This document discusses software patents, including their history, examples of software patent cases, facts about software patents, and arguments for and against software patents. It outlines that software patents grant inventors exclusive rights over novel software inventions, and notes the differences between patents and copyright. The history of software patenting in the US and Europe is reviewed. Examples of notable software patent cases involving spreadsheets, MP3 technology, and the simplex algorithm are provided. Statistics about software patents in the US, Europe, and Asia are presented. Arguments both for and against software patenting focus on their potential impacts on innovation and competition. In conclusion, the document states that debates around software patents pit capitalist and open source principles against each other.

1. On Software Patents Presented by Dong B. Calmada PLUG and Bukas (Philippines)

2. Outline What is software patenting? How do copyright and patent differ? History of software patenting Some examples of software patent cases Some facts on software patents Arguments for and against software patents Conclusion

3. What is software patent? A patent on “novel” software inventions or what Europe calls computer-implemented inventions (CII). A patent on any performance of a computer realised by means of a computer program (FFII). Computer programs are considered as inventions like machines, processes, and the like. A patent on an invention that utilizes a computer to manipulate numbers that represent concrete, real world values. (US, 1990s)

4. History of software patenting In Europe, patents were granted in the 60s whether they involved computer algorithms or not. In the US, patentability of softwares was not allowed by the Patent and Trademark Office in 1970s until the Supreme Court intervened and ruled in 1981 that a computer program may be granted a patent as long as it is used to represent real-world realities (e.g., a program that monitors and analyzes earthquakes)

5. Patent vs. Copyright Patent gives an inventor the right to exclude all others from making, selling, or using an invention for 17 years. Copyright inheres in books, music, and other works of authorship from the moment they are created. Copyright protects expression but not underlying ideas. Patents protect useful processes, machines, and compositions of matter.

6. Software patent examples In August 1989, Refac International, Ltd., sued six major spreadsheet publishers, including Lotus, Microsoft, and Ashton-Tate, claiming they had infringed on U.S. Patent No. 4,398,249. The patent deals with a technique called "natural order recalc," a common feature of spreadsheet programs that allows a change in one calculation to reverberate throughout a document. Refac itself does not have a spreadsheet program and is not even in the software industry. Its business is acquiring, licensing, and litigating patents.

7. Software patent examples (2) On May 21, 1962, a British patent application entitled "A Computer Arranged for the Automatic Solution of Linear Programming Problems" was filed. The invention is concerned with efficient memory management for the simplex algorithm, and may be implemented by purely software means. The patent, GB1039141, was granted on August 17, 1966. Corresponding patents in the same family were granted in five other European countries.

8. Software patent examples (3) The MP3 format Several patents were filed in 1987 covering various techniques and algorithms used in the mp3 format. In 1992, mp3 became an official part of the MPEG standard. Thus, mp3 became a popular choice by the Napster and file-sharing movement in the 90s. In 1998, Fraunhofer Institute and Thomson Consumer Electronics asserted patent over mp3 and demanded royalties.

9. Software patent examples (4) A federal jury in San Diego has ordered Microsoft to pay $1.5 billion to Alcatel-Lucent in a patent dispute over MP3 audio technology used in Windows.

10. Some facts about software patents In the US: In 2003, software patents grew rapidly, comprising 15 percent of all patents in the US. Patents are acquired primarily by large manufacturing companies known for strategic patenting. Only 5 percent comes from software publishers. Over 70,000 software patents are issued every year since 2004.

11. Some facts about software patents (2) In Europe: Since 2002, the EPO has approved over 30,000 software patents. The struggle against software patents does not abate. In 2003, the EU parliament voted against patentability of computer algorithms and asserted freedom of publication and interoperation. However, since 2005, there has been a move towards a treaty called European Patent Litigation Agreement not subject to legislative review.

12. Some facts about software patents (3) In Asia: Software is not patentable in India. Software is directly patentable in Japan, the same with Australia. No patenting law in the Philippines does not categorically include softwares. But there are unvalidated reports that the IPO has patented computer algorithms included in several inventions.

13. Arguments for software patents Patenting software inventions promotes investment in research and development. A patent must publicly disclose the invention and so educate the public and advance the state of the art of the invention. Thus patents accelerate software development by making previously unknown and not obvious software inventions public. Organizations should be able to protect their intellectual property.

14. Arguments for software patents (2) Protection for software by patents is already sufficiently limited Facilitates the entry of new (small) firms with a limited asset base or difficulties in obtaining finance

15. Arguments against software patents Patenting software inventions takes investment away from research and development. The costs of determining if a particular piece of software infringes any issued patents is too high and the results are too uncertain. Traditional copyright has provided sufficient protection to facilitate massive investment in software development. Most software patents cover either trivial inventions or inventions that would have been obvious to persons of ordinary skill in the art at the time the invention was made.

16. Arguments against software patents (2) Developers may be forced to pay license fees for standards that are covered by patents. Patent applications are often kept secret until after a new invention becomes widely used. Hence developers have no way of knowing if a useful new idea may become patented in the future and no longer available to them. Legal actions involving nebulous intellectual property issues are very expensive, slow and unpredictable.

17. Arguments against software patents (3) Enterprises that receive numerous dubious patent infringement notices cannot afford to simply pay what each patent holder demands. Software patents are likely to destroy open source and small to medium software enterprises (SMEs) that do not have a large defensive patent portfolio.

18. Arguments against software patents (4) Software is a field of mathematics. Software is a mathematical algorithm, a fancy mathematical equation, a calculation. Mathematical algorithms, equations, and calculations are not inventions any more than a number can be an invention. Patent examination (US and EP) is too slow.

19. Conclusion Software patents have been pushed because of their purported benefits in terms of innovation, competition and transaction costs. Anti-software patents use the same themes to argue against software patenting. In general, despite its announced intent, software patenting has largely been used to the capitalist advantage and has run against the free and open source software principles.