Imagine There’s No Software Patents…

An article by Randall Stross in the Sunday Business Section of the New York Times today called Why Bill Gates Wants 3,000 Patents put me in mind of the classic John Lennon song, "Imagine", one verse of which reads as follows:

Imagine no possessions,
I wonder if you can,
No need for greed or hunger,
A brotherhood of man,
Imagine all the people
Sharing all the world...

Unlike a world with no possessions, though, a world with no software patents isn't really that hard to imagine -- especially by those of us that can remember what it was like when there were no software patents, or those that live in Europe today, where software patents are not accepted, as reaffirmed by a recent vote by the European Parliament, despite a protracted effort by the software industry to drop this restriction.

Software patents are more unpopular today than they have ever been, for two important reasons. First, just about everyone agrees that they are too easy to get, and too hard to challenge. And second, because recently they have begun to cause more and more problems in important collaborative processes. Those processes, of course, are open source software development, which has only recently captured sufficient commercial importance to attract the negative notice of some patent holders, and open standards, because of the increasing number of patents that have been awarded that can be cited against software standards.

Those of us who have been around for longer than we like to admit will remember that even after software patents became available, few pure software companies bothered to get them (hardware companies that already had strong patent cultures pursued them far sooner). Startup companies, for example, were rarely encouraged to get patents by their venture capital backers until the Internet Bubble years, when finding enough uses for the huge investment rounds that bloated VC funds wanted to cram into startups became an actual problem (remember startup company Super Bowl ads?) Prior to that era, copyright and trade secret protection were deemed to be more than adequate to protect an investor’s interests, and even a successful startup wouldn’t be able to fund a broad program of patent infringement litigation, anyway.

Of course, anyone who doesn’t already have a large patent portfolio can’t play the game as effectively. If you hear echoes of an arms race (only this time with patents), you’re on the right track. 

Today, of course, we are well past a tipping point in this regard. Even though VC investment rounds are back to more historical dimensions, IPO opportunities remain elusive. As a result, VCs must increasingly look to acquisitions by larger players to find liquidity, and they know that strategic patents can boost the value of a portfolio company on sale. And for large companies, patents are deemed to be more and more important — not always (or even primarily) for offensive purposes, but for defensive purposes. In other words, if you have enough patents, you have “freedom of movement,” because anyone who says that you are infringing one of their patents is likely to be infringing one of yours as well. 

So should software patents be swept away entirely, or should the system be reformed, by making software patents harder to get, easier to challenge, and perhaps of shorter duration as well? On a net basis, getting rid of them is probably the better result. 

But when imagining new worlds, it’s important to imagine all consequences of a change, both unintended as well as intended. In that respect, consider this: if Apple hadn’t slipped up in a license with Microsoft, Microsoft could never have launched windows with a graphical user interface that mimicked Apple’s breakthrough GUI. And if Dan Bricklin had been able to patent Visicalc, Microsoft would never have been able to launch Excel. In each case, the assertion of patent rights could (at least theoretically) have prevented the successful exercise of brute force that monopoly power can enable to the detriment of other types of creativity in the marketplace. 

So — would we be better off today if patents had been used to block each of these strategic moves by Microsoft? And might we be better off in the future with a reformed patent law, and patent owners that are willing to contribute needed rights to a “patent commons” for open source and open standards purposes (probably a more feasible objective, at least in the short term)? 

Interesting questions.