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Software patents need shelter from the storm

John Carroll ZDNet.com

Published: 17 Sep 2003 16:35 BST

Software patents are a controversial issue, all the more so as the European Parliament considers changes that would bring European patent law closer to the more permissive regime found in the United States.

This has resulted in a flurry of criticism, so much so that the European Parliament has deferred its decisions until 4 November in order to consider objections raised by economists as well as spokespersons for the open source community.

This is a somewhat unusual debate, as patent-related issues have less to do with technical matters normally the subject of computer-oriented discussions so much as economic questions of efficiency, levels of R&D and incentives. Many would argue that since patents are useful in other technical disciplines, they will be useful in software development. I argue that the nature of software development makes it sufficiently different from other technical disciplines as to make unnecessary the economic expedient of patents.

The case for patents, in a nutshell
As a report commissioned by the European Parliament noted, "A patent is not a "natural' right, but an instrument of economic policy. As such, it must be judged on its economic merits."

Patents are an economic tool designed to remedy structural aspects of certain markets which hinder technical research. Certain markets, such as pharmaceuticals, require large R&D expenditures to discover a new medicinal compound. Medicinal compounds, however, are hard (and expensive) to discover but easy to copy, which can deprive a research company of any return on the billions it spends on research.

Patents grant their owner a limited monopoly on the "idea" identified by the patent. This ownership is limited to 20 years, a length which is enshrined in the TRIPs agreement to which all members of the World Trade Organization (WTO) are signatories. Such monopoly power gives the owner the right to license at prices he or she sees fit, or conversely, the right not to license at all.