Old World and New World Software Patent Problems

April 30, 2009

by Rob Tiller, Vice President and Assistant General Counsel, IP

Today Red Hat took its efforts to confront the problem of software patents to new ground by filing a brief with the European Patent Office. The brief explains that software patents hinder software innovation, and that there is a sound legal basis not to expand availability of such patents in Europe.

Last year, Red Hat addressed the software patent problem in the U.S. case of In re Bilski, where the court of appeals handed down a new – and more FOSS-friendly - test for determining whether an invention is patentable. In the new brief, we explain how Bilski may ultimately be interpreted to remedy the problem of software patents.

The proceeding of the European Patent Office is called a referral to the Enlarged Board of Appeal, which addresses important general issues of patent law under the European Patent Convention, or EPC. In the current referral, the Enlarged Board is addressing the exclusion set forth in in the EPC for computer programs. Prior decisions have applied the law inconsistently, so that the exclusion for computer programs has been “interpreted” to allow thousands of software patents. The Enlarged Board is charged with clarifying this law, and could either limit the availability of software patents or expand it.

As explained in our brief, there are strong practical and legal arguments against software patents. It is increasingly accepted as settled by scholars that software patents impose enormous economic costs, including costs of litigation, that are not justified. All software developers face a risk that code they created without reference to a patent could nevertheless someday be argued to infringe patents unknown to them. With hundreds of thousands of software patents in the U.S., there is no practical way for anyone, including giant software companies, to rule out this possibility.

The numbers of software patents in Europe is smaller, and there’s a straightforward legal argument based on the language of the EPC that the number should be zero. Our brief argues that the case law that limiting the computer program exclusion based on such vague concepts as a “technical effect” should be set aside, and the exclusion should be applied according to its plain language.

In spite of the clear risks that the patent system poses, not only to FOSS but also to proprietary software, there are still strong supporters of software patents. There are occasional examples of software patents that result in large profits for the patent holders, but they are few. In this respect, the patent system is very like the lottery, where out of many players, a very small number win big. Most lottery players, and most patent players, start with dreams of vast riches, and only end up the poorer. Remarkably, despite the economic reality of consistent losses, some will not give up the game.

Whatever the evolutionary explanation for such behavior, it’s clear from the briefs submitted to the Enlarged Board that Red Hat’s analysis of problems of software patent is not the majority view. But the Bilski decision is a reminder that positive legal change is possible. As our brief today shows, we’re continuing to fight for such change.

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