The central idea of the patent system is to encourage people to invest in the research necessary in order to create new, better processes. I don’t know a whole lot about patents outside of software, but it makes sense that if a company has t

o spend millions of dollars creating a new process, then the security of a 20 year patent would make a company feel a lot better about shelling out on a risky research project. For the past couple decades, patents are also applied to software. Software processes rarely take millions of dollars to create, and much of the innovation that happens in software is created small groups or even a single person working for some time, usually with no thoughts of patents in their mind at all. The Linux kernel was a huge innovation started by a college kid in his spare time, and now is a major source of economic activity. Bittorrent was

invented by Bram Cohen while he was unemployed and couchsurfing, and now is something like 25% of internet traffic, give or take. Both Linux and Bittorrent not only forgoe patents, but even copyright, in effect, since they are both Free Software. The insanity of software patents is massively compounded by the fact that the USPTO issues patents on really trivial software features. For example, take this patent awarded to IBM (from Patently Absurd):

“To turn a thin line on a computer screen into a broad line, you go up and down an equal distance from the ends of the thin line and then connect the four points. You probably learned this technique for turning a line into a rectangle in seventh-grade geometry, and, doubtless, you believe it was devised by Euclid or some such 3,000-year-old thinker. Not according to the examiners of the USPTO, who awarded IBM a patent on the process.”

This is all very relevant now because of the wars over software patents related to mobile phones. Apple has been on the war path recently, doing things like trying to prevent non-Apple software from having things like “multi-touch gestures” (which didn’t even invent, they just bought a startup that create one set of ideas on that topic). Apple wants to prevent HTC from selling Android phones in the US altogether, they don’t even seem willing to license the patents to HTC, they just want to block them from the market. Microsoft is making fives times more money by suing companies shipping Android devices that they do selling their Windows Mobile software. A lot of the big software companies do this, this is not anything new. Then there are the software patent troll shell companies that exist purely to sue based on their patent portfolio. And the sad fact of the whole thing is that the big companies are really only using software patents to either defend against software patent lawsuits or bully other companies into paying them. Small companies doing innovative work are forced to patent their software so that they can survive patent

lawsuits from big companies. But often a small companies patent portfolio is just too small to matter, like in this classic story of when IBM shook down Sun for money in the 80s.

The whole thing is becoming farcical, with companies like Google patenting lots of software even though Google has expressly and repeatedly come out against software patents altogether. They need them to survive the patent lawsuits with less damage.

And it is worst in the US, since the US allows far more software patents than anywhere else. Places like the European Union and New Zealand pulling back on software patents and many countries in the world never allowed software patents in the first place.

I like the Forbes guy’s way of putting it: “software patents are becoming a tax on innovation”.