This paper by James Bessen has stirred up the world somewhat regarding software patents - and a good thing too. As well as this Groklaw article (it's also worth looking at this one about the proposed changes in the US patent system), it even got to be a Slashdot article
The headline from the Bessen article is that small companies do not generally obtain patents, whereas large companies get them by the truckload, and that this is bad for innovation.
In the UK, software is not patentable per se, neither are algorithms. Bessen states that the case In re Alappat was the one that changed the nature of things in the US system, and allowed software and algorithms to be patented. Let us hope that the UK and EU do not allow the US to bully them into allowing software patents, and especially not via the tool of ACTA. What would be even worse of course is the US bullying the UK and EU to accept US patents as valid in UK and EU. This would likely kill small business software development stone dead. And UK software innovation would go out with it. Remember the US strategy is to support US development not to foster UK development.
What is the problem? Well a patent is enforceable even if the person violating the patent didn't know about it. Say you write some proprietary software and guard it as a commercial secret so there is no publication. Say a patent troll wants to target you. They find one of their seriously general patents which is bound to have been violated, cf. the patent on linked lists as an obvious example, they get an injunction to have your source code analysed to see if it is in violation. Along the way they will of course find others of their patents that might apply, and now they have access to your software,they can do lots of research on it. They then threaten to take you to court unless you pay licencing fees. At this point the issue is one of extortion (normally considered a criminal offence, and yet completely legal in the world of patents), you either suffer the indignity of paying licencing fees or you fight the case in court. Either way you lose financially. And most small companies cannot afford to go to court, it is simply too costly. So they either pay the fees or go into liquidation. Or sometimes, get bought by the patent holder for a trivial fraction of the value of the company.
So the situation where potential innovators do not play the patent trolling game but big companies do, means either potential innovators avoid any area that might be seen as competition to the big companies or they develop simply to sell to the big companies (not to create their own business). The big companies thus drive the agenda, usually for their own ends, and genuine innovation is sacrificed at the altar of big company profits and stock price.
The conclusion is inescapable: software patents destroy innovation in software development. Anyone professing to support innovation, must therefore be against software patents. Yet the UK government is towing the US party line and supporting ACTA and hence software patents. Clearly the UK government wishes to terminate all software innovation in the UK.
Sadly though software patents are now an integral part of the US business model. Witness the way Microsoft is using its unnamed patents as ammunition to force companies making Android phones pay licence fees for what it claims is its intellectual property. What intellectual property can Microsoft possibly have embedded in the Android system? Microsoft has made no contribution to Android and Android is not based on any Microsoft technology. Microsoft of course will not say and the contracts of licencing require silence from the licencee. This is definitely a "shakedown" operation by Microsoft. Although in any other area than licencing patents this sort of extortion would be illegal, with patents it is a valid business operation. So you can't blame Microsoft for employing valid business tools even if it is evil and objectionable.
Clearly the "conspiracy theory" goes along the lines of: Microsoft are trying to validate claims they will eventually take up against Google and Oracle, by having a lot of small companies already signed up as licencees. The eventual goal is clear, Microsoft are failing to keep their position in the market by creating new and possibly innovative products, so they are turning to software patent trolling as a way of generating an income stream from other people creating new and possibly innovative products - well at least products that people want to buy, in increasingly large numbers.
It would be good for the US government to put a stop to this software patent trolling business so that everyone can get on with innovating and letting the market decide who makes money and who doesn't. Software patents are a tool of protectionism, indeed a protection racket. It is a mechanism for squashing innovation. Let us hope the UK and EU governments recognise this and do the right thing for innovators. Make it clear that software and algorithms are not patentable, and let the innovation start.