an inventor or his assignee for a limited period of time in exchange for a disclosure of an invention." Source: Wikipedia.

The problem is what is a software patent... and the boundaries around it.

In the beginning, a mathematical formula or computer algorithm cannot be patented. But, according Software patents under United States patent law, It's patentable if it's part of a patentable "a structure or process".

Today, the lack of a right definition has produced a big mess of legal problems. Each country is a different history.

In the book "Patent Failure", patents performance was measured. A patent portfolio should create a positive incentive for innovation by enhancing the profits of companies that develop new technologies. In contrast, litigation costs exceed patent profits, that suggests the patent system is actually creating a net dis-incentive to innovation. In that case, innovative companies would be better off with no patent system at all. Bessen and Meurer's data shows litigation costs exceed profits by a wide margin (outside of the chemical and pharmaceutical industries). Without a clear software patent definition, patents are granted to every subject possible, even if it's a general obvious common sense between the skilled in the art. Today, if a software company is big and earning a good deal of money; sooner or later, it will be hit by a patent. The only defense is to begin acquiring patents, just in case; and hire good lawyers. For example, this week, a Texas judge is barring Microsoft from selling Microsoft Word due to alleged 'Custom XML' patent infringement.

This is a list of software patents. A typical classic example "Amazon.com sued Barnes & Noble for violating its "One click buy" but the case was ultimately settled. Amazon have so far failed to obtain a similar patent in Europe.". Yes, a patent for one-click buy button.

The software industry is creating "trust circles" to avoid litigation, based on licenses (like GPL3), with agreements between parties (like Novell-Microsoft), or with a specific network created to provide legal help Open Invention Network.

Of course, there is a lucrative patent industry, looking for patents, to claim royalties to any company with big pockets. For example: Myhrvold, ex-Microsoft CTO, created a kind of venture capital firm for ideas. It accumulates intellectual property in areas like communications, information technology and biotechnology, and then licenses the patents--meaning that its business model depends on robust patent laws, the stronger the better.

To increase the temperature, in the United States, the Supreme Court is reviewing the Bilski case. The decision may redefine the landscape. A very complex matter, since there's a lot of players with different point of view and acquired rights.

The two questions before the Supreme Court are whether or not a process must satisfy the particular machine or transformation test, and whether this test improperly excludes many business methods in spite of the wording of 35 U.S.C. 273, which specifically allows business-method patents.

Patently-O has a summary of the latest briefs from several actors, just a few:

• Yahoo The focus on physicality does not make sense in today's technology.
• IBM The proper test looks for a "technological contribution."
• Accenture Machine or transformation test is not a reliable indicator of anything relevant. The standard for patentability should “usefulness” as set forth in the Constitution, in the patent statute, and by the Court.

Wait, and see. No light at the end of the tunnel.

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