A Generation of Software Patents

Intellectual Property and Patents

Article Snapshot

Author(s)

James Bessen

Source

Boston University School of Law, Law and Economics Research Paper No. 11-31; Berkman Center Research Publication No. 2011-04, 2011

Summary

This report examines changes in the patenting behavior of the software industry since the 1990s.

Policy Relevance

It cannot be assumed that software patents have provided a net social benefit in the software industry.

Main Points

  • Since 1994, software patents have been made available to programmers in order to protect software code that is novel and contains a trivial physical step. The goal of having these patents was to incentivize continued innovation in the field of programming.
     
  • However, studies over the last twenty years have indicated that many software firms do not patent their work, and yet software patents are more likely to be the focus of litigation than any other types of patents. This indicates that allowing the existence of software patents may cause a net social cost, rather than a benefit.
     
  • Some analysts have argued that it may not be a lack of social value, but rather the complexity of putting the new patent regime into place that has caused the problems. Now that the patent administration, as well as software firms, have had time to acclimate, the literature and empirical data has been updated in order to better determine the value of software patents.
     
  • It appears that even following a sufficient acclimation period, many software companies have not increased their use of patents. This indicates that software developers do not consider patents sufficiently beneficial to overcome their costs.
     
  • Litigation over software patents has more than tripled since 1999. This huge increase in litigation rate indicates a high social cost compared to the relatively minor gain that these types of patents appear to confer.
     
  • Combined, this data indicates that software patents are not socially beneficial. Thus, incentivizing continued innovation should be left to other mechanisms and should no longer include patent protection.
     

 

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