Software patent
Encyclopedia
Software patent does not have a universally accepted definition. One definition suggested by the Foundation for a Free Information Infrastructure
Foundation for a Free Information Infrastructure
The Foundation for a Free Information Infrastructure or FFII is a non-profit organisation based in Munich, Germany, dedicated to establishing a free market in information technology, by the removal of barriers to competition...

 is that a software patent is a "patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....

 on any performance of a computer realised by means of a computer program".In 2005, the European Patent Office
European Patent Office
The European Patent Office is one of the two organs of the European Patent Organisation , the other being the Administrative Council. The EPO acts as executive body for the Organisation while the Administrative Council acts as its supervisory body as well as, to a limited extent, its legislative...

 suggested that a software patent is a patent for a computer program claimed as such, or an algorithm or computer-implemented business method that make no technical contribution.European Patent Office continues to advocate harmonisation in the field of CII patents The FFII
Foundation for a Free Information Infrastructure
The Foundation for a Free Information Infrastructure or FFII is a non-profit organisation based in Munich, Germany, dedicated to establishing a free market in information technology, by the removal of barriers to competition...

 are an anti-software patent group and the material associated with their definition of a software patent suggests that the purpose of the definition is to identify patents that should not be granted as a matter of policy.


There is intense debate
Software patent debate
The software patent debate is the argument dealing with the extent to which it should be possible to patent software and computer-implemented inventions as a matter of public policy. Policy debate on software patents has been active for years. The opponents to software patents have gained more...

 over the extent to which software patents should be granted, if at all. Important issues concerning software patents include:
  • Where the boundary between patentable
    Patentable subject matter
    Patentable, statutory or patent-eligible subject matter is subject matter which is susceptible of patent protection. The laws or patent practices of many countries suggest that certain subject matter is or is not something for which a patent should be granted.Together with novelty, inventive step...

     and non-patentable software should lie;
  • Whether the inventive step and non-obviousness
    Inventive step and non-obviousness
    The inventive step and non-obviousness reflect a same general patentability requirement present in most patent laws, according to which an invention should be sufficiently inventive — i.e., non-obvious — in order to be patented....

     requirement is applied too loosely to software; and
  • Whether patents covering software discourage, rather than encourage, innovation.

Background

A patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....

 is a set of exclusionary rights granted by a state
State (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...

 to a patent holder for a limited period of time, usually 20 years. These rights are granted to patent applicants in exchange for their disclosure of the inventions. Once a patent is granted in a given country, no person may make, use, sell or import/export the claimed invention in that country without the permission of the patent holder. Permission, where granted, is typically in the form of a license
License
The verb license or grant licence means to give permission. The noun license or licence refers to that permission as well as to the document recording that permission.A license may be granted by a party to another party as an element of an agreement...

 which conditions are set by the patent owner: it may be gratis or in return for a royalty payment or lump sum fee.

Patents are territorial in nature. To obtain a patent, inventors must file patent application
Patent application
A patent application is a request pending at a patent office for the grant of a patent for the invention described and claimed by that application. An application consists of a description of the invention , together with official forms and correspondence relating to the application...

s in each and every country in which they want a patent. For example, separate applications must be filed in Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

, China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

, the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 and India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

 if the applicant wishes to obtain patents in those countries. However, some regional offices exist, such as the European Patent Office
European Patent Office
The European Patent Office is one of the two organs of the European Patent Organisation , the other being the Administrative Council. The EPO acts as executive body for the Organisation while the Administrative Council acts as its supervisory body as well as, to a limited extent, its legislative...

 (EPO), which act as supranational bodies with the power to grant patents which can then be brought into effect in the member states, and an international procedure also exists for filing a single international application under the Patent Cooperation Treaty
Patent Cooperation Treaty
The Patent Cooperation Treaty is an international patent law treaty, concluded in 1970. It provides a unified procedure for filing patent applications to protect inventions in each of its contracting states...

 (PCT), which can then give rise to patent protection in most countries.

These different countries and regional offices have different standards for granting patents. This is particularly true of software or computer-implemented inventions, especially where the software is implementing a business method.

Early example of a software patent

On 21 May 1962, a British patent application entitled "A Computer Arranged for the Automatic Solution of Linear Programming
Linear programming
Linear programming is a mathematical method for determining a way to achieve the best outcome in a given mathematical model for some list of requirements represented as linear relationships...

 Problems
" was filed. The invention was concerned with efficient memory management
Out-of-core algorithm
Out-of-core or External memory algorithms are algorithms that are designed to process data that is too large to fit into a computer's main memory at one time...

 for the simplex algorithm
Simplex algorithm
In mathematical optimization, Dantzig's simplex algorithm is a popular algorithm for linear programming. The journal Computing in Science and Engineering listed it as one of the top 10 algorithms of the twentieth century....

, and could be implemented by purely software means. The patent was granted on August 17, 1966 and seems to be one of the first software patents.

United States


The United States Patent and Trademark Office
United States Patent and Trademark Office
The United States Patent and Trademark Office is an agency in the United States Department of Commerce that issues patents to inventors and businesses for their inventions, and trademark registration for product and intellectual property identification.The USPTO is based in Alexandria, Virginia,...

 has granted patents that may be referred to as software patents since at least the early 1970s. In Gottschalk v. Benson
Gottschalk v. Benson
Gottschalk v. Benson, was a United States Supreme Court case in which the Court ruled that a process claim directed to a numerical algorithm, as such, was not patentable because "the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm...

 (1972), the United States Supreme Court ruled that a patent for a process should not be allowed if it would "wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself", adding that "it is said that the decision precludes a patent for any program servicing a computer. We do not so hold." In 1981, the Supreme Court stated that "a claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program, or digital computer" and a claim
Claim (patent)
Patent claims are the part of a patent or patent application that defines the scope of protection granted by the patent. The claims define, in technical terms, the extent of the protection conferred by a patent, or the protection sought in a patent application...

 is patentable if it contains "a mathematical formula [and] implements or applies the formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect".

Due to different treatment of federal patent rights in different parts of the country, in 1982 the U.S. Congress created a new court (the Federal Circuit
United States Court of Appeals for the Federal Circuit
-Vacancies and pending nominations:-List of former judges:-Chief judges:Notwithstanding the foregoing, when the court was initially created, Congress had to resolve which chief judge of the predecessor courts would become the first chief judge...

) to hear patent cases. Following several landmark decisions by this court, by the early 1990s the patentability of software was well established, and in 1996 the USPTO issued Final Computer Related Examination Guidelines stating that "A practical application of a computer-related invention is statutory subject matter. This requirement can be discerned from the variously phrased prohibitions against the patenting of abstract ideas, laws of nature or natural phenomena" (emphasis added).

The recent expansion of the Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...

 and e-commerce has led to many patents being applied for and being granted for business methods implemented in software and the question of whether business methods
Business method patent
Business method patents are a class of patents which disclose and claim new methods of doing business. This includes new types of e-commerce, insurance, banking, tax compliance etc. Business method patents are a relatively new species of patent and there have been several reviews investigating the...

 are statutory subject matter is a separate issue from the question of whether software is. There have been several successful enforcement trials in the USA, some of which are listed in the list of software patents article.

Europe

Within European Union member states, the EPO and other national patent offices have issued many patents for inventions involving software since the European Patent Convention
European Patent Convention
The Convention on the Grant of European Patents of 5 October 1973, commonly known as the European Patent Convention , is a multilateral treaty instituting the European Patent Organisation and providing an autonomous legal system according to which European patents are granted...

 (EPC) came into force in the late 1970s. excludes "programs for computers" from patentability (Art. 52(2)) to the extent that a patent application relates to a computer program "as such" (Art. 52(3)). This has been interpreted to mean that any invention which makes a non-obvious "technical contribution" or solves a "technical problem" in a non-obvious way is patentable even if that technical problem is solved by running a computer program.

Computer-implemented inventions which only solve a business problem using a computer, rather than a technical problem, are considered unpatentable as lacking an inventive step (see T 258/03
T 258/03
T 258/03, also known as Auction Method/Hitachi, is a decision of a Technical Board of Appeal of the European Patent Office , issued on April 21, 2004. It is a landmark decision for interpreting Article 52 and of the European Patent Convention which built on the principles suggested by the same...

). Nevertheless, the fact that an invention is useful in business does not mean it is not patentable if it also solves a technical problem.

A summary of the developments concerning patentability of computer programs under the European Patent Convention is given in (see G 3/08
G 3/08
Under case number G 3/08, the Enlarged Board of Appeal of the EPO issued on May 12, 2010 an opinion in response to questions referred to it by the President of the European Patent Office , Alison Brimelow, on October 22, 2008...

) as a response of the Enlarged Board of Appeal to questions filed by the President of the European Patent Office according to Art. 112(1)b) EPC.

United Kingdom

United Kingdom patent law is interpreted to have the same effect as the European Patent Convention
European Patent Convention
The Convention on the Grant of European Patents of 5 October 1973, commonly known as the European Patent Convention , is a multilateral treaty instituting the European Patent Organisation and providing an autonomous legal system according to which European patents are granted...

 such that "programs for computers" are excluded from patentability to the extent that a patent application relates to a computer program "as such". Current case law in the UK states that an (alleged) invention will only be actually regarded as an invention if it provides a contribution that is not excluded and which is also technical. A computer program implementing a business process is therefore not an invention, but a computer program implementing an industrial process may well be.

Japan

Software-related inventions are patentable. To qualify as an invention, however, there must be "a creation of technical ideas utilizing a law of nature" although this requirement is typically met by "concretely realising the information processing performed by the software by using hardware resources". Software-related inventions may be considered obvious if they involve: the application of an operation known in other fields; the addition of a commonly known means or replacement by equivalent; the implementation in software of functions which were previously performed by hardware; or the systematisation of known human transactions.

Other countries

In India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

, a clause to include software patents was quashed by the Indian Parliament in April 2005.

In Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...

, pure or abstract methods of doing business are not considered to be patentable, but if the method is implemented using a computer, it avoids the exclusion for business methods.

In New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...

 computer programs are to be excluded from patentability under a 2010 Patents Bill, but guidelines permitting embedded software are to be drafted once the bill has passed.

In the Philippines, "schemes, rules and methods of performing mental acts, playing games or doing business, and programs for computers" are non-patentable inventions under Sec. 22.2 of Republic Act No. 8293, otherwise known as the "Intellectual Property Code of the Philippines."

In South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...

, software is considered patentable and many patents directed towards "computer programs" have been issued. In 2006, Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...

's sales of its "Office" suite were jeopardized due to a possible patent infringement. A ruling by the Supreme Court of Korea found that patents directed towards automatic language translation within software programs were valid and possibly violated by its software.

In South Africa, "a program for a computer" is excluded from recognition as a patentable invention by section 25 of the Patents Act.

Patentable subject matter

Patents are intended to promote innovation by encouraging the timely disclosure of how to make and use inventions and by protecting investments made to commercialize inventions. They attempt to accomplish this by requiring that a prompt and full disclosure is made by an inventor of how to make and use the invention and by granting a monopoly right for a limited period of time to a patent owner to prevent others from making, using or selling the invention in exchange for said prompt and full disclosure.

There is debate
Software patent debate
The software patent debate is the argument dealing with the extent to which it should be possible to patent software and computer-implemented inventions as a matter of public policy. Policy debate on software patents has been active for years. The opponents to software patents have gained more...

 as to whether or not these aims are achieved with software patents.

Proposals

In seeking to find a balance, different countries have different policies as to where the boundary between patentable and non-patentable software should lie. In Europe, a number of different proposals for setting a boundary line were put forward during the debate concerning the proposed Directive on the patentability of computer-implemented inventions
Directive on the patentability of computer-implemented inventions
The Proposal for a Directive of the European Parliament and of the Council on the patentability of computer-implemented inventions , procedure number 2002/0047 was a proposal for a European Union directive aimed to harmonise national patent laws and practices concerning the granting of patents...

, none of which were found acceptable by the various parties to the debate. Two particular suggestions for a hurdle that software must pass to be patentable include:
  • A computer program that utilises "controllable forces of nature to achieve predictable results".
  • A computer program which provides a "technical effect".


In the US, Ben Klemens
Ben Klemens
Ben Klemens is an Australian-American economist and author. He works in the statistical research division of the United States Census and was previously a nonresident fellow at the Brookings Institution's Center on Social and Economic Dynamics...

, a Guest Scholar at the Brookings Institution
Brookings Institution
The Brookings Institution is a nonprofit public policy organization based in Washington, D.C., in the United States. One of Washington's oldest think tanks, Brookings conducts research and education in the social sciences, primarily in economics, metropolitan policy, governance, foreign policy, and...

, proposed that patents should be granted only to inventions that include a physical component that is by itself nonobvious. This is based on Justice William Rehnquist
William Rehnquist
William Hubbs Rehnquist was an American lawyer, jurist, and political figure who served as an Associate Justice on the Supreme Court of the United States and later as the 16th Chief Justice of the United States...

's ruling in the U.S. Supreme Court case of Diamond v. Diehr
Diamond v. Diehr
Diamond v. Diehr, , was a 1981 U.S. Supreme Court decision which held that the execution of a physical process, controlled by running a computer program was patentable...

 that stated that "... insignificant postsolution activity will not transform an unpatentable principle into a patentable process." By this rule, one would consider software loaded onto a stock PC to be an abstract algorithm with obvious postsolution activity, while a new circuit design implementing the logic would likely be a nonobvious physical device. Upholding an "insignificant postsolution activity" rule as per Justice Rehnquist's ruling would also eliminate most business method patent
Business method patent
Business method patents are a class of patents which disclose and claim new methods of doing business. This includes new types of e-commerce, insurance, banking, tax compliance etc. Business method patents are a relatively new species of patent and there have been several reviews investigating the...

s.

Obviousness

A common objection to software patents is that they relate to trivial inventions. A patent on an invention that many people would easily develop independently of one another should not, it is argued, be granted since this impedes development. Different countries have different ways of dealing with the question of inventive step and non-obviousness
Inventive step and non-obviousness
The inventive step and non-obviousness reflect a same general patentability requirement present in most patent laws, according to which an invention should be sufficiently inventive — i.e., non-obvious — in order to be patented....

 in relation to software patents.

Inventive step test in Europe

See Inventive step requirement in Europe and, for instance, T 258/03
T 258/03
T 258/03, also known as Auction Method/Hitachi, is a decision of a Technical Board of Appeal of the European Patent Office , issued on April 21, 2004. It is a landmark decision for interpreting Article 52 and of the European Patent Convention which built on the principles suggested by the same...

.

Compatibility

There are a number of high profile examples where the patenting of a data exchange standards forced another programming group to introduce an alternative format. For instance, the PNG format was largely introduced to avoid the GIF patent problems, and Ogg
Ogg
Ogg is a free, open container format maintained by the Xiph.Org Foundation. The creators of the Ogg format state that it is unrestricted by software patents and is designed to provide for efficient streaming and manipulation of high quality digital multimedia.The Ogg container format can multiplex...

 Vorbis
Vorbis
Vorbis is a free software / open source project headed by the Xiph.Org Foundation . The project produces an audio format specification and software implementation for lossy audio compression...

 to avoid MP3
MP3
MPEG-1 or MPEG-2 Audio Layer III, more commonly referred to as MP3, is a patented digital audio encoding format using a form of lossy data compression...

. If it is discovered that these new suggested formats are themselves covered by existing patents, the final result may be a large number of incompatible formats. Creating such formats and supporting them costs money, creates inconvenience to users and even threatens to split the Internet into several partially incompatible sub-networks (ASF
Advanced Systems Format
Advanced Systems Format is Microsoft's proprietary digital audio/digital video container format, especially meant for streaming media...

 and non-ASF, for example).

Computer-implemented invention (CII)

Under the EPC, and in particular its Article 52, "programs for computers" are not regarded as inventions for the purpose of granting European patents, but this exclusion from patentability only applies to the extent to which a European patent application or European patent relates to a computer program as such. As a result of this partial exclusion, and despite the fact that the EPO subjects patent applications in this field to a much stricter scrutiny when compared to their American counterpart, that does not mean that all invention
Invention
An invention is a novel composition, device, or process. An invention may be derived from a pre-existing model or idea, or it could be independently conceived, in which case it may be a radical breakthrough. In addition, there is cultural invention, which is an innovative set of useful social...

s including some software are de jure
De jure
De jure is an expression that means "concerning law", as contrasted with de facto, which means "concerning fact".De jure = 'Legally', De facto = 'In fact'....

not patentable
Patentability
Within the context of a national or multilateral body of law, an invention is patentable if it meets the relevant legal conditions to be granted a patent...

.

Overlap with copyright

Protection by patent protection and copyright constitute two different means of legal protection which may cover the same subject-matter, such as computer programs, since each of these two means of protection serves its own purpose. Software is protected as works of literature under the Berne Convention
Berne Convention for the Protection of Literary and Artistic Works
The Berne Convention for the Protection of Literary and Artistic Works, usually known as the Berne Convention, is an international agreement governing copyright, which was first accepted in Berne, Switzerland in 1886.- Content :...

. This allows the creator to prevent another entity from copying the program and there is generally no need to register code in order for it to be copyrighted.

Patents, on the other hand, give their owners the right to prevent others from using a claimed invention, even if it was independently developed and there was no copying involved. In fact, one of the most recent EPO decisions T 424/03 clarifies the distinction, stating that software is patentable, because it is basically only a technical method executed on a computer, which is to be distinguished from the program itself for executing the method, the program being merely an expression of the method, and thus being copyrighted.

Patents cover the underlying methodologies embodied in a given piece of software, or the function that the software is intended to serve, independent of the particular language or code that the software is written in. Copyright prevents the direct copying of some or all of a particular version of a given piece of software, but do not prevent other authors from writing their own embodiments of the underlying methodologies. Copyright can also be used to prevent a given set of data from being copied while still allowing the author to keep the contents of said set of data a trade secret
Trade secret
A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers...

.

Whether and how the numerus clausus principle shall apply to the legal hybrid software to provide a judicious balance between property rights of the title holders and freedom rights of computing professionals and the society as a whole, is in dispute.

Free and open source software

There is animosity and disgust
Software patent debate
The software patent debate is the argument dealing with the extent to which it should be possible to patent software and computer-implemented inventions as a matter of public policy. Policy debate on software patents has been active for years. The opponents to software patents have gained more...

 in the free software community
Free software community
The free-software community is an informal term that refers to the users and developers of free software as well as supporters of the free-software movement. The movement is sometimes referred to as the open-source software community or a subset thereof...

 towards software patents. Much of this has been caused by free software
Free software
Free software, software libre or libre software is software that can be used, studied, and modified without restriction, and which can be copied and redistributed in modified or unmodified form either without restriction, or with restrictions that only ensure that further recipients can also do...

 or open source
Open source
The term open source describes practices in production and development that promote access to the end product's source materials. Some consider open source a philosophy, others consider it a pragmatic methodology...

 projects terminating when the owners of patents covering aspects of a project demanded license fees that the project could not pay, or was not willing to pay, or offered licenses with terms that the project was unwilling to accept, or could not accept, because it conflicted with the free software license in use.

Several patent holders have offered royalty-free patent licenses. Companies that have done this include Apple Inc, IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...

, Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...

, Nokia
Nokia
Nokia Corporation is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki...

, Novell
Novell
Novell, Inc. is a multinational software and services company. It is a wholly owned subsidiary of The Attachmate Group. It specializes in network operating systems, such as Novell NetWare; systems management solutions, such as Novell ZENworks; and collaboration solutions, such as Novell Groupwise...

, Red Hat
Red Hat
Red Hat, Inc. is an S&P 500 company in the free and open source software sector, and a major Linux distribution vendor. Founded in 1993, Red Hat has its corporate headquarters in Raleigh, North Carolina with satellite offices worldwide....

, Sun Microsystems
Sun Microsystems
Sun Microsystems, Inc. was a company that sold :computers, computer components, :computer software, and :information technology services. Sun was founded on February 24, 1982...

 and Unisys
Unisys
Unisys Corporation , headquartered in Blue Bell, Pennsylvania, United States, and incorporated in Delaware, is a long established business whose core products now involves computing and networking.-History:...

. Such actions have rarely appeased the free
Free software community
The free-software community is an informal term that refers to the users and developers of free software as well as supporters of the free-software movement. The movement is sometimes referred to as the open-source software community or a subset thereof...

 and open source software communities for reasons such as fear of the patent holder changing their mind or problems with some of the license terms.

In 2005 Sun Microsystems
Sun Microsystems
Sun Microsystems, Inc. was a company that sold :computers, computer components, :computer software, and :information technology services. Sun was founded on February 24, 1982...

 announced that they were making a portfolio of 1,600 patents available through a patent license called Common Development and Distribution License
Common Development and Distribution License
Common Development and Distribution License is a free software license, produced by Sun Microsystems, based on the Mozilla Public License , version 1.1....

.

In 2006, Microsoft's pledge not to sue Novell Linux
Linux
Linux is a Unix-like computer operating system assembled under the model of free and open source software development and distribution. The defining component of any Linux system is the Linux kernel, an operating system kernel first released October 5, 1991 by Linus Torvalds...

 customers, openSUSE
OpenSUSE
openSUSE is a general purpose operating system built on top of the Linux kernel, developed by the community-supported openSUSE Project and sponsored by SUSE...

 contributors, and free/open source software developers over patents
and the associated collaboration agreement with Novell was met with disdain from the Software Freedom Law Center
Software Freedom Law Center
The Software Freedom Law Center is an organization that provides pro bono legal representation and related services to not-for-profit developers of free software/open source software. It was launched in February 2005 with Eben Moglen as Chairman. Initial funding of US$4 million was pledged by...


while commentators from the Free Software Foundation stated that the agreement would not comply with GPLv3.. Meanwhile, Microsoft has forced Dell, Inc. and Samsung
Samsung
The Samsung Group is a South Korean multinational conglomerate corporation headquartered in Samsung Town, Seoul, South Korea...

 into similar agreements, due to alleged patent infringements of the Linux operating system. Microsoft has also derived revenue from Android by making such agreements-not-to-sue with Android vendors.

In 2011, Microsoft (who had bought Skype) began issuing DMCA takedown notices versus open-source applications which wished to interoperate with Skype.

Draft versions of the GNU GPL version 3 may also conflict with patents on software by preventing any patent holder from enforcing their patents against a user if said patent holder also distributes software covered by those patents under the GPL.

Unisys case

In the late 1990s, Unisys claimed to have granted royalty free licenses to hundreds of not-for-profit organizations that used the patented LZW
LZW
Lempel–Ziv–Welch is a universal lossless data compression algorithm created by Abraham Lempel, Jacob Ziv, and Terry Welch. It was published by Welch in 1984 as an improved implementation of the LZ78 algorithm published by Lempel and Ziv in 1978...

 compression method and, by extension, the GIF image format. However, this did not include most software developers and Unisys were "barraged" by negative and "sometimes obscene" emails from software developers.

Jurisdictions

Substantive law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...

 regarding the patentability of software and computer-implemented inventions, and case law
Case law
In law, case law is the set of reported judicial decisions of selected appellate courts and other courts of first instance which make new interpretations of the law and, therefore, can be cited as precedents in a process known as stare decisis...

 interpreting the legal provisions, are different under different jurisdictions.

Software patents under multilateral
Multilateralism
Multilateralism is a term in international relations that refers to multiple countries working in concert on a given issue.International organizations, such as the United Nations and the World Trade Organization are multilateral in nature...

 treaties
Treaty
A treaty is an express agreement under international law entered into by actors in international law, namely sovereign states and international organizations. A treaty may also be known as an agreement, protocol, covenant, convention or exchange of letters, among other terms...

:
  • Software patents under TRIPs Agreement
    Software patents under TRIPs Agreement
    The WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights , particularly Article 27, is occasionally referenced in the political debate on the international legal framework for the patentability of software, and on whether software and computer-implemented inventions should be...

  • Software patents under the European Patent Convention
    Software patents under the European Patent Convention
    The patentability of software, computer programs and computer-implemented inventions under the European Patent Convention is the extent to which subject matter in these fields is patentable under the Convention on the Grant of European Patents of October 5, 1973...

  • Computer programs and the Patent Cooperation Treaty


Software patents under national laws:
  • Software patents under United States patent law
    Software patents under United States patent law
    Software or computer programs are not explicitly mentioned in United States patent law. In the face of new technologies, decisions of the United States Supreme Court and United States Court of Appeals for the Federal Circuit in the latter part of the 20th century sought to redefine the boundary...

  • Software patents under United Kingdom patent law
    Software patents under United Kingdom patent law
    There are four over-riding requirements for a patent to be granted under United Kingdom patent law. Firstly, there must have been an invention. That invention must be novel, inventive and susceptible of industrial application...


Litigation

Several successful litigations show that software patents are enforceable in the US. See List of software patents for more examples.

Similarly in Japan, software patents have been successfully enforced. In 2005, for example, Matsushita won a court order barring Justsystem from infringing Matsushita's Japanese patent 2,803,236 covering word processing software. A Tokyo court ordered Justsystem to pull their product from the market. On September 30, 2005, Intellectual Property High Court of Japan, which was established in April 2005, granted Justsystems' appeal and overturned the Tokyo District Court decision in October 2005.

Licensing

Patenting software is widespread in the US. As of 2004, approximately 145,000 patents had issued in the 22 classes of patents covering "computer implemented inventions". (see table to the right).

Many software companies cross license
Cross-licensing
A cross-licensing agreement is a contract between two or more parties where each party grants rights to their intellectual property to the other parties.-Patent law:...

 their patents to each other. These agreements allow each party to practice the other party's patented inventions without the threat of being sued for patent infringement
Patent infringement
Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or...

. Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...

, for example, has agreements with IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...

, Sun Microsystems
Sun Microsystems
Sun Microsystems, Inc. was a company that sold :computers, computer components, :computer software, and :information technology services. Sun was founded on February 24, 1982...

, SAP
SAP AG
SAP AG is a German software corporation that makes enterprise software to manage business operations and customer relations. Headquartered in Walldorf, Baden-Württemberg, with regional offices around the world, SAP is the market leader in enterprise application software...

, Hewlett-Packard
Hewlett-Packard
Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, USA that provides products, technologies, softwares, solutions and services to consumers, small- and medium-sized businesses and large enterprises, including...

, Siemens AG
Siemens AG
Siemens AG is a German multinational conglomerate company headquartered in Munich, Germany. It is the largest Europe-based electronics and electrical engineering company....

, Cisco
Cisco Systems
Cisco Systems, Inc. is an American multinational corporation headquartered in San Jose, California, United States, that designs and sells consumer electronics, networking, voice, and communications technology and services. Cisco has more than 70,000 employees and annual revenue of US$...

, Autodesk
Autodesk
Autodesk, Inc. is an American multinational corporation that focuses on 3D design software for use in the architecture, engineering, construction, manufacturing, media and entertainment industries. The company was founded in 1982 by John Walker, a coauthor of the first versions of the company's...

 and recently Novell
Novell
Novell, Inc. is a multinational software and services company. It is a wholly owned subsidiary of The Attachmate Group. It specializes in network operating systems, such as Novell NetWare; systems management solutions, such as Novell ZENworks; and collaboration solutions, such as Novell Groupwise...

. Microsoft cross-licensed its patents with Sun, despite being direct competitors, and with Autodesk even though Autodesk has far fewer patents than Microsoft.

The ability to negotiate cross licensing agreements is a major reason that many software companies, including those providing open source
Open source
The term open source describes practices in production and development that promote access to the end product's source materials. Some consider open source a philosophy, others consider it a pragmatic methodology...

 software, file patents. As of June 2006, for example, Red Hat
Red Hat
Red Hat, Inc. is an S&P 500 company in the free and open source software sector, and a major Linux distribution vendor. Founded in 1993, Red Hat has its corporate headquarters in Raleigh, North Carolina with satellite offices worldwide....

 has developed a portfolio of 10 issued US patents, 1 issued European patent, 163 pending US patent applications, and 33 pending international PCT (Patent Cooperation Treaty
Patent Cooperation Treaty
The Patent Cooperation Treaty is an international patent law treaty, concluded in 1970. It provides a unified procedure for filing patent applications to protect inventions in each of its contracting states...

) patent applications. Red Hat uses this portfolio to cross license with proprietary software companies so that they can preserve their freedom to operate.

Other patent holders are in the business of inventing new "computer implemented inventions" and then commercializing the inventions by licensing the patents to other companies that manufacture the inventions. Walker Digital
Walker Digital
Walker Digital is a privately held American research and development lab based in Stamford, Connecticut. It was founded in 1994 by Jay S. Walker, who also holds the position of chairman as of 2011. The company specializes in creating applications and business solutions that work with large-scale...

, for example, has generated a large patent portfolio from its research efforts, including the basic patent on the Priceline.com
Priceline.com
Priceline.com is a company and a commercial website that helps users obtain discount rates for travel-related purchases such as airline tickets and hotel stays. The company is not a direct supplier of these services; instead it facilitates the provision of travel services by its suppliers to its...

 reverse auction technology. US universities also fall into this class of patent owners. They collectively generate about $1.4 billion per year through licensing the inventions they develop to both established and start up companies in all fields of technology, including software.

Still other patent holders focus on obtaining patents from original inventors and licensing them to companies that have introduced commercial products into the marketplace after the patents were filed. Some of these patent holders, such as Intellectual Ventures
Intellectual Ventures
Intellectual Ventures is a private company notable for being one of the top-five owners of U.S. patents, as of 2011. Its business model has a focus on developing a large patent portfolio and licensing these patents to companies. Publicly, it states that a major goal is to assist small inventors...

, are privately held companies financed by large corporations such as Microsoft, Intel, Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...

, etc. Others, such as Acacia Technologies
Acacia Technologies
Acacia Research Corporation is an American company based in Newport Beach, California, which, through various subsidiaries, purchases patents and licenses them or takes legal action against perceived infringers of its intellectual property. This business model is known as a patent...

, are publicly traded companies with institutional investors being the primary shareholders.

The practice of acquiring patents merely to license them is controversial in the software industry. Companies that have this business model are pejoratively referred to as patent troll
Patent troll
Patent troll is a pejorative but questioned term used for a person or company who is a non-practicing inventor, and buys and enforces patents against one or more alleged infringers in a manner considered by the target or observers as unduly aggressive or opportunistic, often with no intention to...

s. It is an integral part of the business model that patent licensing companies sue infringers that do not take a license. Furthermore, they may take advantage of the fact that many companies will pay a modest license fee (e.g.$100,000 to $1,000,000) for rights to a patent of questionable validity, rather than pay the high legal fees ($2,000,000 on up) to demonstrate in court that the patent is invalid.

See also

  • Agreement on Trade-Related Aspects of Intellectual Property Rights
    Agreement on Trade-Related Aspects of Intellectual Property Rights
    The Agreement on Trade Related Aspects of Intellectual Property Rights is an international agreement administered by the World Trade Organization that sets down minimum standards for many forms of intellectual property regulation as applied to nationals of other WTO Members...

     (TRIPS Agreement)
  • Open Invention Network
    Open Invention Network
    The Open Invention Network is a company that acquires patents and licenses them royalty free to entities which, in turn, agree not to assert their own patents against Linux and Linux-related systems and applications.-History:...

     (OIN)
  • Patent Commons Project
    Patent Commons
    The Patent Commons Project was launched on November 15, 2005 by the Open Source Development Labs . The core of the project is an online patent commons reference library aggregating and documenting information about patent-related pledges and other legal solutions directed at the open-source...

  • Proposed directive on the patentability of computer-implemented inventions
  • Software patent debate
    Software patent debate
    The software patent debate is the argument dealing with the extent to which it should be possible to patent software and computer-implemented inventions as a matter of public policy. Policy debate on software patents has been active for years. The opponents to software patents have gained more...


External links

  • Software and Business Methods on the WIPO
    World Intellectual Property Organization
    The World Intellectual Property Organization is one of the 17 specialized agencies of the United Nations. WIPO was created in 1967 "to encourage creative activity, to promote the protection of intellectual property throughout the world"....

     web site
  • FFII Annotated Bibliography
  • Softwarepatents.eu an introduction to software patents in Europe and Germany (in German)

Economic studies

This paper includes a method of identifying software patents that has proved popular with organisations such as the Public Patent Foundation
Public Patent Foundation
Public Patent Foundation, or PUBPAT, is a nonprofit organization that seeks to limit perceived abuse of the United States patent system. It was founded in 2003 by Dan Ravicher. , there was growing concern by many technology professionals over the number of patents granted that are either too...

.http://www.pubpat.org/softwarepatentwatch/
  • The Software Patent Experiment (PDF
    Portable Document Format
    Portable Document Format is an open standard for document exchange. This file format, created by Adobe Systems in 1993, is used for representing documents in a manner independent of application software, hardware, and operating systems....

    ) Bessen & Hunt 2004.
  • A Review of Bessen and Hunt's Analysis of Software Patents by Robert Hahn and Scott Wallsten of the American Enterprise Institute
    American Enterprise Institute
    The American Enterprise Institute for Public Policy Research is a conservative think tank founded in 1943. Its stated mission is "to defend the principles and improve the institutions of American freedom and democratic capitalism—limited government, private enterprise, individual liberty and...

    .
  • A Reply to Hahn and Wallsten by Bessen and Hunt, 2004.
  • Federal Trade Commission 2003 patent report (PDF
    Portable Document Format
    Portable Document Format is an open standard for document exchange. This file format, created by Adobe Systems in 1993, is used for representing documents in a manner independent of application software, hardware, and operating systems....

     file) Also FFII review of FTC report.
  • CEP Discussion Paper No 740, August 2006, Strategic Patenting and Software Innovation by Michael Noel and Mark Schankerman, London School of Economics and Political Science

Books

  • Patent Failure, James Bessen and Michael Meurer, Princeton University Press, 2008.
  • Math You Can't Use: Patents, Copyright, and Software, Ben Klemens, Brookings Institution Press, 2005.
  • The Patent Wars: The Battle to Own the World's Technology, Fred Warshofsky
  • Information Feudalism - Peter Drahos
  • Florian Müller, No Lobbyists As Such (2006). 377 page play-by-play memoir of the story of Florian's part in the campaign over the EU software patent directive.

Papers and presentations

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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