Letter to Editor of BW

["Jim Bessen" <jbessen@researchoninnovation.org>]

Dear Editor,

Andy Reinhardt says he wants to turn down the rhetoric regarding software
patents [Commentary, December 22, 2003]. Unfortunately, his own commentary
seems to have absorbed several rhetorical misconceptions:

1. The European Parliament did NOT vote to "ban software patents," rather it
simply re-affirmed the historical prohibition on patenting abstract ideas
and mathematical algorithms (which some European patent examiners had been
lax in enforcing). Patents can still be obtained on inventions that use
software when they relate to innovative industrial processes or products.

2. The move in Europe is NOT about an "industry-specific or
technology-specific exemption." Patents have historically been limited to
industrial products and processes in Europe and the US, too. So it is not
about exempting something that was once included.

Instead, the lobbying concerns an attempt to expand the patent system, as
the original proposal before the European Parliament did. In the US, courts
have expanded the scope of patents to include software, business methods,
genes, plants, surgical techniques, sports techniques and even methods of
cutting hair and swinging on a backyard swing. Yet once "post-industrial"
patents are allowed on abstract algorithms, it is difficult to exclude many
of these things and it is also difficult to maintain high standards. Once
pure software algorithms can be patented, so too can, say, business
processes--they just have to be described as algorithms.

3. Reinhardt asserts that the move by the European Parliament will "hobble a
host of vital European and global industries" because their products include
software. Really? The software industry has long maintained high levels of
innovation without patents on software. Why should this be a problem to
other industries?

The only clear reason these industries might be hobbled is
that the playing field in the US is now heavily tilted to those large
companies that have acquired thousands of trivial software patents. But
extending this practice to Europe, while it may allow some large European
companies to build patent thickets to keep small companies at bay, hardly
seems to be the best policy.

4. Reinhardt dismisses economics research by lumping economists with an army
of "left-leaning politicians and programmers." Cut us a break. Empirical
economics research has some relevance. Studies suggests that US software
patents have served to lower patenting standards and to promote unhealthy
"patent
thickets." Also, the firms that acquired relatively more software patents
have actually reduced their R&D investment. So it is hardly clear that an
expansion of patents to
include pure software was healthy here or will be healthy in Europe.

If Mr. Reinhardt really wants to cut the rhetoric, he might start by
reading the research.


========================================
James Bessen
MIT Sloan School of Management, Visiting Scholar,
Research on Innovation, Director
jbessen@researchoninnovation.org