The Scramble for Software Patents

It takes years to conceptualize and develop software products, but not much effort to replicate the software if it has not been patented.

Have you come up with an idea, or an innovative process, or developed a neat little prototype around it? Are you totally excited about it and want to release it in the market and test it out? Hold on a bit, because you need to first protect your intellectual property.

It takes years to conceptualize and develop software products. However, once the product attributes are well defined, it does not take significant effort to replicate the software on a different platform or language if it has not been patented.

Can a copyright protect a new software product idea or process? A copyright on the software only protects the exact replication of the software code. A copyright does not protect another from replicating the core process, functional aspects, or idea of the software product. Also, a copyright provides no security if a similar code is proved to have been independently developed. Patents, on the other hand, provide an impregnable protection for software products and processes.

The grant of a patent for a software product or process grants to the owner the right to exclude others from making, using or selling software that perform similar functions. In simplest terms, a software patent protects innovative software products and processes.

The valuation of a software product company is increasingly dependent on the strength of its patent portfolio. Software patents level the playing field between small and large sized software product companies. A small software company with cutting edge patents such as Research In Motion can command a significant presence in their market or domain.

A startup with a strong patent portfolio can carve out a niche market and securely position itself. Take the case of the Bangalore-based startup, Textual Analytics. Focused in the area of contextual search in the Internet, this startup developed a strong patent portfolio. Madan Pandit, CEO of Textual Analytics says: “Our filed software patent applications give us the confidence to enter the internet search markets that have large and well established players”.

Alan Kay, the inventor of object-oriented programming, once said, “The best way to predict the future is to invent it.” Organizations, big or small, use patents as a means to protect their inventions. For instance, Microsoft holds about 5000 patents, and IBM about 40,000 patents. Approximately 145,000 software patents have already been granted by the US patent office and about 17,000 new patents are issued every year.

Trade secrets may be used to protect an idea in some industries. Coco Cola Inc., for example maintains its Coca-Cola product composition as a trade secret. However, it is difficult to maintain software processes as trade secrets primarily because the inventive idea in a software product can be reverse engineered. A significant part of the intellectual property of a software product is exposed on the release of the new product. There is a direct and transparent relation between the functional aspect or features of software and the software’s internal processes, which requires less effort to reverse engineer the product.

The breadth of intellectual property that can be captured by a software patent is significant Software patents can be obtained for inventions that disclose physical components, or for function that it performs that are new and non-obvious. Software on its own is not patentable but the functions it performs are patentable. It is the machine, process, or manufacturing action utilizing the software that is patentable. Some examples of patentable software processes are editing technologies, control functions, compiling functions, user interactive software and operating system technologies. Business methods and mathematical algorithms, which use new manipulation of language-specific codes to obtain a predetermined result, are also patentable. The above mentioned software processes, business methods and mathematical algorithms covers almost anything one can think of in the high technology industry.