Patent Article by William S. Ramsey, P.C.

SOFTWARE PATENTS

Software is a hot subject among patent attorneys and agents. Microsoft is said to be filing patent applications at a rate of 300 per year. Rumors abound concerning patents which claim features common to "all" programs and which will paralyze the software industry. Can this be true?

The protection of software by intellectual property laws has a short history. It became an issue in 1969 when a market for unbundled software developed. During the 1970's a few software copyrights and patents were issued in an atmosphere of uncertainty and confusion. In 1980 Congress amended the Copyright Act of 1976 to cover software, thus reducing the uncertainty by clearly providing for copyright protection. In 1981 the Supreme Court made the first decision supportive of software patenting in some cases. The present legal climate allows patenting of nearly all software.

Traditionally, software companies have relied exclusively on copyright to protect their software. Copyright protects software against the sale of exact copies and copies substantially similar to the copyrighted software. Copyright, however, does not protect against independent creation. This leads to the following scenario: Little Inc. creates and markets a successful program which, let’s say, "goes from A to Z without going through K." The manager of Big Inc., also a software producer, tells his chief programmer "It is possible to go from A to Z without going through K. I want a program that does it." Big’s programmers, then, without seeing Little’s product, independently create a program which does the same thing as does Little’s program. Big has the ability to give its product the advertising and promotion it deserves and the program becomes a major seller. Little’s product is forgotten.

If the essential components of Little’s program been patented, Big would not have been able to make off with the market. Patents provide software with protection which goes beyond that of copyright. A program which falls within the claims of a patented program would infringe the patent, regardless of whether the program was copied or not.

A software patent must meet the requirements of all patents, that of novelty, utility, and unobviousness to one skilled in the art. It is particularly important that software (like every invention) not be published or otherwise made public more than one year before filing the U.S. patent application. In order to obtain foreign patents, the invention must not be made public at all before filing the U.S. application.

Since it takes some 18 months and $5,000 to $10,000 in fees to get a software patent, such protection should be considered only for programs with a good chance of a long commercial life. In the past, software patents have covered processes for doing something with a computer. Currently claims also may be couched in terms of a computer having a program which causes the computer to do certain things. Finally, software also may be claimed as an article of manufacture. An example would be a piece of computer media such as a floppy disk which has a certain program encoded on it. A conservative patent attorney or agent will draft claims to the software in as many different forms as possible.

A variety of software patents have issued. They include a patented program which allows the use of a mixture of different fonts in a single document. Another patented program adds scientific and mathematical equation editing to a word processing program. An interactive CD-ROM search system which allows access with equal ease to graphics and text has been patented. This patent has caused considerable concern in the multi-media industry. As a final example, a brokerage/cash management system has been patented and assigned to Merrill Lynch.

The patent and copyright systems find their origins in the Constitution, where the Founding Fathers expressed a desire to encourage writing and inventing. As an experiment in social engineering, these systems appear to have functioned well over the years, despite periodic outcries that they stifle innovation in particular industries. Now we have the software industry, which seems to run on innovation. Will patents covering fundamental aspects of software stem this flood of programming? Or will ingenious programmers respond to the legal monopoly of patents with an outburst of originality dwarfing that seen to date? The answer remains to be seen.

William S. Ramsey 410-740-2225

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