The EFF late last week issued a statement on the fact that the Supreme Court had agreed to hear the case of CLS Bank vs Alice. This statement was an acknowledgement of the fact that the Supreme Court has long needed to hear such a case and to make a definitive decision in the case of abstract software patents. They also went over what exactly was at stake in the case, since once the Supreme Court makes a decision it is very rarely changed later on, even by later Supreme Courts.
Basically, Alice Corporation PTY. LTD is the holder of numerous US patents that are described as abstract software patents. The four patents that the company holds, as asserted by the court documents, are all derivations of a concept patent concerning, "the management of risk relating to specificed, yet unknown, future events." Such broadly sweeping patents do not actually patent a type of code or a process of executing that code, but rather the concept of a certain solution to a problem without any application.
The court case stems from the fact that Alice Corporation claims that CLS Bank has infringed upon their abstract software patent and therefore owes them money. And if you look at the patents themselves, they don’t concretely really do anything. Part of the problem with granting such patents is that they don’t actually do anything other than establish a barrier for anyone else trying to program an application that somehow manages to infringe upon such a patent. These types of patents are purely designed for patent trolls and should never be granted to begin with, and that’s part of the problem, the USPTO (United States Patent and Trademark Office) is granting patents for things that simply shouldn’t be patented to begin with.
This brings us to the entire argument about software and software patents. While the EFF strongly stands behind software and software patents (with abstract software patents being excluded), I believe that there is some merit in considering the fact that software patents as a whole should be abolished. After all, software is merely an intangible idea that only exists within the confines of a computer. If you look at the implications of software patents, you can see that most of the software patents that exist today are designed to protect multi-national corporations’ investments in either an entire software business or the software that complements their hardware.
Without the idea of software patents, we couldn’t have companies like Microsoft, Google or Facebook, but is that really a bad thing? Who says that someone couldn’t take what Microsoft, Google and Facebook do and make it better by simply building upon their already existent code without having to worry about the legal repercussions of doing so? Surely, most of these companies would never invest as much money into software if they knew that their software IP wasn’t protected.
Part of the reason why we have such strong software patent protections is that the profitability of software, when patents are considered is far greater than any other business on earth. Look at the countless billions of dollars that are made by various software companies purely on the amazing margins they get from selling their software. Many hardware companies salivate at the idea of 1000% margins (before cost of labor is assessed). The truth is that many software engineers are getting paid 6 figures and more purely because of the profitability of the software business and the ability to encourage better software engineers through higher pay. If you look at our high-tech economy it is very software driven and that’s because its what our public company, IPO-encouraged, VC-backed society supports.
Without software patents, I still believe that software would exist and that companies would still build software, because they have to. But I don’t think we would see nearly as many Facebooks, Twitters or Instagrams. Additionally, I believe that many companies would have already invested enough money into robotics that we probably wouldn’t need as large of a workforce and would eventually be driven towards software anyways. But right now, we have a software economy with very few players and very few gate keepers all trying to find the next big thing.
The way our high-tech economy works right now, software patents are the bread and butter of Oracle, Google, Microsoft and Apple. These four companies combined account for over 1 trillion dollars in market cap and yet, if software patents were all invalidated tomorrow, we could see half if not more of that evaporate. Every high-tech company right now is striving to become a software company (if they aren’t already). Companies like Nvidia that have traditionally been considered hardware companies are now moving more and more towards software and now employ more software engineers than hardware engineers. The same goes for IBM, a company that has slowly but quietly moved themselves away from any and all hardware businesses.
So, right now, such a law suit could pave the way for more freedom to create new software, but still would not break the established software giants from having their IP protected. Sure, no engineer or software company wants to hear it, but there could eventually be a future where software won’t be patented. Then again, all of the corporations that want software to be patented could easily influence the politicians in America to protect their walled gardens.