Eliminate Software Patents

David A. Wheeler

2008-12-01 (revised 2011-08-02)

Historically, the U.S. court system understood that software could not be patented. Unfortunately, lower courts have radically re-interpreted the laws (through decisions such as State Street), in ways that have greatly harmed software developers and software users.

We need to abolish software patents, because there is a vast amount of evidence that software patents harm software developers and software users (see below). Nearly everyone uses software, so software patents have been harmful to everyone. For example, since any significantly-sized software must use millions of "inventions", software patents create a "patent thicket" where no one can legally develop software. The purpose of patents is to encourage and share innovation, but there's no evidence that patents are needed to encourage software innovation, and they are useless for sharing innovation. Indeed, patents actively prevent innovation in software.

As an Ars Technica article explains, "The patent system has traditionally excluded coverage of innate scientific truths and mathematical expressions. There is no basis in law for assuming that software methods are patentable, but some dubious legal rulings issued by the Federal Circuit after its inception in the 1980s have created legal precedents for software patentability... End Software Patents (ESP)'s executive director, tech policy expert Ben Klemens, [stated that] 'Software patents endanger both software developers and businesses, ironically stifling the very innovation that the U.S. patent system was intended to foster.'"

When the U.S. Federal Trade Commission (FTC) examined software patents, they found that "Many panelists and participants expressed the view that software and Internet patents are impeding innovation. They stated that such patents are impairing follow-on incentives, increasing entry barriers, creating uncertainty that harms incentives to invest in innovation, and producing patent thickets." [Full FTC text] Software development proceeded quite well when patents weren't permitted, so there's absolutely no evidence that government-enforced monopolies are necessary. Indeed, Bessen and Maskin demonstrated that as U.S. software patentability went up, software innovation went down (in contrast with the rest of industry). Typical webstores would become illegal if already-granted software patents are upheld, so the problem is real - not theoretical. U.S. Supreme Court Justice Breyer has pointedly said "I take it that we are operating on an assumption that software is patentable? We have never held that in this Court, have we?" — and later a government lawyer agreed that software by itself is not (Microsoft v. AT&T, 2007).

This is a long, hard fight between software innovators and patent lawyers. Software innovators are interested in innovating, but the patent system actively prevents this in software. In contrast, most patent lawyers make money by patenting, and thus are interested in expanding the use of patents, even when it's bad for the industry and bad for the country. Patent lawyers claim that patents encourage innovation, but this has never been proved; all evidence is that it does not help innovation, and a lot of evidence points to direct damage.

Articles on why software patents should be abolished

You don't need to take my word for it; many people have explained some of the many problems that software patents create, demonstrating that software patents create more problems than they solve. Here are a few URLs that explain why software patents are a terrible idea:

Sites/Organizations dedicated to abolishing software patents

Most software developers are opposed to software patents, since software patents endanger their livelihood. So unsurprisingly, there are whole sites and organizations dedicated to ending software patents. Some of these sites/organizations are:

There's no need to have both copyright and patent law control software, especially since there's lots of evidence that patents are impeding instead of aiding software innovation.

Various petitions have been raised proposing an end to software patents. Here's a Whitehouse.gov petition to direct the patent office to cease issuing software patents.

Stopgap measures

The only real solution for software patents is to eliminate them. All stopgap measures are only that - they reduce some of the harms that software patents create, without actually solving the problem.

Still, if a hurricane is coming in, it's usually better to lose one major city instead of three. Reducing the huge volume of bad patents that are absurd or prior art, and countering patent trolls who extort actual innovators without producing anything of value themselves, could help. They are completely inadequate to the task, so please don't think that these tweaks will be enough to make software patents acceptable.

There are some stopgap measures that exist today, and some stopgaps that could be adopted by countries unable to completely repair the laws or court precedences.

Stopgap measures: Existing Organizations

There are several organizations that try to reduce the damage of software patents, typically via software patent pools or by overturning a patent.

Software patent pools reduce the harm caused by software patents by buying and pooling patents so that everyone can use them, as long as they meet certain conditions (such as not suing the other pool users). As long as our silly system exists, I'm glad they exist too. Of course, their very existence indicts software patents - why must organizations be set up to counter government-created monopolies? Why not just eliminate the monopolies in the first place?

The Open Innovation Network (OIN) is primarily known for its software patent pool. More generally, Allied Security Trust is a member based patent holding company that helps protect members from patent infringement lawsuits by non-practicing entities.

Of course, patent pools cannot end the problem of patent trolls (aka "non-practicing entities"). Patent trolls make nothing of value, and solely exist to sue (or threaten to sue) the innovators who create and make actual products. This is one of the reasons patent trolls are particularly dangerous to innovation.

Another approach is to try to invalidate a patent. PubPat is an organization known for this. But this is expensive and time-consuming to do for each patent. It'd be better to eliminate entire classes of patents that cause problems for society; I believe all software patents and all business method patents are part of those classes.

Stopgap measures: Existing law/rules

As noted in Prosecution Laches May Bar Enforcement of Patent (May 20, 2002), the Federal Circuit ruled in "Symbol Technologies Inc. v. Lemelson Medical, Education & Research Foundation Limited Partnership" that the equitable doctrine of laches may permanently bar enforcement of patents that issued after a long delay in prosecuting the patents even though the applicant complied with all pertinent statutes and rules. "Laches is an equitable defense that arises from a delay in taking action. Laches defenses have been successful in cases in which a patent owner knows about an infringement and then delays many years before bringing suit. Laches typically bars the recovery of any past damages but allows for the recovery of damages arising after the filing of the lawsuit. A related doctrine is equitable estoppel, which arises from misleading conduct by the patent owner that leads the defendant reasonably to infer that the patent owner does not intend to enforce its patent against the defendant. A finding of equitable estoppel may preclude any recovery."

The U.S. Patent and Trademark Office (PTO) Board of Patent Appeals and Interferences (BPAI)'s precedential decision Appeal 2008-4366 decided in 2009 creates a precedent that can remove a tiny number of the most egregious offenders. In this case, someone tried to patent something that was, by anyone's definition, a mathematical algorithm and thus not patentable. It re-emphasizes the machine-and-transformation test per Bilski. It doesn't go far enough, but it's a start.

In theory, patents aren't supposed to be granted if they existed previously, or aren't novel. At the very least, existing practice + using the Internet should not be patentable; the idea of using the Internet is obvious. But this is theory; in practice, the USPTO routinely stifles innovation by granting patents on the previously-known and obvious.

The "written description" requirement, can (sometimes) invalidate some of the worst software patents. That's because many software patents simply describe abstract goals, instead of specific and novel methods for achieving them. Howard Levine discusses this (see video and text).

Of course, in some cases, companies can afford to go through the litigation to get software patents invalidated. Red Hat and Novell won a victory in 2010 against the patent trolls IP Innovation, L.L.C. (a subsidiary of Acacia Technologies) and Technology Licensing Corporation. In this case, people doing the innovation managed to win against the patent trolls (er, non-practicing entities), invalidating several patents, and thus managed to get their innovations out to people. But this costs millions of dollars per case.

"App developers withdraw from US as patent fears reach 'tipping point'" reports that "Growth in US software patent lawsuits means independent developers are turning away from it as a place to do business - as Indian software company sends warning to tech giants".

The Bilski ruling is being applied, and in some cases seems to be doing good. Robert Greene Sterne and Michelle K. Holoubek's "The Practical Side of §101 : One year post-Bilski: How the decision is being interpreted by the BPAI, District Courts, and Federal Circuit" as described in Bilski's growing up, and smacking down some bad software patents is striking down some especially egregious applications for software patents. But Bilski did not make a clear, simple statement that software was not patentable; as Mark Webbink notes, Bilski has simply "trimmed around the edges, but clever patent attorneys will still work around it".

Signals, including gestures, are not supposed to patented. U.S. law (Section 101 of Title 35 U.S.C.) defines what is patentable subject matter: "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." Gestures are not processes, machines, manufactures, or compositions of matter, so they are NEVER supposed to be patented. Gestures are basically signals, and signals are specifically NOT patentable. The Federal Circuit has ruled that signals are not statutory subject matter, because articles of manufacture (the only plausible category) do not include intangible, incorporeal, transitory entities (in In re Nuitjen, 500 F.3d 1346 (Fed. Cir. 2007)).

Amusingly, lawyers are starting to receive a taste of their own bad medicine. Absurd rulings such as State Street have opened patentability to nearly everything... including legal methods. Suddenly lawyers are finding that they can't give advice without checking on whether or not legal ideas are patented, and now that they're receiving a taste of their own medicine, they are finding it unpleasant. The article "The patent office meets the poison pill: Why legal methods cannot be patented" by Andrew A. Schwartz* (Harvard Journal of Law & Technology, Volume 20, Number 2 Spring 2007) gives an argument as to why legal methods should not be patented. In particular, it claims that "invention" should (still) be considered as "anything made by man that utilizes or harnesses a law of nature for human benefit", and that thus legal methods shouldn't be considered inventions. That paper tries to claim that it's a narrow notion that would allow many business patents, but it seems to me that the same arguments apply to business methods and software patents. I think most people would agree that mathematics and financial transactions are not "laws of nature" - and that would exclude many software patents.

"The Spoilsmen: How Congress Corrupted Patent Reform" by Zach Carter (Huffington Post, 2011-08-04) shows why Congress has been unable to fix the patent system in a way that benefits the public. It quotes Christopher Sprigman (an expert at the University of Virginia Law School), saying, "Congress has lost any capacity to piece together these private interests into a public-welfare-promoting change to the patent system".

"The Patent Pollution Problem: Its Causes, Effects and Solutions" by Daniel B. Ravicher (Executive Director, Public Patent Foundation (PUBPAT)) explains why so many bad patents are granted, stultifying innovation.

"Patent Troll Lawyers Smacked Down, Made To Pay Sanctions, For Mass Lawsuits Followed By Quick Settlement Offers" reports an interesting ruling by the CAFC in "CAFC in EON-NET LP v. FLAGSTAR BANCORP". In this case, a patent troll was threatening lawsuits, but was willing to settle for much smaller fees than a court case. The district court found that Eon-Net's case against Flagstar had "indicia of extortion" because it was part of Eon-Net's history of "filing nearly identical patent infringement complaints against a plethora of diverse defendants, where Eon-Net followed each filing with a demand for a quick settlement at a price far lower than the cost to defend the litigation". The court notes that "it's no surprise that most companies agree to settle. This is important, because we regularly hear from patent system supporters insisting that when companies settle, it's proof that the patents are valid. Yet, here, the court itself points out that's ridiculous: In this case, Flagstar expended over $600,000 in attorney fees and costs to litigate this case through claim construction... Viewed against Eon-Net's $25,000 to $75,000 settlement offer range, it becomes apparent why the vast majority of those that Eon-Net accused of infringement chose to settle early in the litigation... those low settlement offers - less than ten percent of the cost that Flagstar expended to defend suit - effectively ensured that Eon-Net's baseless infringement allegations remained unexposed, allowing Eon-Net to continue to collect additional nuisance value settlements [and] As a non-practicing entity, Eon-Net was generally immune to counterclaims for patent infringement, antitrust, or unfair competition because it did not engage in business activities that would potentially give rise to those claims." In the end, the court agreed and allowed the district court's award for Rule 11 violations and attorneys' fees.

One ruling that may help reduce some abuse is the Federal Circuit ruling on Cybersource Corporation v. Retail Decisions, Inc.. Here is the ruling. Again, this nibbles at the edges of the most absurd cases, instead of dealing with the root problem.

These can limit specific forms of abuse, but they don't really solve the problem.

Stopgap measures: Potential legislation/standards bodies rules

Here are some possible future approaches that might reduce the damage of software patents, until software patents are eliminated:

  1. Have fines proportional to the importance of the patent to the product, and do NOT normally "stop work" if a patent is infringed. At the least, "stop work" should not be an option if the suing party is not actively selling products/services using the patent. (Remember, software is typically built from millions of "inventions".)
  2. Eliminate triple damages unless the patent user was told that the specific patent specifically applied to that product. Software patents are essentially unreadable (most wouldn't be granted if they were clear) and there are too many to read, so it's absurd to hold developers to an impossible requirement. Let them innovate instead of reading nonsense patents.
  3. Eliminate the presumption in court that a granted patent is valid, at least for software and business processes. For any patent case, a court would need to determine if a granted patent is valid. The PTO's review process is absurdly poor, and the rules have changed significantly in the last few years, so this presumption is completely invalid.
  4. Courts should be required to wait for the results of any ongoing patent review before rendering a verdict. (See the Blackberry suit!)
  5. Require mandatory public review, before granting a patent.
  6. Require that IT interoperability standards be implementable patent-free. In particular, get ISO and others to move in that direction, and get standards-imposing bodies (like governments) on board. See Digistan for more.
  7. Non-practicing entities shouldn't have the right to enforce patents at all! Allowing non-practicing entities to enforce patents puts a big brake on innovation, because it can easily lead to cases where no one can build useful products.
  8. Reduce the absurd evidence requirements for patent defense, at least so that they are the normal courtroom requirements instead of extraordinary ones. U.S. Supreme Court agreed, in 2010, to review the standards for patent defense. Defendants currently have to prove patent invalidity case by "clear and convincing evidence" (an extraordinarily high standard not normally used and not specifically authorized by Congress) instead of the more usual "preponderance of evidence". This is especially absurd since patents normally get 20 hours or less of review, total. The Electronic Frontier Foundation (EFF) has more information.
  9. Software developers can try to write around patents, i.e., by implementing algorithms that avoid patent claims. Andrew Tridgell on Patent Defence discusses how to do this. This may be possible for a specific few patents if you know of key ones, and in some cases it is the wise thing to do for now, but in the grand scheme this is completely impossible. There are a vast number of software patents, there is no realistic way to search them, and many software patents are nearly impossible to decipher even if you found them (they are written for lawyers, not for practitioners, and are often very vague). Many patents describe prior art, or are obvious, or simply describe a problem to be solved instead of how to solve it. In any case, doing this distracts developers from actually solving problems. In short, this may sometimes be necessary for individual developers, but this is a big drain on innovation, and it is completely impractical to do in general.
  10. Reverse Bifurcation is a proposed procedural change. One strategy for dealing with patent trolls and software patents generally is "to decide cheaper and easier issues early in the litigation process". Dennis Crouch and Robert P. Merges' article "Operating Efficiently Post-Bilski by Ordering Patent Doctrine Decision-Making" 25 Berkeley Technology Law Journal 1673 (2010) examines some of these. An example of the strategy is "reverse bifurcation", in which the "damages phase is moved to the front of the litigation sequence with the goal of figuring out how much is really at stake. This procedural move may be particularly appropriate in the case of patent holders who sue a large number of parties, including parties with relatively small potential damages pools, in the hopes of extracting the aforementioned undeserved rents".
  11. "Software Patents and the Return of Functional Claiming" by Mark A. Lemley (Stanford Law School, July 25, 2012, Stanford Public Law Working Paper No. 2117302) argues that "If courts would faithfully apply the 1952 Act, limiting those claims to the actual algorithms the patentees disclosed and their equivalents, they could prevent overclaiming by software patentees and solve much of the patent thicket problem that besets software innovation." I think that software patents should not be granted at all, but this might help.

A few absurd patents

There are some absurd patents out there; New Way To Build A Snowman: Patented! lists some. These include:

Anti-patent?

I think that allowing patents for software and business methods was a mistake; patents were historically not allowed to cover general algorithms and business methods for a reason.

I also think patents on pre-existing genes are rediculous. God created those genes, or if you like, they are a "law of nature". Thus, no one else should be allowed to claim that they are the innovator, since they are not. United States District Court Judge Robert W. Sweet invalidated seven patents on human genes in 2010, saying that the patents were "improperly granted" because those patents involved a "law of nature.".

I'm willing to believe that patents are quite appropriate for mechanical devices or new pharmaceuticals; I'm no expert in them, and there seems to be some weak evidence that they have advantages in pharmaceuticals. But for software and business methods, patents have been a complete and utter disaster. Let's end the mistake.


See my home page at http://www.dwheeler.com.