iMatix Corporation

Patent Discrimination in Software

In general, the patent system has always been administered by patent attorneys for the benefit of those attorneys’ clients. Any system that allows those who stand to gain to set the rules would be detrimental to the general welfare. However, in the software industry, patents also explicitly discriminate against the small, adaptable, and cooperative teams who created the Internet.

The patent system unfairly disadvantages genuine innovators by granting patents far too frequently and without sufficient rationale. There has never been a single economic study that shown how the software industry benefited from patents. Studies today indicate the reverse.

The increase of software patents has only occurred for dogmatic reasons. The patent system discriminates against quick-moving, flexible industries like software and favours slow-moving ones like pharmaceutics by enforcing a “one size fits all” policy. In a market where whole product life cycles are measured in a few years, exclusive privileges for twenty years are absurd.

In a market where competition is the lifeblood, the granting of overly wide monopolies on ideas keeps out innovation and competition. Patents are not used to make money by stifling the US software market. It unfairly favours people in nations with more reasonable patent laws over US software creators.

Smaller software companies are severely penalised by the patent system because they cannot afford the expense and, more importantly, the risks of obtaining patents. A recent study by a patent advocate revealed that very few small software companies get software patents, with 80% of VC-funded software startups failing to do so within four years of funding. And the majority of businesses, which do not receive VC funding…? Even the purchase of one patent by 5% of tiny software companies would be unexpected.

Finally, by restricting transparency and the free exchange of ideas and knowledge, the exclusive advantage that software patents grant their owners discriminates against open research. Ironically, patents are occasionally promoted as “rewarding disclosure” even though they really actively prohibit it. Anyone other than a patent expert cannot understand software patents, and the drive to obtain patents makes engineers much less likely to share their ideas with others.