Software Patents: Justifications and Arguments

As one part of the subject matter of Intellectual Property Law (hereinafter IP), patent is mostly referred as “hard IP” as opposed to “soft IP” which is used to refer copyright, trademark, trade secret and other form of protection. Patent law maintains the lion’s share in the discussion of the subject matter of IP.

Any jurisdiction that tries to govern the patent regime primarily defines the statutory subject matter and provides what should and should not be patented. Under the United States (US) patent system, Section of the Patent Act  provides “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent.” While this provision clearly instructs what to take before the United States Patent and Trademark Office (USPTO) claiming patent protection, the US Supreme Court in the Bensoncase  has provided categories which are not patent-able subject matter, these include; natural phenomenon, laws of nature, abstract ideas, and mathematical algorithms.

The main purpose of the law to confer the patentable and non-patentable subject matter is because, patent protection grants a monopoly right excluding the invention from the public domain. This paper mainly focuses on the issue of patentability of computer programs (software). The emergence of the idea of software patent in ’s and early ’s invites scientists and legal scholars to the discussion table and led to variety of arguments in favor and against of this concept.

In this paper, the writer primarily addresses the theoretical basis for software patent, and discusses the selected arguments in favor of and against the protection thereof. Then, briefly discuss the likely impact of excluding software patent on other fields of technology as well economic development at large.

II. Theoretical Basis of Software Patent

The emergence of the Intellectual property gives rise for a debate on whether it should or should not be protected by law. The main arguments lies on maintaining the balance between the individual inventor’s or author’s interest to exclusively monopolize his or her own piece of work and the interest of the mass to access everything on the public domain.

The debates are contextually similar in case of software patents. The main arguments in favor and/or against software patents are deeply rooted in the philosophical justifications discussed below. The writer discusses; natural rights theory, theory of utilitarianism and Personhood (personality-based) theories to justify the patentability or non-patentability of computer programs.

1. Natural Rights Theory

The natural rights theory’s justification is often described as “the labor theory” or a “labor theory of value.”  This philosophy as characterized by writings of John Locke holds that “we all own the fruits our labor.”  Lock argued that once a person “pulls something out of the common” and mixes his labor with it, he has an ownership interest in that thing, because his labor has attached to it, and “if anyone were to take it without permission or compensation, that person would have taken the owner's labor as well.”  Locke’s argument has two main premises, first, the “mixing labor” premise which refers to productive activities and second, the labor theory of “value,” that argued the productive activities are or should be moral activity which creates the goods that sustain human life.

As a justification for the (software) patent system, the proponents of this theory stated that when something is removed from the common (public domain), there must remain enough for others.  In other words, when the inventor (s) receives absolute monopoly in the form of patent (i.e. “pull something out of the common”) they must provide full disclosure to promote a robust “public domain” and ensure that the ideas are still available to all.  Those who argue in favor of software patents based on the natural rights theory provides, software, as other fields of technology, are the results of “mental labor,” and software developers have employed their time, money, knowledge and labor, to develop the inventions.

However, this theory is not without critics, it’s criticized for failure to answer why society needs to acknowledge the natural rights of man?  “Under the natural right theory, this explanation is given as a divine command and natural law, as if a divine power will gave the command to the industrious and as a result, the labor based reward theory was born.  Moreover, this theory cannot be applied to software patent and patent law in general as the theory stands today,  because, its argument concentrates on the rights of an author rather than on the rights of a patent holder.  Furthermore, labor, alone, cannot be the sole justification, because, physical labor is not involved in intellectual creation, and thus would seem to poorly justification.

2. Utilitarian Theory

Utilitarian theory is the most dominant theory in providing justification for the protection of the current intellectual property regime.  According to this theory, protection should be maximized to ensure the proper incentives for the production of intellectual properties. This theory asserts, the granting of exclusive rights fosters innovation and creates incentives for the invention of useful tools and machines. This theory highly compromised the rights and interests of creators and owners of intellectual property with the public interest.”

The US patent system is one of such systems that are based on the theory of Utility. The Constitution states that “Congress shall have Power . . . to promote the Progress of Science and useful arts, by securing for limited times to … inventors the exclusive right to their respective … discoveries.”

Proponents of Utilitarian principles argue, without patent rights, software developers do not have economic incentives to create the important computer programs.  Software patents help to “facilitate progress, purportedly solve public goods problem, prevent market failure, and spur innovation.” They also argue that the public disclosure requirement of the Patent Act gives other software developers information to develop new software. Grunerin his article lists five public benefits that may be accrued from the incentive to software developers through protecting software patents, these are;

 i.      “Encouraging inventive efforts through the promise of economic rewards to successful inventors,

 ii.    promoting public disclosures of useful inventions through issued patents and broad scale invention marketing,

 iii.  Furthering the investment of resources in the refinement and popularization of inventions to achieve the commercialization and widespread availability of patented products and services,

 iv.  Ensuring prospective studies to identify additional or improved applications of inventions and

 v. Limiting duplicative efforts to discover perfect and improve patented inventions, thereby maximizing society's net gain from each patented invention.”

3. Personality-Based justification of software patent

This third justification for the protection of IP is based on the philosophies of Hegel. This theory argues, “People’s identity becomes deeply connected to things they personally own, and such things deserve a special status under property law.”  Hegel maintains that individuals have moral claims to their own talents, feelings, character traits, and experiences. A Hegelian property analysis has two important implications for IP as well as software patents. First, if society decides to adopt an IP law regime, then it is logically coherent to analyze the regime as a form of “true” property. Second, the Hegelian property analysis can aid legislators and judges in formulating a more internally consistent and predictable positive law.

However, this theory did not establish the relevant moral claim when it states “we own our feelings, character traits, and experiences.” Moreover, even if it could be established that individuals own or have moral claims to their personality, it does not automatically follow that such claims are expanded when personalities become infused in tangible or intangible works. And more importantly, there are many intellectual innovations in which there is no evidence of the creator’s personality, such as a “list of customers or a new safety pin design.” Therefore, it is unlikely to necessarily establish a relationship between the “invented” software, and the personality of the developer (s) of such software. For this reason, the writer believes that its less strong justification to argue based on this theory.

III. Arguments against Patentability of Software

Those who are against patentability of software programs, mainly provide the following arguments. They primarily states, software falls under abstract ideas and algorithms that are barred under the Patent Acts of several countries.  The US Supreme Court in the Diehr case,   has defines a mathematical algorithm as a "procedure for solving a given type of mathematical problem." The Board of Patent Appeals and Interferences has further explained this concept stating that “a claim should be considered as reciting a mathematical algorithm only if it essentially recites, directly or indirectly, a method of computing one or more numbers from a different set of numbers by performing a series of mathematical calculations. Those who reject software patent protection argues, if patents issued on fundamental concepts that involves an abstract idea, or an algorithm then it will be effectively preempting all subsequent inventors from gaining access to the public domain. Moreover, software's novelty and utility generally reside in its algorithm, not in its physical structure, therefore, software are not worthy of patent protection.

They also argued that, Patents on intangible software innovations, which lack physical features and tangible structural elements, may restrict information processing sequences and related intellectual processes, software patent discourages Research and Development (R&D); after software patents were becoming widely accepted, R&D investments actually declined in firms that engaged in software development when instead they should have been rising as a result of the increased patenting of software. There is also argument against software patent for the reason that software can simply be protected under other forms of intellectual property such as copyright law.

IV. Does the Exclusion of Software Patent affect other Fields of Technology?

The development of computers as well as computer programs in the last few decades has led to the existence of multinational software companies and, the software industry has emerged as one of the most important sectors of the economy. The growth of the Internet as an established personal communications and commercial medium has fueled the integration of software into nearly every aspect of modern life. Especially, in the developed and developing countries, that constitute the highest share of world’s economy, it is difficult to find an economic sector that is not affected by the development of the software industry.

The writer of this paper strongly believes that the intellectual property regime has a significant role for the success of the software industry as an input for the development of countries economy in general. The existence of patent rights provides a variety of social benefits; patents can provide incentives to invest in innovation and develop more useful software programs, and promote investment in research and development. It can also facilitate trading in technology and financing start-up firms. Not only these, the disclosure of technical knowledge in the patent specification can help spread knowledge.

For the reasons mentioned above, any discrimination of software from the patent protection will likely discourage the software developers, for lack of economic incentives. It also negatively affects research and development, because, if every software invention is available in the public domain, who cares to “reinvent the wheel?”, so that the research and development fund will significantly decrease. As a result, the contribution of the software development for the other fields of technology will significantly decline.

V. Conclusion

Under the Anglo- American legal system the intellectual property right is justified based on the utilitarian theory, as opposed to the natural rights theory and theory of Personhood. Utilitarianism recognizes property insofar as it promotes society’s goals of utility or “wealth maximization.”  And the United States has adopted this theory in the constitution when it sets the “promotion and progress of science and the useful arts,” as the main purpose of the patent law.

Both natural rights theory and utilitarian theory is consequentialist. While the natural rights consider patent protection as an incentive for one’s labor, utilitarian theory considers the end of intellectual property (software patent, in specific case) to be incentivizing the inventor to make more things, so that the general public can benefit. Despite these two views Personhood theory attaches one’s invention with his or her personality. The development of software industry as supported by the patent regime is hugely backing up and facilitating the world’s economy, so that, discriminating software from the patent protection will highly affect the other fields of technology.