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Why Patents Are Bad for Software

SIMSON L. GARFINKEL

RICHARD M. STALLMAN

MITCHELL KAPOR

From Issues in Science and Technology, Fall 1991:

Patents can't protect or invigorate the computer software

industry; they can only cripple it.

In September 1990, users of the popular XyWrite word processing

program got a disturbing letter in the mail from XyQuest, Inc., the

program's publisher:

"In June of 1987, we introduced an automatic correction and

abbreviation expansion feature in XyWrite III Plus. Unbeknownst to us,

a patent application for a related capability had been filed in 1984

and was subsequently granted in 1988. The company holding the patent

contacted us in late 1989 and apprised us of the existence of their

patent.

We have decided to modify XyWrite III Plus so that it cannot be

construed as infringing. The newest version of XyWrite III Plus (3.56)

incorporates two significant changes that address this issue: You will

no longer be able to automatically correct common spelling errors by

pressing the space bar after the misspelled word. In addition, to

expand abbreviations stored in your personal dictionary, you will have

to press control-R or another designated hot key."

XyQuest had been bitten by a software patent--one of the more than

two thousand patents on computer algorithms and software techniques

that have been granted by the U.S. Patent and Trademark Office since

the mid-1980s. The owner of the patent, Productivity Software, had

given XyQuest a choice: license the patent or take a popular feature

out of XyWrite, XyQuest's flagship product. If XyQuest refused, a

costly patent-infringement lawsuit was sure to follow.

Some choice.

XyQuest tried to license the patent, says Jim Adelson, vice

president for marketing, but Productivity Software kept changing its

terms. First Productivity said that XyQuest could keep the feature in

some versions of XyWrite, but not in others. Then the company said

that XyQuest could use one part of the "invention," but not other

parts. And Productivity Software kept increasing the amount of money

it wanted. XyQuest finally gave up and took the feature out.

XyQuest was lucky it had that option. Other firms--including some of

the nation's largest and most profitable software publishers--have

been served with notice of patents that strike to the heart of their

corporate vitality. In one of the most publicized cases, a company

called Refac International--whose sole business is acquiring and

litigating patents--sued Lotus, Microsoft, Ashton-Tate, and three

other spreadsheet publishers, claiming they had all infringed on

patent number 4,398,249, which spells out the order in which to

recalculate the values in a complicated model when one parameter in

the model changes. (Refac has since dropped its claims against all the

companies except Lotus, but only because company lawyers anticipated a

better chance of success if they faced just one opponent.)

Patent 4,398,249 does not have anything to do with spreadsheets in

particular; the technique also appears in some graphics drawing and

artificial intelligence programs. And the idea that values in a

spreadsheet should be recalculated in the order specified by the

patent is so obvious that it has probably occurred to nearly everyone

who has written a spreadsheet program. But the Patent Office's

standard for obviousness is extremely low; patents have been granted

for ideas so elementary that they could have been answers to problems

in a first-year programming course.

Practically once a month, the nation's computer networks are abuzz

with news of another patent issued on a fundamental concept that is

widely used. Although the Patent Office isn't supposed to grant

patents on ideas, that's essentially what it's doing with software

patents, carving up the intellectual domain of computer science and

handing little pieces to virtually any company that files an

application. And the practice is devastating America's software

industry.

If Congress does not act quickly to redefine the applicability of

patent law to computer programs, the legal minefield confronting the

introduction of new computer programs will be so intimidating--and

potentially so costly--that small companies will effectively be barred

from the marketplace, while large, established firms will become

embroiled in litigation that will have a stultifying effect on the

entire industry.

What's being patented?

Software patents do not cover entire programs; instead, they cover

algorithms and techniques--the instructions that tell a computer how

to carry out a specific task in a program. Thousands of instructions

make up any one computer program. But whereas the unique combination

of algorithms and techniques in a program is considered an

"expression" (like a book or a song) and is covered by copyright law,

the algorithms and techniques themselves are treated as procedures

eligible for patenting.

The judicial basis for this eligibility is tenuous at best. U.S. law

does not allow inventors, no matter how brilliant they are, to patent

the laws of nature, and in two Supreme Court cases

(Gottschalk v. Benson, 1972, and

Parker v. Flook, 1978) the Court extended this

principle to computer algorithms and software techniques. But in the

1981 case Diamond v. Diehr, the Court said

that a patent could be granted for an industrial process that was

controlled by certain computer algorithms, and the Patent Office seems

to have taken that decision as a green light on the patentability of

algorithms and techniques in general.

Software patents are now being granted at an alarming rate--by some

counts, more than a thousand are issued each year. Unfortunately, most

of the patents have about as much cleverness and originality as a

recipe for boiled rice--simple in itself but a vital part of many

sophisticated dishes. Many cover very small and specific algorithms or

techniques that are used in a wide variety of programs. Frequently the

"inventions" mentioned in a patent application have been independently

formulated and are already in use by other programmers when the

application is filed.

When the Patent Office grants a patent on an algorithm or technique,

it is telling programmers that they may not use a particular method

for solving a problem without the permission of the idea's "owner." To

them, patenting an algorithm or technique is like patenting a series

of musical notes or a chord progression, then forcing composers to

purchase a "musical sequence license."

Systems at odds

The traditional rationale for patents is that protection of inventions

will spur innovation and aid in the dissemination of information about

technical advances. By prohibiting others from copying an invention,

patents allow inventors to recoup their investment in development

while at the same time revealing the workings of the new invention to

the public.

But there's evidence that the patent system is backfiring in the

computer industry; indeed, the system itself seems unsuited to the

nature of software development. Today's computer programs are so

complex that they contain literally thousands of algorithms and

techniques, each considered patentable by the Patent Office's

standards. Is it reasonable to expect a software company to license

each of those patents, or even to bring such a legally risky product

into the marketplace? To make things even more complicated, the Patent

Office has also granted patents on combinations of algorithms and

techniques that produce a particular feature. For example, Apple was

sued because its Hypercard program allegedly violates patent number

4,736,308, which covers a specific technique that, in simplified

terms, entails scrolling through a database displaying selected parts

of each line of text. Separately, the scrolling and display functions

are ubiquitous fixtures of computer programming, but combining them

without a license from the holder of patent 4,736,308 is now

apparently illegal.

Another problem with patenting software is the amount of time it

takes to do so. The two to five years required to file for and obtain

a patent are acceptable if a company is patenting, say, the formula

for Valium, which hasn't changed in more than 20 years. But in the

software industry, companies that don't continually bring out new

versions of their programs go out of business. Success for them

depends on spotting needs and developing solutions as quickly as

possible.

Unfortunately, conducting a patent search is a slow, deliberative

process that, when harnessed to software development, could stop

innovation in its tracks. And because patent applications are

confidential, there is simply no way for computer programmers to

ensure that what they write will not violate some patent that is yet

to be issued. Thus XyQuest "reinvented" its automatic spelling-error

correction system and brought the product to market between the time

that Productivity Software had filed for its application and been

awarded the patent.

Such examples are becoming increasingly common. In another case, the

journal IEEE Computer in June 1984 published a

highly efficient algorithm for performing data compression;

unbeknownst to the journal's editors or readers, the authors of the

article had simultaneously applied for a patent on their invention. In

the following year, numerous programs were written and widely

distributed for performing the so-called "LZW data compression." The

compression system was even adopted as a national standard and

proposed as an international one. Then, in 1985, the Patent Office

awarded patent number 4,558,302 to one of the authors of the article.

Now Unisys, the holder of the patent, is demanding royalties for the

use of the algorithm. Although programs incorporating the algorithm

are still in the public domain, using these programs means risking a

lawsuit.

Not only is the patent approval process slow, but the search for

"prior art"--the criterion the Patent Office uses to determine whether

an invention already exists at the time of a patent application--is

all but impossible to conduct in the realm of computer software. After

more than 25 years, the Patent Office has not developed a system for

classifying patents on algorithms and techniques, and no such system

may be workable. Just as mathematicians are sometimes unaware that

essentially identical mental processes are being used in separate

areas of mathematics under different terminology, different parts of

computer science frequently reinvent the same algorithm to serve

different purposes. It is unreasonable to expect that a patent

examiner, pressed for time, would recognize all such duplication. For

example, IBM was issued a patent on the same data-compression

algorithm that Unisys supposedly owns. The Patent Office was probably

not aware of granting two patents for the same algorithm because the

descriptions in the patents themselves are quite different even though

the formulas are mathematically equivalent.

The search for prior art is complicated by the fact that the

literature of computer science is unbelievably large. It contains not

only academic journals, but also users' manuals, published source

code, and popular accounts in magazines for computer enthusiasts.

Whereas a team of chemists working at a major university might

produce 20 or 30 pages of published material per year, a single

programmer might easily produce a hundred times that much. The

situation becomes even more complex in the case of patented

combinations of algorithms and techniques. Programmers often publish

new algorithms and techniques, but they almost never publish new ways

of combining old ones. Although individual algorithms and techniques

have been combined in many different ways in the past, there's no good

way to establish that history.

The inability to search the literature thoroughly for prior art is

crucial, because unless an examiner can find prior art, he or she is

all but obligated to issue the patent. As a result, many patents have

been granted--and successfully defended in court--that are not

"original," even by the Patent Office's definition. It was simply the

case that neither the patent examiner nor the defendants in the

lawsuit knew of the prior art's existence.

Some members of the commercial software community are now proposing

the creation of a "Software Patent Institute" to identify software's

prior art that existed before 1980. But even if such an institute

could catalogue every discovery made by every programmer in the United

States, it makes no sense to arbitrarily declare that only pre-1980

work is in the public domain. Besides, what would be the purpose? To

allow the patenting of nature's mathematical laws?

Bad for business

Even when patents are known in advance,

software publishers have generally not licensed the algorithms or

techniques; instead, they try to rewrite their programs to avoid using

the particular procedure that the patent describes. Sometimes this

isn't possible, in which case companies have often chosen to avoid

implementing new features altogether. It seems clear from the evidence

of the last few years that software patents are actually

preventing the adoption of new technology,

rather than encouraging it.

And they don't seem to be encouraging innovation, either. Software

patents pose a special danger to small companies, which often form the

vanguard of software development but can't afford the cost of patent

searches or litigation. The programming of a new product can cost a

few hundred thousand dollars; the cost of a patent search for each

technique and combination of techniques that the new program uses

could easily equal or even exceed that. And the cost of a single

patent suit can be more than a million dollars.

"I'm not familiar with any type of ligation that is any more costly

than patent litigation," says R. Duff Thompson, vice president and

general counsel of the WordPerfect Corporation. But Thompson's

greatest fear is that software patents will wipe out young,

independent programmers, who until now have been the software

industry's source of inspiration. Imagine what happens, says Thompson,

when "some 23-year-old kid who has a terrific idea in a piece of

software is hammered by a demand letter from someone holding a

patent."

As for aiding the exchange of information, the expansion of software

patents could mean instead the end of software developed at

universities and distributed without charge--software that has been a

mainstay of computer users in universities, corporations, and

government for years. Many such programs--the X Window system, the

EMACS text editor, the "compress" file-compression utility, and

others--appear to be in violation of existing patents. Patents could

also mean an end to public-domain software, which has played an

important part in making computers affordable to public schools. There

is obviously no way that an author who distributes a program for free

could arrange to pay for royalties if one of the hundreds of

techniques that were combined to create the program happens to be

patented.

Few programmers and entrepreneurs believe that patents are necessary

for their profession. Instead, the impetus for patents on algorithms

and techniques comes from two outside sources: managers of large

companies, who see patents as a means for triumphing over their

competitors without having to develop superior products, and patent

attorneys, who see the potential for greatly expanding their business.

Today, most patenting by companies is done to have something to

trade or as a defense against other patent-infringement suits.

Attorneys advise that patenting software may strengthen competitive

position. Although this approach will work for large companies such as

Microsoft, Apple, and IBM, small and even mid-sized companies can't

play in their league. A future startup will be forced to pay whatever

price the giants choose to impose.

The best argument against the wisdom of software patents may be

history itself. Lotus, Microsoft, WordPerfect, and Novell all became

world leaders in the software publishing industry on the strength of

their products. None of these companies needed patents to secure

funding or maintain their market position. Indeed, all made their

fortunes before the current explosion of software patents began.

Clearly patents are not necessary to ensure the development of

computer programs. And for those who want more control over what they

see as their property, the computer industry has already adopted two

other systems: copyright and trade secrecy.

Today, nearly all programs are copyrighted. Copyright prohibits the

users of a software program from making copies of it (for example, to

give to their friends) without the permission of the individual or

company that licenses the program. It prevents one company from

appropriating another company's work and selling it as its own. But

the existence of a copyright doesn't prevent other programmers from

using algorithms or techniques contained in the program in their own

work. A single software technique can be implemented in different ways

to do totally different jobs; copyright only prohibits appropriating

the actual code that a particular programmer wrote.

In general, copyrighting and patenting are thought to apply to very

different kinds of material: the former to the expression of ideas,

and the latter to a process that achieves a certain result. Until just

a few years ago, computer algorithms and techniques were widely seen

as unpatentable. And as Harvard University policy analyst Brian Kahin

notes, this is the first time in history that an industry in which

Indeed, without conscious action by Congress or the Supreme Court,

the most fundamental rule of software publishing--if you write a

program, you own it--will change. The new rule will be that you might

own what you write--if it is so revolutionary that it owes nothing to

any previous work. No author in areas other than software is held to

such an unrealistically high standard.

The U.S. patent system was created because the framers of the

Constitution hoped that patents would discourage trade secrecy. When

techniques are kept secret for commercial advantage, they may never

become available for others to use and may even be lost. But although

trade secrecy is a problem for software, as it is for other fields, it

is not a problem that patents help to correct.

Many of the useful developments in the field of software consist of

new features such as the automatic correction and abbreviation

expansion feature in XyWrite III Plus. Since it is impossible to keep

a program's features secret from the users of the program, there is

no possibility of trade secrecy and thus no need for measures to

discourage it. Techniques used internally in a software system can be

kept secret; but in the past, the important ones rarely were. It was

normal for computer scientists in the commercial as well as the

academic world to publish their discoveries. Once again, since secrecy

about techniques was not a significant problem, there is little to be

gained by adopting the patent system to discourage it.

The place where trade secrecy is used

extensively in software is in the "source code" for programs. In

computer programming, trade secrets are kept by distributing programs

in "machine code," the virtually indecipherable translation of

programming languages that computers read. It is extremely difficult

for another programmer to glean from a machine-code program the

original steps written by the program's author. But software patents

haven't done anything to limit this form of trade secrecy. By

withholding the source code, companies keep secret not a particular

technique, but the way that they have combined dozens of techniques to

produce a design for a complete system. Patenting the whole design is

impractical and ineffective. Even companies that have software patents

still distribute programs in machine code only. Thus, in no area do

software patents significantly reduce trade secrecy.

Reversing direction

Many policymakers assume that any increase in intellectual property

protection must be good for whoever works in the field. As we've tried

to show, this is assuredly not the case in the field of computer

programming. Nearly all programmers view patents as an unwelcome

intrusion, limiting both their ability to do their work and their

freedom of expression.

At this point, so many patents have been issued by the Patent and

Trademark Office that the prospect of overturning them by finding

prior art, one at a time, is almost unthinkable. Even if the Patent

Office learns to understand software better in the future, the

mistakes that are being made now will follow the industry into the

next century unless there is a dramatic turnaround in policy.

The U.S. Patent and Trademark Office recently established an

Advisory Commission on Patent Law Reform that is charged with

examining a number of issues, including software patents--or what it

prefers to call patents on "computer-program-related inventions."

Unfortunately, the commission's subcommittee on software does not

include any prominent software industry representatives who have

expressed doubts about software patents. But the subcommittee is

required to consider public comment. The commission's final report is

not due until August 1992, so there is still time to make one's voice

heard.

Although influencing the Patent Office might produce some benefits,

the really necessary reforms are likely to come only through

intervention by the Supreme Court or Congress. Waiting for Court

action is not the answer: No one can force the Supreme Court to rule

on a relevant case, and there is no guarantee that the Court would

decide to change Patent Office practice or to do anything about

existing patents. The most effective course of action, therefore, is

to encourage Congress to amend the patent law to disallow software

patents and, if possible, invalidate those that have already been

awarded. The House Subcommittee on Intellectual Property and the

Administration of Justice, chaired by Representative William J. Hughes

(D-N.J.), should take the lead by scheduling hearings on the subject

and calling for a congressionally sponsored economic analysis of the

effect of software patents on the industry.

The computer industry grew to be vibrant and healthy without

patents. Unless those who want software patents can demonstrate that

they are necessary to the health of the industry, Congress should feel

justified in eliminating this barrier to innovation.