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Until a few years ago, if your invention involved a computer program it was considered
a mathematical algorithm, and thus a law of nature -therefore, not patentable.
(I suspect you did not know that you were the one writing Nature's laws...)
Numerous court cases involving computer-related patents have been tried over
the years. While not all the issues involved have been resolved, it is clear now
that mostsoftware that does something useful is patentable, at least in the United
States, and to varying extents in many other countries.
As a result, a large number of software companies awakened to the opportunity
to preserve the fruits of their labor. Large and small companies patent software
at a furious rate. For example, in the first three month of 1999, Microsoft received
over 75 patents for subjects ranging from methods for constructing formulas in
a spreadsheet to special search methods for document filtering, DTP, and others.
In the first six month of 2004, over 300 patents issued to Microsoft. This torrent
of software patents presents both an opportunity and danger to other software
companies that are unaware of this growing trend. For example, if you are using
a user modifiable popup menu in your program, it is possible that you are infringing
on IBM patent number 5,345,550. Have you created an information map on the fly?
Check out Microsoft patent 5,878,421. XML generation? Look up Microsoft's 6,675,353.
If you have no patents that are of value to the holder of a patent that is crucial
to your company, you may be in for a nasty surprise.
In general, pure mathematical algorithms are still not patentable. In State Street
Bank v Signature Financials, the court stated, "Unpatentable mathematical algorithms
are identifiable by showing that they are merely abstract ideas constituting disembodied
concepts or truths that are not "useful'. However, the court continued, "Today
we hold that the transformation of data representing discrete dollar amounts,
by a machine through a series of mathematical calculations into a final share
price, constitutes a practical application of a mathematical algorithm because
it produces a useful, concrete and tangible result - a final share price." Software
patentability therefore seems to be tied to practical utility.
The United States Patent and Trademark Office issued guidelines for examination
of computer related inventions. Those are available at the USPTO web site (www.uspto.gov).
The guidelines apply a series of tests used by patent examiners to determine the
patentability of an invention. While those guidelines do not have the power of
law, they show that in the US software is patentable.
In some other countries, software is still barred from patenting. Examples include
Russia, the Gulf Cooperation Council (Saudi Arabia, UAE and others), and others.
In the western world, however, there is a growing understanding that software
and computer related inventions deserve patent protection just like any other
useful technology.
When considering a patent application, the PTO examiner searches for similar
inventions. For that search, the examiner uses the patent database of the USPTO
as well as some international databases. It is clear to see, however, that if
software patents were only recently allowed, the database will have relatively
little content. In other fields, experienced examiners often bring out non-patent
documents that describe an invention. Since the PTO has only recently begun to
deal with software issues, most patent for the software field have limited experience
in either software or patent examination. While this is understandable, the result
is a large number of software patents, some of which should have never been issued.
Since a patent enjoys a presumption of validity in the courts, it is expensive
and a hard burden to invalidate a patent. This may give your opponent an unfair
advantage that may seriously hamper your business. If, however, you own a valid
patent that your opponent whishes to use, your bargaining position is tremendously
improved.
Software patents are here to stay. Ignoring them may be a dangerous and an expensive
exercise. On the other hand, using software patents may prove an excellent precaution
and a great investment.