Patenting Software: A View from Across the Pond
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- Milton Robinson
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1 Patenting Software: A View from Across the Pond Stuart Graham, JD, PhD Associate Professor Georgia Institute of Technology Innovation in the European Digital Single Market: The Role of Patents European Commission Brussels 17 March 2015
2 Software and technology development How does disembodied software fit into the developing technology landscape? How should policy makers understand software to make better policy choices? 2
3 Software Patent Policy in the US (1) Alice Corp. versus CLS Bank (US Supreme Court, 19 June 2014) At issue: Patent on computer implemented, electronic escrow service for facilitating financial transactions. Result: Claims were drawn to an abstract idea, and simply implementing on a computer was not sufficient to transform that idea to a patentable invention. 3
4 Software Patent Policy in the US (3) Issues US patent policy has been struggling with the patentability of computer implemented inventions for at least 40 years Supreme Court s CLS Bank decision has not clarified the situation Uncertainty is not ideal for investment Not entirely clear what such uncertainty / flexibility does to the technology development process 4
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6 Graham & Vishnubakhat (2013): Several Findings - Observations US smart phone patent litigation does not appear driven by low-quality software patents Software characteristic of a General Purpose Technology (Bresnahan and Trajtenberg, 1995) Wide adoption; pervasive; spawns cumulative invention Empirical evidence shows that USPTO treatment of software patent applications during the past decade compares favorably to those in other technology areas. 6
7 Graham & Vishnubakhat (2013): Several Findings - Observations US smart phone patent litigation does not appear driven by low-quality software patents Software characteristic of a General Purpose Technology (Bresnahan and Trajtenberg, 1995) Wide adoption; pervasive; spawns cumulative invention Empirical evidence shows that USPTO treatment of software patent applications during the past decade compares favorably to those in other technology areas. 7
8 Software patent classes Claims are showing up everywhere - electronics, automobiles, biotech For us researchers, Type I and Type II errors abound 8
9 Graham & Vishnubakhat (2013): Several Findings - Observations US smart phone patent litigation does not appear driven by low-quality software patents Software characteristic of a General Purpose Technology (Bresnahan and Trajtenberg, 1995) Wide adoption; pervasive; spawns cumulative invention Empirical evidence shows that USPTO treatment of software patent applications during the past decade compares favorably to those in other technology areas. 9
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14 Learning from startup companies TMTs of 1,332 U.S. young technology firms (<10 years), N=724 in software/internet sectors Among the D&B sample (N=535), 24.3% of software/internet firms are holding patents Among VC-funded sample (N=240), 68.6% of software/internet firms are holding patents. Even though all other means are available, and patenting is costly 14
15 VC-backed start-ups reported importance of patenting to competitive advantage X X Among software-internet start-ups selecting in to patenting: = 59.6% 26.5% 33.1% 33.1% 7.3% 15
16 VC-backed Software Start-ups CEOs & CTOs: Patenting to Avoid a Thicket of Patents? No. Top ranked reasons Not preventing infringement, not for cross licensing defense 16
17 VC-backed Software Start-ups CEOs & CTOs: Patenting to Avoid a Thicket of Patents? No. Top ranked reasons 78% Preventing copying 17
18 VC-backed Software Start-ups CEOs & CTOs: Patenting to Avoid a Thicket of Patents? No. Top ranked reasons 75% Securing investment 18
19 VC-backed Software Start-ups CEOs & CTOs: Patenting to Avoid a Thicket of Patents? No. Top ranked reasons 70% Improving chances of exit event (IPO, or acquisition) 19
20 VC-backed Software Start-ups CEOs & CTOs: Patenting to Avoid a Thicket of Patents? No. Top ranked reasons 70% Enhancing reputation 20
21 Concluding comments 21
22 Thank you 22
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