The benefits of patents

Richard Stallman doesn't like the proposed EU directive which would legalize software patents in the European Union. That's not surprising, because the software libre movement he founded and the software license, the GPL, he wrote aim to remove all entanglements from the software development process, whether based on a secret (proprietary source code) or on patented algorithms.

I've written about software patents at least twice in the past (here and here), and in both cases came out strongly against them. Software patents can be a big stumbling block in the software development process, as there are many ways to accidentally stumble across them. For small companies, that can be a hindrance, and for large companies, an expensive proposition.

On the other hand, as I've also noted, there are real, substantive advantages to patents, including of the software sort. Though I've argued that the costs of software patents (slower idea churn, a barrier to small companies, etc.) outweigh the benefits which follow, that doesn't make them any less beneficial.

Benefit #1: Boost to small business: Software patents can be the bedrock upon which small companies are founded. Starting a company is hard. Small companies have difficulties getting noticed by customers, but that's often a function of money, and money is hard to come by unless you have something with which to convince investors that your market won't be immediately entered by hundreds of new entrants. They want to know that those millions they give you aren't going into a very deep well.

Patents are a great way to do that, as patents give you a time-limited monopoly on an idea. Herman Hollerith acquired an early "business process" patent relating to the encoding of data as a series of punched holes which served as the foundation for his new company, "Tabulating Machine Company" (1896) that was the predecessor to IBM. Similarly, RSA Security got its start on now-expired patents on the algorithms used in public key cryptography. (You couldn't use SSL without it.)

These companies acquired the traction they needed to build their business from patents. That matters, at least if you think corporations matter.

Benefit #2: R&D: Spending large amounts of money on a new technology can be risky if that technology is expensive to develop but easy to copy. That's the argument used in the medical drug industry. Why spend large amounts of money making a drug if the design can be determined in five minutes using spectrum analysis and copied by every mom-and-pop pill manufacturer in the world by the end of the week?

Patents create a safe zone within which to make such investments, thus boosting R&D laws in much the same way that corporate bankruptcy laws create a safe zone for entrepreneurship.

Benefit #3: Knowledge Dissemination. RSA Security had the incentive to popularize the use of public key encryption algorithms because they were the ones who generated all the revenue as a result of that use. Patents also have high disclosure requirements, meaning that every aspect of the innovation must be detailed so that others can use it.  Though I question how strong an advantage this is in practice, it is useful to consider alongside the other two benefits.

These are all benefits that make sense if you believe corporations are important to the software development process. I think it's safe to say, though, that Stallman is no fan of corporations. Stallman including the interests of corporations in any debate on open source would be like Grover from Sesame Street expounding on Nietszche.

Stallman has shaped this debate in religious terms and turned it into a battle of absolutes, which makes it very hard for him to pose an adequate response to the benefits previously enumerated. If companies aren't important, then the "costs" of denying access to software patents are minimal. 

That might work for the party faithful, but it doesn't for the EU Commission, and that's why they are about to pass a directive legalizing software patents.