Patent Law

Shiver

By Gary Odom and Jordan Kuhn

"Abstract software code is an idea without physical embodiment." So opined the Supreme Court in Microsoft v. AT&T, 2007. The high courts in recent years have done what they could to denigrate software as unpatentable, most recently in a stunningly incoherent ruling at the CAFC In re Bilski. This is the result of both scientific and economic ignorance by the courts, and political brainwash by computer software corporations in this country, including, incredibly, Microsoft and Apple. As emergent Asian nations race to overtake the U.S. in every technological arena, the heavy patent action here is cutting off our leading-edge nose to spite our face.

The Economist (December 30, 2008):

To see the geography of the technology industry, crack open an Apple iPhone. Although the firm that sells it is American, it provides none of the physical innards. The components are almost entirely Asian: the screen is mostly from Japan, the flash memory from South Korea, and it was assembled in China. Apple's contribution is the design and software.

The biggest and most technically clever firms are American and European, but their predominance in research, innovation and production is being challenged by Asian companies.

While corporate R&D in America and Europe grew by 1-2% between 2001 and 2006, in China it soared 23%. China is now close to surpassing Japan in total research spending, from almost nothing a decade ago.

The most impressive growth has been in South Korea. In 2007 Samsung spent more on R&D than IBM. The company has jumped to second place in the number of patents granted by America's patent office (just behind IBM); a decade earlier it was not even in the top ten. South Korean firms spend more on R&D as a percentage of sales (6.5%) than European and Japanese firms (around 5%), and are catching up with American ones (about 8%). South Korea now has more high-tech researchers than Britain and Germany.

The starkest shifts are in computer services and manufacturing, where the roles of America and East Asia have diverged dramatically. The amount that American firms spend on research in computer services as much as trebled over the past decade. Japanese and South Korean firms, meanwhile, spend hardly anything developing services, and prefer to concentrate on more tangible, if less lucrative, hardware.

In 2003, Microsoft got patent religion and began a vigorous licensing campaign that has brought in over a billion dollars in the past five years. Given their revenues, it may resemble chump change, but it represents their crown jewels: software inventions. This past year, Microsoft finally rattled its patent saber, shivering the Linux penguin.

If software processes are not patentable, American software innovations are readily replicated. Without software patents, what prevents Chinasoft from replacing Microsoft?

Full post as published by The Patent Prospector on January 03, 2009 (boomark / email).