1. In terms of patent law, software is special
To paraphrase Mark Twain, reports of the death of software patents are slightly exaggerated. In fact, the early response to the US Supreme Court's decision in Alice Corp. v. CLS Bank International et al. appears to have breathed new life into the patentability of software by acknowledging, albeit subtly, that the software industry is unique and therefore requires its own set of rules. (Alice Corp. Pty. Ltd. v. CLS Bank Int'l (2014) 134 S.Ct. 2347 [189 L.Ed.2d 296, 110 U.S.P.Q.2D (BNA) 1976].)
Daniel R. Brownstone of Fenwick & West LLP outlines the goals of a revised software patent system in Kickstarting an Old Patent System for the New Software Era. First and foremost, the software industry moves too fast for the patent process to keep pace. Brownstone proposes modification of the patent-examination system:
"Under a modified system, examiners could simply search for novelty, leaving the question of obviousness to litigation as is now done in New Zealand. Alternatively, software patent applications can be limited to a small number of claims, or the applicant could designate which claims should actually be examined. Software patents would then issue much more quickly, allowing them to be enforced while the innovations they describe are still technologically relevant."
Another criticism of the patent rules as they relate to software is that the patent term is too long, which creates a situation where unsuspecting defendants are sued for infringing old software patents whose owners assert "tortured interpretations of their claims that go well beyond the scope of what the inventor originally envisioned." Brownstone recommends shortening the patent duration to seven years or so, which more closely parallels the average lifespan of a software product/technology. Other suggestions for a modified software-patent system are to put the burden on the plaintiff rather than the defendant to prove the validity of a software patent, precluding injunctions, capping damages, and adopting a loser-pays model.
The extent of the problems associated with software patents is illustrated by Vox's James Bessen in The Case Against Software Patents, in 9 Charts. Acknowledging the dangers of oversimplifying a complex issue by highlighting isolated statistics, the charts still serve to indicate the unique characteristics of software in terms of patentability. For example, a higher percentage of patents relating to software (4.6 percent) and business methods (13.7 percent) are litigated than the number for all patents (2.2 percent) or for chemical patents (1.1 percent). Forty percent of software patents were found to have claim construction errors on appeal, compared to 24 percent for non-software patents. The percentage of patents estimated to have at least one invalid claim were much higher for those owned by patent licensing firms (also known as non-practicing entities or "patent trolls") than for all patents: 59 percent and 27 percent, respectively.
Software patent cases continue to inundate the courts. According to figures from the US General Accountability Office, the number of defendants in software patent lawsuits increased from fewer than 2,000 in 2007 to more than 6,000 in 2011. Over the same period, the number of defendants in non-software patent suits held steady at just over (or slightly under) 2,000 annually.
2. Software innovations are clearly patentable