Information Technology Reference
In-Depth Information
Given the value of software patents, it's not surprising that a secondary market
for them has arisen. For example, when a company holding patents goes bankrupt,
its patents are sold to another company [117]. Some companies specialize in holding
patents and licensing the rights to use these patents. Patent-holding companies aggres-
sively use the courts to enforce their patent rights; these companies are sometimes re-
ferredtoas
patent trolls
. Because defending against a patent infringement lawsuit can
easily exceed a million dollars, companies that get sued have a strong motivation to sim-
ply settle out of court, putting patent trolls “in a position to negotiate licensing fees that
are grossly out of alignment with their contribution to the alleged infringer's product or
services” [118].
In 1992 inventor Thomas Campana and lawyer Donald Stout formed New Tech-
nologies Products (NTP), a patent-holding company. The purpose of the company was
never to make anything but to protect valuable intellectual property. About half of the
company's 50 patents were originally held by Telefind Corporation, which went out of
business. In 2000 NTP sent letters to several companies, warning them that they were in-
fringing on NTP wireless email patents and inviting them to negotiate licensing rights.
One of these letters went to Research In Motion (RIM), maker of the BlackBerry, but
RIM did not respond to the letter. The next year NTP sued RIM for patent infringe-
ment. Instead of settling out of court for a few million dollars, RIM took the case to trial
and lost. After more unsuccessful legal maneuvering, RIM in 2006 agreed to pay NTP
$612.5 million to settle the patent infringement dispute [119, 120].
Critics of software patents argue that too many software patents have been granted.
A problem faced by patent examiners in the Patent and Trademark Office is knowing
what the existing technical knowledge (prior art) in computer programming is. Patent
examiners typically look at patents already issued to determine prior art. This works
fine for other kinds of inventions, but it doesn't work well for software patents because
a significant amount of software was written before software patents were first granted.
The consequence is that patent examiners issue many “bad patents”—patents that would
not have been issued if the examiner knew about all of the prior art. The Patent Office
has also been criticized for granting patents for trivial inventions that would be obvious
to any skilled computer programmer.
As a consequence of the extremely large number of software patents, the large num-
ber of bad patents, and the number of obvious software inventions that are patented, any
company releasing a new product that includes software runs a significant risk of being
sued for infringing a software patent owned by someone else. Thousands of patent law-
suits are filed in the United States every year [121]. Large corporations are resorting to
building stockpiles of their own patents, so that if they are sued for infringing another
company's patent, they can retaliate with their own patent infringement countersuit.
The use of software patents as legal weapons is a perversion of their original purpose
[122].
Some opponents of the current software patent system maintain that patent pro-
tection is inappropriate for software, which is less expensive to produce and has a much
shorter useful life than other patentable properties, such as new pharmaceutical drugs.
Jeff Bezos, CEO of Amazon.com, has suggested that software patents should have a life
span of only three to five years [123].
