A Brief Note on Software Patents

Nah Soo Hoe (May 2005)

There is a big controversy going on currently about the patentability of software and the way patents offices (in countries which recognise software patents) process software patent applications.  Software is patentable in some countries e.g. USA, Japan, Singapore.  In these countries software patents may be granted to functional aspects of software which are considered to be innovative and non-obvious.  The expressive elements of code are not patentable, instead, they are covered by copyright to which almost all the countries in the world subscribe to.  While many countries still do not recognise software patents (Malaysia is one of them), they are increasingly coming under pressure from those countries in the developed world which recognise them, to change their postion.  Very often this is done through indirect means e.g. by way of provisions in trade agreements and economic co-operations and it may not be long (if not already) before this issue is brought up to be considered by the relevant bodies/authorities in Malaysia.  As stake holders in this, members of local ICT bodies and associations like the MNCC should be aware of the pros and cons of software patents and understand the issues concerning this in their  proper perspective within the local context.  Only then can their views be properly represented by their organisations to the government over this matter.

Case for Software Patents

The proponents of software patents say that as long as a country recognises the patent system as a means to reward individual entities for technical innovation and invention it should apply equally to the functionalities found in software.  With this, as with a physical hardware invention or component, the person or company is appropriately rewarded by the government and is granted a set of exclusive rights for a limited amount of time.  Only with this can the country appropriately reward and in doing so encourages technical innovation and inventions.  In fact, locally, many people (including some heads of corporations and senior government officials) are equating the number of patents filed and accepted to the innovativeness and creativity of a company or  country.  So as far as software is concerned it is the same and the software owner or developer needs patents to protect his software innovations against competitors and others who may want to steal his ideas and software functionalities.  The patent system if applied to software will offer    protection for the lone inventor or small-time developer against his ideas being ursurped by larger developers and corporations.  They also argue that since the patents office allow only real inventions and innovations to be patentable there should be no fear of abuse.  So when viewed in this manner, software patents are good for innovation, especially for small software companies and developers since they can come up with  good ideas, patent them and then collect royalties from some big multinational company when it uses these ideas in their own software and/or products.

Case against Software Patents

The detractors of software patents say that it is almost impossible to create software without building on the previous ideas and work of others.  For example, there is more to a word processor than the functionalities of a spell checker or some font definitions.  So if, for example, the basic functionality of a spell checker is to be patented, any one else who wants to develop text-based software utilties may inadvertently infringe on this patent.  So one has to be aware of this even before a single line of code is written.  While by itself this may not seem like too big a hassle to check, in practice, for any single piece of useful software, there can literally be thousands or tens of thousands (or more!) of such ideas or functionalities and it will be almost impossible to ensure that no patents are violated.  The small and independent developer will face a huge challenge if he wants to avoid infringing a patent as he will need to expand considerable amounts of time and financial resources to perform the check.  Software creation and innovation will suffer.  For example, the Internet and WWW will not be what it is today if most of their technologies and functionalities were patented and the early Internet software pioneers were not able to build on each other's ideas and functionalities. The worse part is that more likely than not, the poor owner of the  software will only know that he has violated some patent after his software becomes fairly widely used and the patent holder starts to sue him.  He will have no choice but to either contest the lawsuit or pay up the royalties demanded of him. 

Some may argue that a small software company may benefit if it possesses some important software patents and so it is able to collect a large amount of royalties from the bigger companies which need to incorporate these in their products.  In reality if the small company were to try to do that it will probably be counter sued by the bigger companies for infringing on their patents instead.  Thus a strict software patents regime only benefits big corporations with a huge arsenal of registered patents and legal resources.  These will have the ability to cross-licence patents with other corporations or businesses and so they will not be sued for patent infringements by other companies and patent holders.

At the national level, less developed software economies will suffer as, collectively, their indegenious companies will probably possess only a relatively small number of patents to benefit from cross-licensing.  The software development entry-level is raised and the cost of software will rise due to patent royalty payments leading to increased cost of doing business and providing services across the board.  (However, note that an individual/company may benefit if it has a patent that it can claim from some widely-used software.)

Another reason software patents do more harm than good is that the entry level for software inventions or innovation is very low, unlike physical inventions or pharmaceutical research.  With the current state of computer power and Internet access, almost anyone with a personal computer can tinker with software creation and development and in doing so come up with all sorts of ideas for functionalities in software and file for patent protection.  Now in theory, the patents office is supposed to scrutinise patent applications and reject non-innovative and obvious or trivial ideas.  It is also supposed to reject a patent if the idea or function is already in use in some other software.  However, in practice all over the world we find that contrary to this, software patents are granted too easily.  The patents office is usually ill-equipped to search for software functionalities already in use (“prior art”) when considering a patent application.  Patents are granted for broad, general and very often trivial concepts, e.g., double-click for handheld devices, progress bar on a computer screen, etc.  (The reader is encouraged to visit the website, http://webshop.ffii.org, which shows how easily some 20 software patents infringement may be made in the creation of a typical e-commerce site.)

We should also note that in the above arguments against software patents there is no distinction about the type of software that will suffer.  It will affect all types of software, proprietary as well as open source, commercial as well as non-commercial.

Conclusion

In my view, we should reject the patentability of software altogether.  With the recognition of patents in software, on the whole everybody loses except possibly big corporations with huge patents arsenal.  A few individuals/organisations with some valid innovative patents or opportunistic individuals and/or organisations with submarine patents may also benefit but by and large the fledgling software industry in this country will suffer irreparable damage and software innovation will be retarded.  An important direct consequence of this is that the country's ambition to become a technology producer will be hampered as today software is a key component of any technology innovation or invention.  The intellectual property component of software is currently adequately protected by the country's copyright laws.  If need be, stricter enforcement of these laws should be done.