Do Software Patents Hurt Innovation?

Software patents were born of a need to protect innovators' intellectual property. Today, however, they function less like a shield and more like a sword.

Innovation means different things to different people. I often think of innovation as not beginning where someone else began before you, but rather starting from scratch, uninhibited. Innovation can also mean starting from the same place but viewing solutions from a different angle or perspective – not reinventing the wheel, but improving it. For others innovation isn't so much about creating new things as it is about solving new problems. No matter how you define it, innovation is a societal imperative to avoid stagnation. It's the driving force behind progress.

Software Patents Vis-à-vis Innovation

So what do we do to not only encourage innovation but protect it? Dating back centuries, the answer has been patents. In the traditional economic sense, patenting exists because innovation is risky and the costs are high. Incurring the costs to bring a revolutionary idea to market only to have it imitated and reproduced would, under rational conditions, limit most would-be geniuses from taking the risk. But because the benefits to society often outweigh the benefits to the innovator, patents were created to protect innovators thereby giving them a reason to take such a risk. How do we ensure society doesn't underinvest in innovation due to potential competitive undermining? Give innovators a temporary monopoly on their intellectual property in exchange for sharing their ideas with the public.

What's at Risk Without Patents?

Given the rationale above, without patents, innovators are in a vulnerable position. According to an MIT research paper by James Bessen and Eric Maskin titled Sequential Innovation, Patents, and Imitation, "Conventional wisdom holds that, unless would-be competitors are constrained from imitating an invention, the inventor may not reap enough profit to cover that cost." The truth is, would-be competitors are constrained from imitating an invention, just like any would-be thief is restricted from stealing by laws and other barriers. Software is protected under copyright laws that inhibit other people or companies from stealing software and using it as their own. It's also worth mentioning that compiled software is quite difficult to copy, and most companies and coders compile their software for just this reason. In most cases, competitors will find it more cost effective to start from scratch rather than invest the time and resources it takes to reverse engineer someone else's software.

What's at Risk With Patents?

This is where things get tricky. Not having patents means, theoretically, we risk not bringing innovation to the public. But with patents, the risk we take on as a society may actually be much greater in practice. While the idea of protecting one's intellectual property is both logical and legitimate, the reality that has evolved around software patenting debunks the notion that they actually help innovation. What has resulted is a fear-based culture where innovators are pitted against companies that create broad patents and then sue those who infringe unbeknownst. Ironically, in these situations, patents have turned against those they were meant to protect, cornering innovation so it can neither serve the innovator nor society at large. In practice, software patents serve as an act of defense; the reason for bringing an idea to market is simply to block others who may otherwise use it better. According to Antone Johnson, former eHarmony VP and global head of legal: "As in all arms races, everybody loses (except patent litigators)."

Which is the Greater Evil?

Data reveal that some of the largest and most respected technology companies have spent more money on patents and patent litigation than on new product development. This fact alone seems to indicate the real problem: Having in place a system so flawed it results in the opposite of its intention. In my opinion, true innovation doesn't exist with interference. What do you think: Do software patents help or hinder innovation?

Tags: Patents