In Defense of Software Patents

Software patents are under attack and have been for quite some time. The debate is most polarized between small software start-ups and large multi-national technology companies who rely on software either as a direct source of revenue or to increase profits in other ways. The momentum against patenting software is greatest in the open-source community. More and more politicians are engaging in the patent debate and surely will be asked to take a position one way or another on the issue of patenting software. Anyone working in technology has an opinion about whether software should be patented. Some Justices of the U.S. Supreme Court seem against patenting software. At February's oral argument in the ATT v. Microsoft case, Justices Breyer and Stevens raised the issue, which was merely collateral to the issues on review.

MR. OLSON [For Microsoft]: The '580 patent is a program, as I understand it, that's married to a computer, has to be married to a computer in order to be patented.
JUSTICE SCALIA: You can't patent, you know, on-off, on-off code in the abstract, can you?
MR. OLSON: That's correct, Justice Scalia.
JUSTICE SCALIA: There needs to be a device.
MR. OLSON: An idea or a principle, two plus two equals four can't be patented. It has to be put together with a machine and made into a usable device.

...

JUSTICE BREYER: I take it that we are operating under the assumption that software is patentable? We have never held that in this Court, have we?
MR. JOSEFFER: No, but . . . that's not relevant here . . .

...

JUSTICE STEVENS: Your time is up, but I want to ask you one yes or no question. In your view is software patentable?
MR. JOSEFFER: Standing alone in and of itself, no.

. . .

MR. WAXMAN [For AT&T]: The code is not patentable.

It appears to be only a matter of time before the Court enters the fray surrounding software patents. Last year, the Court granted certiorari in LabCorp v. Metabolite, a medical method case that many (myself included) saw as potentially damaging to the patentability of software. The petition in LabCorp was dismissed in response to numerous amicus briefs, including one I helped write on behalf of the Federal Circuit Bar Association. In short, many patent lawyers, legal scholars, and businesses thought LabCorp was an inappropriate case for Supreme Court jurisdiction. The Court should not have taken the case in the first place, so it was properly dismissed. The dismissal of the petition in LabCorp only swelled fear and anxiety among those who own or pursue patent protection for software. They know all to well what could happen if the Court decides to change the way patent law has viewed software over the last 25 years.

In a word, restriction to the scope of patentable subject matter in a way that would exclude software inventions as they are now and have been claimed for the last 25 years (in method steps, or tied to "systems" "articles of manufacture," such as "a computer readable medium") would be devastating. Devastating not just in terms of the financial loss that would be suffered by those who own patented software, but also devastating to the economy which (despite statements to the contrary) depends on a strong patent system to provide incentives for innovation and adequate disclosure of otherwise secret inventions.

The arguments for restricting the scope of patentable subject matter (to exclude software)simply do not hold water. First, it should be recognized that only Congress (not the Courts) have Constitutional authority to define the scope of patentable subject matter. They did so in 1952 by enacting (among other provisions) 35 USC Section 101, which states in relevant part that one who "invents or discovers any new and useful process, machine, manufacture, or composition of matter . . . may obtain a patent, subject to the conditions and requirements of this title." I emphasize the last part of the statute because this is the language most commonly overlooked by those who argue against software as a class of invention subject to protection by patent law. It is not enough for the invention to be "new and useful," it must also be nonobvious and adequately disclosed. What makes some software patentable is not the mere fact that it exists in a "machine" "method" or "article of manufacture," but because (in some cases) it is sufficiently nonobvious and adequately described and disclosed in a patent to merit protection. I will readily admit that many software patents do not meet the tests for obviousness and disclosure. The patent office also is responding to this problem and has initiated a number of pilot projects aimed at improving the quality of examination. Anyone who currently prosecutes software patents can confirm that the allowance rate these days is very very low. I think it is somewhere under 10%.

In short, the way to get rid of bad software patents is not to scrap all of them, but to be more selective and to endeavor to increase the quality of examination. Getting rid of software patents all together would have many deleterious effects on the economy including encouraging parties to seek protection under trade secret law and deprive the public with important knowledge concerning advances in software. Also, there is no easy way to interpret 35 USC Section 101 (without a Congressional amendment) in a way that would not spill over into other technologies, and therefore harm (or eliminate all together) the important incentives for innovation in existing or emerging technologies. In order to function, the incentives created by the patent system must be broadly available to all sectors of technology, lest they exclude some unforeseen or emerging advancement in science or engineering.