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Is Software Different than other Technologies? Yes and No

The USPTO’s recent initiative to hold hearings on software patents reminds us again that the software patent debate continues, as it has for over thirty years.  Most of us that have been around throughout this time continue to wonder why this issue never gets resolved.   Why does the opposition to software patents continue to be visceral among at least a vocal minority of software developers?  Why do software patents continue to aggravate many software companies, even if they are in favor of the system in general?  Twenty years ago, the cause of this frustration was laid at the feet of poor patent examination quality.  The USPTO responded to those criticisms by greatly increasing the quality of examination in the software patent arts, and arguably holding software innovation to a higher standard of patentability than other technologies.  Now, the attention is being focused on functional claiming as the boogie man.  See my previous post for what I think of that line of reasoning.

There are, however, reasons that this debate has continued on for so long, but I think they lie in a different dimension than patent quality.  Software is indeed different from many other technologies, and those differences do create a patent ecosystem that is different from most other technologies. This difference is not, however, in the nature of software innovation, i.e., that it is somehow fundamentally different than innovation in other technologies (e.g., electronics or robotic systems), but rather in the structure of the software industry.

First, software inventors and software enterprises are far more numerous and un-concentrated than in most if not all other high technology industries.  One estimate puts the number of software contracting entities or publishers in the US at five thousand or more, most with less than a dozen employees.   Moreover, there are approximately 1,000,000 programmers and software engineers in the US.  All of these entities are capable of software innovation and patenting.  Most if not all other high technology industries, by comparison, have an order of magnitude fewer ongoing operating entities or working engineers or technicians.   This means the ownership of software patents in the US is both relatively un-concentrated and that the owners are more likely to have little or nothing to lose enforcing their patents, since their enterprises are small with few customers.

Second, even a single developer can make, manufacture and widely distribute a software application without much other than a computer and an Internet connection.

Third, software is ubiquitous in the US – it is now used by virtually the entire population of the US, other than infants.

Fourth, there are ample non-practicing entities that are more than happy to help small software entities to enforce their patents, or buy them outright for enforcement purposes.

This industry structure and the ubiquity of software users could be said to be a volatile mix.  There are a relatively large number of software patent owners with little to lose enforcing their patents, and a large number of targets.  That may be more to blame for the large number of software patent suits than the quality or undue breadth of software patents.  Moreover, the solution to the software patent problem may lie more in the realm of reforms uniquely addressed to these factors, as opposed to patent quality.  No doubt reforms addressed to these factors may be difficult if not impossible to achieve, but at least someone should be thinking about it.

There is one more factor that makes software very unique — because a single person can successfully develop and distribute software applications, the experience with the system is highly personalized for a large number of developers.  Software patents, in a sense, and almost unlike all other technology areas, restrict what feels like our treasured personal freedom, and understandably thus generate a visceral reaction to those so affected.  In almost all other mainstream industries, inventors do not act as manufacturers, but are employed by them.  This decouples and depersonalizes infringement concerns from the inventor/developer.  In actual practice, it is extremely rare that a small developer would ever be sued for infringement by any entity other than a direct competitor.  In this instance, the developer would be able to quite easily see it coming, but there is a possibility that they could be sued and not see it coming.  So, I can understand why smaller developers would feel personally threatened by software patents.  And even software developers in large companies often still fancy themselves as independent souls who, in their dreams, find fame and fortune founding a start-up and striking it rich.  So, they too, often can take umbrage as much as an independent developer.


Principal & Chief Innovation Officer

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