Today’s Software Patents Look a Lot Like Early Pharma Patents

Adam Mossoff —  16 October 2012

The recent New York Times article on the high-tech industry argues that software patents and the current “smart phone war” are a disaster for innovation, and it backs this with quotes and cites from a horde of academics and judges, like Judge Richard Posner, that software patents are causing “chaos.”

Judge Posner in particular has been on a tear lately attacking software patents and the current litigation between high-tech companies. In his most recent blog posting, he argues that software patents are inefficient and thus improper because of

a shortage of patent examiners with the requisite technical skills, the limited technical competence of judges and jurors, the difficulty of assessing damages for infringement of a component rather than a complete product, and the instability of the software industry because of its technological dynamism.

In contrast to the software industry, Judge Posner and some academics love to cite the pharmaceutical industry as the one industry in which the patent system works. The New York Times article repeats these claims without question.

But this observation about pharma patents is surprisingly bereft of the facts of how the patent system was first extended to biochemical discoveries.

Here’s just one prominent and well-known example: In 1912, the brilliant Judge Learned Hand, one of Judge Posner’s jurisprudential heroes, complained of his lack of technical expertise in deciding the new biochemical patents that would in a few decades give birth to the modern pharmaceutical industry. In his famous opinion in Parke-Davis & Co. v. H.K. Mulford & Co., Judge Hand called “attention to the extraordinary condition of the law which makes it possible for a man without any knowledge of even the rudiments of chemistry to pass upon such questions as these. The inordinate expense of time is the least of the resulting evils, for only a trained chemist is really capable of passing upon such facts.” Judge Hand bemoaned the “confusion the intricacy of the subject-matter causes” and that judges like him were “blindly groping among testimony upon matters wholly out of their ken.”

This 100-year-old complaint by Judge Hand is eerily similar to Judge Posner’s and others’ complaints today about the inherent problems with the new patents on smart phones, on software and on other aspects of the digital revolution. 

Yet, unlike Judge Posner, who undertook the decidedly unSolomonic part in cutting the baby in half in his decision in Apple v. Motorola, Judge Hand definitely decided the issue of patent infringement put before him in Parke-Davis, just as judges did in the century before in ruling on the equally difficult, confusing, cutting-edge patented innovation of their day in vulcanized rubber, sewing machines, the telegraph, among many others.

Because patent-owners were given clear legal guidance by judges like Learned Hand, despite his protestations of ignorance, inventors and the firms that commercialized their inventive work-product knew what was needed to obtain and enforce their patents.  Thus, the 1930s witnessed the birth of modern pharmaceutical industry with patented innovation in sulfa and antibiotics. Repeating this pattern after the Supreme Court’s split decision in 1980 in Diamond v. Chakrabarty, which upheld patenting in genetically modified organisms, the pharmaceutical industry experienced a renaissance in the 1980s and 1990s with patented innovation in biotech. 

Unfortunately, the complaints today about software patents arise more from intuitions, from unrealistic assumptions about how much certainty we can achieve in the patent system, and from emotionally-compelling anecdotes about innovators running into trouble with patents — like the ones that dominate the New York Times article. It’s time to bring objectivity and a historical-based perspective to public policy discussions about software patents and the role of property rights in innovation.

5 responses to Today’s Software Patents Look a Lot Like Early Pharma Patents

  1. 
    Jonathan Perlow 16 October 2012 at 10:27 pm

    Adam, as a software engineer who worked at Microsoft, Google, and other top companies as well as the “inventor” of many software patents, I can confidently tell you that you have no clue what you’re talking about. Very few software patents amount to real invention or innovation. Almost all of them are minor incremental improvements that are generally obvious to anybody in the field. Software is an extremely incremental process and every piece of software written builds upon the ideas of thousands of product and programs that came before it. The software patent process does not increase innovation — it stifles it. If you talked to software engineers that worked at the most important tech companies (clearly you have not), they will all tell you the same thing. The best software engineers hate having to deal with lawyers and patent applications and they only file patent applications because of the pressure on tech companies to build defensive patent portfolios. The best software engineers rarely even understand the patent applications they are signing because they are written in a legal jargon that has little resemblance to the designs and programs that actually inspired the patents. The end result is a huge tax on innovation. Almost every software engineer I’ve ever talked to about this subject agrees that software patents should be abolished. The people who benefit from software patents are the lawyers and the patent trolls. The victims are the consumers who see much less innovation because of the toxic patent environment and pay higher prices to fund this gigantic tax on the innovation.

    • 
      Roger Zimmerman 21 October 2012 at 9:23 am

      And, yet, there _are_ some software-based inventions that are truly innovative. I have 10 patents (with 5 more applications in process), and I don’t put quotes around the word: invention. I wouldn’t have applied for these patents if I didn’t think they were genuine advances, no matter what my employer wanted from me. Indeed, I often said “no”, when the IP folks were prodding me to apply, if I didn’t think the innovation was clear enough.

      Now, my companies were certainly playing the defensive game, as you point out. And, in almost every case, the USPTO examiners were not well-trained enough in the specific area of art, nor did they have the tools, to determine with certainty how innovative these were. They issued some pro-forma objections based on rudimentary database searches and sometimes required claim narrowing – usually unjustified, in my view – before granting allowances. I should also point out that I have also had applications completely rejected, and rightfully so, based on earlier applications in process, which I did not know about at the time of filing. And, who knows, it may emerge from litigation that some of my patents were indeed anticipated by others.

      These – and yours – are all arguments for why any intellectual property protection regime run by humans will make mistakes, and possibly be inefficient in an economic utility sense. But, as Adam points out, this is NOT specific to software. “Incrementalism”, legal overhead, lack of expertise by government employees – these have always existed in all fields. If these are grounds for abolishing software patents, then virtually all patents should be abolished.

      So, the question becomes one of fundamentals: do individuals have rights in their intellectual property? If so, some IP protection scheme is a proper function of government. We should endeavor to improve it, to advocate for clarity and efficiency, to draw objective boundaries around its domain. But, to “abolish” protection for an arbitrary class of inventions, where some of those inventions are actually useful innovations, would be a violation of individual rights, and therefore wrong. Just because you and other software engineers (even if it’s “almost every” one you’ve spoken to on the subject) find the current protection regime to be inconvenient in your field does not invalidate these principles.

  2. 

    Also, isn’t Judge Posner’s first criticism (“…a shortage of patent examiners with the requisite technical skills”) less a fundamental problem with the patent system and more a technocratic one? That is, if this is in fact a problem that causes some deadweight loss in commercial activity, then the solution isn’t a substantive change in policy, but rather an increase in PTO funding (or some equivalent margin).

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