Comment Articles

Software patents need shelter from the storm

John Carroll ZDNet.com

Published: 17 Sep 2003 16:35 BST

Such monopoly rights restrict competition for the length of the patent, which is an obvious societal cost. On the other hand, it also ensures the owner a return on research expenditures which went into the discovery of the patented idea. This makes large expenditures for easily copied product, such as pharmaceuticals, easier to justify, thus boosting research and development throughout an industry.

Such an assured source of revenue can have benefits for small to medium-sized enterprises (SMEs). Patents are valuable assets, and they can be used to secure loans and/or venture funding, as well as serve as a source of stable revenue. Nicholas P. Godici, director of the US Patent Office, mentioned Herman Hollerith's 1889 patent on a method for tabulating and compiling statistical information in testimony before an American congressional subcommittee. This patent provided a stable source of revenue for Mr Hollerith's fledgling business, which enabled it to grow into a certain company better known under its later name, International Business Machines (IBM).

Patents must be fully described as part of the patent application process. This facilitates the dissemination of the patented idea into the public domain, which becomes most useful once the patent expires. The monopoly aspect of patents also provides incentives to properly market the idea, as a patent-owning company will generate all revenue from the results of that marketing. This serves to popularize the technology so that it is universally understood by the time the patent lapses.

A final justification is what I'll call the "exemplar" theory. The United States has the most vibrant IT industry in the world, an industry that has grown to dominate IT markets around the world. America also has a liberal patent regime, and this is causally linked, according to the theory, to America's IT success. Therefore, Europe needs software patents in order to make an IT environment wherein European companies can thrive as American companies presumably do under America's patent system.