Copyright Vs. Patent: The Future Of Software Development


The Economist has published a thought-provoking article that poses the thorny question: do patents help or hinder innovation?

Patents grant inventors a twenty year monopoly in which to build and benefit from their idea. This is great news for the inventor, but blocking anyone else from tinkering with this pre-existing technology, is always going to have a negative effect on competition. Healthy competition and innovation often go hand-in-hand, as companies and individuals clamber to come up with the next, exciting interpretation of a product before anyone else. But, if an idea is patented, then it becomes a one-person race. The patent-holder doesn’t have the same motivation to get the best possible version of their product into the market as quickly as possible.

Patents discourage the combining and recombining of inventions to yield new products and processes, and encourage insular development. Patents advocate maintaining a monopoly on intellectual property, rather than co-operating with other companies and inventors, to come up with the best hybrid product possible. Even when it is necessary to negotiate cross-licensing deals with competitors, the time and effort it takes to pour through the portfolio of existing patents, combined with the transaction costs of negotiating the deal, is what the The Economist calls a “tax on innovation.” The cost of navigating the tricky cross-licensing waters, may exceed the potential commercial value of a cross-patent product. The result? A potentially important new product is simply not commercially viable, and never sees the light of day.

The popularity of patents has inevitably resulted in an increase in litigation. A commercially successful idea is bound to attract waves of imitators: which means plenty of ongoing court fees. It’s difficult to argue that maintaining patents increases overall costs and, with only so much money to go around, that is bound to have an adverse affect on the creation of new products. “In a majority of cases, the cost of litigation will far exceed any revenue the inventor may subsequently earn from royalties or licensing,” claims The Economist, which makes you wonder whether it’s even worth having a commercially viable idea to begin with!

But, plans are currently underway to shake up the patent system within the sphere of software development. America’s Supreme Court is on the verge of issuing a ruling which, apparently, will make it more difficult to get a patent for a business process. And, since a business process is usually just a method for solving problems using a finite sequence of instructions, it is fair to say that ‘business process’ equates to ‘computer algorithm.’ This ruling could potentially bar all sorts of ongoing software patents. The Economist claims such a ruling could cause an important shift in the attitudes of software developers. Instead of seeing their ideas as patentable, they will see the expressions of their ideas as copyrightable.

The Economist’s argument that copyright is the future of a software industry bogged down in patents, fails to factor in a few things. Firstly, copyright can stretch until one hundred years after the author’s death, whereas a patent lasts for around twenty years. Surely, the longer monopoly granted by copyright, should be taken into account in any discussion about legal rights damaging innovation. In some instances, a long copyright on an “expressions of ideas,” might have more negative impact on the market, than a shorter patent on the idea itself. Also, some computer algorithms take vast amounts of time and effort to design, and it is perhaps not unreasonable that an organisation would want to protect this investment.

“Copyright protection is far too narrow in scope to provide any commercially significant protection against acts other than straight piracy,” commented one visitor to the article. And, while a ‘loosening’ of the intellectual property laws could accelerate development, with organisations and individuals all tinkering with one another’s designs and coming up with the best possible product; innovation and invention still have to be worthwhile, in the commercial sense. All that work isn’t worthwhile if someone else can use it. It’s a balancing act and neither copyright nor patents on their own, can get the balance absolutely spot on.

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