...disqualified simply because it used a computer program, all or in part, as its preferred implementation.
I agree that virtually all business-method patents, or BMPs, should not be patentable and that well over 99 percent of software-related patents are obvious and should never have been issued.
Here's a recent example. On 7 November, The Hartford insurance company announced via a press release that it had invented a faster way to deliver life insurance and has a "patent pending". That's not an invention and should not be patent pending. It's just a way of doing business.
I do believe that the US patent system is broken specifically for software-related inventions and agree with the many comments that discussed that the current policy of the PTO for software-related patent applications suppresses innovation rather than fosters innovation.
Other commenters, specifically among software programmers, do not see the need for software-related patents. But here's where I disagree with them. If you are the management of a company and specifically of a software company, you must look for ways to protect your intellectual property.
Shortcomings of copyright protection for software
Copyright protection only stops someone from literally copying your code. It in no way protects any inventive concept, including "ideas, program logic, algorithms, systems, methods, concepts, or layouts".
Trade-secret protection has been rejected by most software companies because often the source code has to be distributed; because by reverse-engineering the machine code the trade secret can be discovered; and because trade-secret law changes state by state in the US. So a patent is, for many companies, the best way to protect their intellectual property.
If you are the management of a company and specifically of a software company, you must look for ways to protect your intellectual property.
One of the greatest challenges facing the PTO today for BMPs, software or hardware patent applications, is in discovering prior art and determining if there is an invention.
The PTO is attempting to solve this problem with the Peer to Patent pilot project, which allows the public, including professionals in their respective fields, to comment on patent applications. It is still in its infancy, but it offers the potential in the future of assisting the PTO in rejecting the large number of applications that are filed each year.
The stated goal of the pilot project is to connect the PTO "to an open network of experts online". Additionally, in July 2010 the PTO set up more stringent rules for the issuance of BMPs in their Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski vs Kappos (PDF).
Also, private companies — for example, patent research firm Article One Partners — could significantly reduce the large number of patent litigation cases. Article One Partners sees its mission as helping "strengthen the quality of legitimate patents and reduce unjust patent monopolies".
Alternative approaches to business-method patent applications
In a 2006 article of mine, Patents: Where's the invention?, I recommended that the US Congress should appoint a commission. I argued that, "the commission should examine what other countries have done regarding business-method patent applications.
The European Patent Convention, for example, has ruled that anything that consists of 'schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers' is not an invention and therefore not patentable. That would not only be a good starting point, it could also be the basis for a worldwide agreement on limiting patentability to true software-related inventions".
In conclusion, while I am a strong proponent of software patents, I am very aware, and agree with, many of the arguments against patents because of patent trolls, frivolous patents such as Amazon's one-click patent, and frivolous patent litigation that can put companies out of business. And I support changes in patent law to reduce those problems.
But if one believes that the patent system has fostered innovation and helped the US grow and prosper, then there are no rational grounds for eliminating technology inventions that use software as its implementation.
Martin Goetz was a founder in 1959 and former president of Applied Data Research, a $200m company that was traded on the New York Stock Exchange before its acquisition by Ameritech in 1986. His company was the first company to sell a software product commercially and was a pioneer of the software products industry. He received the first US software patent in 1968. He testified as an expert witness for the Justice Department in the IBM suit in 1976. In 1989 he was elected to the Infomart Information Processing Hall of Fame along with Bill Gates and in February 2000 was elected to the New Jersey Inventors Hall of Fame. Currently, he is a private investor and management consultant to software product firms.
For the opposite point of view on software patents, read Software patents are legalised extortion by Mike Lee of Appsterdam.
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