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Saturday, March 27, 2004

The Myth of the Software Patent Thicket.

Ronald J. Mann of the

University of Texas School of Law has published a research paper

Law and Economics Working Paper No. 022 under the title "The Myth of the Software Patent Thicket: An Empirical Investigation of the Relationship Between Intellectual Property and Innovation in Software Firms". Mr. Mann writes in the abstract:

"This paper is the first part of a wide-ranging study of the role of intellectual property in the software industry. The project focuses on the software industry because of the importance of that industry to the modern economy, because of the importance of innovation to that industry, and because of the well-known difficulties of accommodating traditional intellectual-property regimes (patent, copyright, and trade secret) to innovation in the industry. [...] The paper closes by discussing the implications of the patent analysis for recent debates about the value of patents in the software industry. The paper presents evidence about existing practices in the industry suggests that technology in fact is readily available, rebutting the prominent claims of a patent thicket that is supposedly stifling innovation in the industry. On the contrary, I argue, to the extent patents have an important effect in the industry, it is an effect that inures primarily to the benefit of the smaller firms trying to find a foothold from which they can compete."

I expect the activists from the

FFII e.V. will dislike that paper because of its pro-capitalistic approach to the problems posed. However, Mr. Mann gives in his paper a note on the future of Open Spurce Software (OSS):

"[...] In my mind, the biggest question about the effectiveness of software patents relates to the interrelation between commercial software development (the topic of this paper) and the open-source movement. This paper relates almost entirely to the commercial software industry, where software is developed and commercialized in an institutional way. My evidence suggests that within that framework patents are useful, largely because they offer more benefits than costs to small firms. However, coexisting with the commercial software industry is a large and apparently growing open-source community, which develops software largely without commercial investment or affirmative IP protections.304 Those who work in that community may have little or no need for patents. The cooperative nature of development obviates any need for the actual and implicit cross licensing that disseminates access to technology throughout the commercial software sector. Similarly, because open source developers do not depend on outside equity investment to any significant degree, the limited ability to appropriate a software invention poses little harm to them.

The problem, however, is that the open-source community does not exist in a vacuum. It exists in a world in which the commercial software industry is building up large portfolios of protected IP, portfolios that pose a serious threat to the open-source community. To put the matter in a current context, suppose for a moment that the Linux operating system in fact does infringe in a substantial way patents held by SCO. That could result in liability for all of the many firms using the Linux operating system. The problem is that the open-source community has set itself outside of the cooperative IP framework of the mainstream software industry. Thus, its members have no patents of their own with which they might protect themselves in such litigation. At the same time, it has developed its software with the same cavalier attitude to the possibility of patent infringement as commercial software firms exemplify. Those two habits cannot coexist in the long run.

That raises the question, in turn, whether the potential for high-quality software development by the open-source movement justifies eradication of software patents even for the commercial software industry. It is impossible to answer that question definitively without evidence that would allow a comparative weighing of the benefits of open-source software against the benefits that the commercial software industry derives from IP. In any event, that question is far beyond the scope of this paper. I note it here only to define the bounds of my analysis. The primary goal of this paper is to shed light on the role of IP in the commercial software industry. I believe I have offered some good reasons to think that role might be positive. Whether that role justifies any harm IP might pose to open-source developers is a question left for another day. [...]"

It is somewhat disturbing that he writes about allged patent infringement in the context of the

SCO row. As far as I know there are merely copyright / trade secrets issues at stake. (Link thanks to

Lawrence Solum's Legal Thoeory Blog).

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Saturday, March 27, 2004

The Myth of the Software Patent Thicket.

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