A couple of months ago I wrote an article on software patents for National Review. An attorney named Michael Rosen has responded at The American, AEI's online magazine.
He makes a number of points, some of which are head-scratchers (he seems to think it's contradictory for me to claim that both large companies and patent trolls are abusing the system, for example) but I want to focus on this point about small entrepreneurs:
With respect to the personalized nature of software, precisely because “software development is an individual, creative activity,” we should take great pains to protect the inventive effort that flows from such activity. As the emergence in recent years of an entirely new market in mobile computing applications has shown, there are virtually no barriers to entry in the software field. Any Tom, Dick, or Harry can develop the next Angry Birds, and we should encourage such innovation by ensuring that developers can protect their inventions.
On one level this just begs the question. Obviously, if software patents promote innovation, that's a strong argument for allowing them. But if software patents actually discorage innovation, as I and people who've crunched the numbers have argued they do, then people who care about entrepreneurial innovation should be equally anxious to get rid of them. Rosen doesn't really engage in the arguments that I and others have offered that software patents are bad for innovation. He seems to just take it as a given that patents promote innovation.
But since Rosen brought up Angry Birds, I'd like to zoom in on the specific case of mobile apps. Too often, the patent debate occurs in broad abstractions, so it's important to pay attention to the actual innovators being harmed by software patents.
So let's talk about Lodsys, a patent troll (with alleged ties to uber-troll Intellectual Ventures) that began suing independent mobile app developers for patent infringement earlier this year. Lodsys's holds broad patents related to the purchase of digital content over a network, and claims dozens of firms have infringed its patents. Few if any of the defendants in these cases copied from the Lodsys patents, but they (allegedly) stumbled across the broad concepts in the patents and are now facing the threat of a lawsuit.
A small firm threatened with patent litigation has little choice but to settle, because the cost of defending against such a lawsuit (or trying to get the patent invalidated under the recently-created "post-grant review" process) could easily bankrupt a three-person startup. As a result, the patent system is transferring resources from guys trying to create the next Angry Birds and to patent lawyers who are creating no value.
But maybe this licensing revenue is rewarding a worthy inventor? The inventor of Lodsys's four patents is a consultant named Dan Abelow with a background in economics. If Abelow has ever produced any useful products or services, that fact isn't evident from his Lodsys bio and his website.
The point is precisely that we want to ensure that there continue to be "virtually no barriers to entry" for the next generation of software inventors, so that "any Tom, Dick, or Harry" has the opportunity to create the next generation of innovative software. If Tom, Dick, and Harry are forced to lawyer up to defend themselves from patent lawsuits, that's a barrier to entry. And the only way to avoid creating this barrier to entry is by excluding software from patentability so that Tom, Dick, and Harry can be sure their software isn't infringing anyone's patents.
