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Patent Attorney Axel H Horns' Blog on Intellectual Property Law.

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Monday, September 18, 2006

No Dangerous Effects of Patents on Computer-Implemented Inventions.

Mr. Robert P. Merges, University of California, Berkeley - School of Law (Boalt Hall), wrote in his new paper

Patents, Entry and Growth in the Software Industry:

"Abstract:

In the late 1980s and early 1990s, people in the software industry often said that the coming of patents would spell doom, particularly for small companies. The entry of new firms - the seedbed of growth in the industry - would dry up, and only large, bureaucratic and decidedly non-innovative firms would remain. This paper concludes that these predictions were wrong. New firm entry remains robust, despite the presence of patents (and, in some cases, perhaps because of them). Successful incumbent firms have adjusted to the advent of patents by learning to put a reasonable amount of effort into the acquisition of patents and the building of patent portfolios. Patent data on incumbent firms shows that several well-accepted measures of 'patent effort' correlate closely with indicators of market success such as revenue and employee growth. Whatever the effects of patents on the software industry, this paper concludes, they have not killed it. [...]"

Once more an empirical indication that those folks of FFII and Priatenpartei playing Cassandra are wrong indeed ... (Link thanks to

Mr. Dennis Crouch's Blog Patently-O).

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Falling from the 100th floor, the guy was heard to remark, as he fell, "so far, so good. So far, so good".

Seriously, the fact that the software industry has not been killed is hardly a recommendation for the patent system. If this is the best proof you can find of the benefits of software patents ("they are not fatal")...

US tort law is costing the medical industry about 30% of total costs. No-one is claiming that the medical industry is dead in the US, but to claim that tort law is good because it is not fatal is a strange argument.

Surely there are empirical measurements that can show the correlation between patents and innovation? How about investment, per sector?

Is it a coincidence that the current wave of VC activity in Silicon Valley is mainly aimed at open source firms, who do not bother with patents at all?

Anyhow, I am glad to see some attempt, however incomplete, to measure the effects of software patents. The debate has been excessively focussed on dogma, belief, and name-calling, rather than hard facts.

# posted by Pieter Hintjens : 21 September, 2006 13:54

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Please read the Disclaimer & About This Website (Pflichtangaben gemäss TDG) section. Feel free to contact PA Axel H Horns via e-mail horns@ipjur.com. BEWARE: DO NOT SEND CONFIDENTIAL INFORMATION UNENCRYPTED VIA E-MAIL. USE OF ENCRYPTION SOFTWARE IS HIGHLY RECOMMENDED. PA AXEL H HORNS IS PROVIDING SUPPORT FOR ENCRYPTED E-MAIL MESSAGES USING PGP OR PGP COMPATIBLE FORMATS. THE PGP PUBLIC KEY FOR PA AXEL H HORNS IS AVAILABLE HERE. THE GnuPG PUBLIC KEY FOR PA AXEL H HORNS IS AVAILABLE HERE. Dipl.-Phys. Axel H Horns is Patentanwalt (German Patent Attorney), European Patent Attorney as well as European Trade Mark Attorney. In particular, he is Member of:
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