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Patents are used by companies to protect new technology they have invested resources to invent.

To the dismay of some software hobbyists, since the mid-90's software can be patented. The reason is simple - software is machinery (albeit not physical machine form, but very similar to gears and spokes and ball bearings etc...). Paul Graham points out:

One thing I do feel pretty certain of is that if you're against software patents, you're against patents in general. Gradually our machines consist more and more of software. Things that used to be done with levers and cams and gears are now done with loops and trees and closures. There's nothing special about physical embodiments of control systems that should make them patentable, and the software equivalent not.

Unfortunately, patent law is inconsistent on this point. Patent law in most countries says that algorithms aren't patentable. This rule is left over from a time when "algorithm" meant something like the Sieve of Eratosthenes. In 1800, people could not see as readily as we can that a great many patents on mechanical objects were really patents on the algorithms they embodied.

Patent lawyers still have to pretend that's what they're doing when they patent algorithms. You must not use the word "algorithm" in the title of a patent application, just as you must not use the word "essays" in the title of a book. If you want to patent an algorithm, you have to frame it as a computer system executing that algorithm. Then it's mechanical; phew. The default euphemism for algorithm is "system and method." Try a patent search for that phrase and see how many results you get.

Since software patents are no different from hardware patents, people who say "software patents are evil" are saying simply "patents are evil." So why do so many people complain about software patents specifically?

Indeed, this reversal on software patents arose because the smartest patent lawyers were simply wrapping software patents up in hardware and patenting that - hence the realization that software patents have validity.

Technological advancements are often obvious in hindsight - all of the effort and resources expended to arrive at the technological advancement are difficult to comprehend. Unlike other scientific fields, software advancements often provide very little barriers to entry. Often a working copy of the software is shipped to another country where salaries are much lower and instructed to provide a working clone of the software that can be resold on markets. Entrenched software companies largest assets are their 1) brand, 2) existing customers that are easy pickings to upgrade.

Close to 200,000 software patents have been granted by the U.S. Patent and Trademark Office.

Martin Goetz succinctly points out in In Defense of Software Patents the business reasons behind needing patents:

Many software products are state-of-the-art products developed in a very competitive, fast moving environment and require rapid response to meet user demand. Secondly, a great deal of capital is often required and many software companies are funded through private investments, venture capital, and through public offerings. Thirdly, there are active research and development activities within these companies. IBM, as an example has reported that it consistently spends well over one billion dollars in research and development specifically in the software area. Lastly, highly skilled personnel are employed in these companies and many have advanced Computer Science college degrees, including PhDs. And because of its complexity, many software products are built using software engineering disciplines.

As well, Mark Blaxill and Ralph Eckardt describe what intellectual property is:

we want to make it clear that intellectual property is just that: property, albeit property that you can't necessarily hold or touch. The thing to remember about IP is that it celebrates creativity and inventiveness, whether that's expressed by penning the great American novel or by gluing together the world's first integrated circuit. Without a property right attached to it, the design for, say, a new portable music player couldn't be controlled by its inventor, regardless of the time or expense they invested in that design. Anyone who wanted to could come along and copy it. As you can imagine, very few people would invest in complex innovation projects (think books, movies, art, software, a drug, a new cell phone, etc.) if others could simply copy the idea at will. To solve this problem, governments grant property rights in creative works, and together these rights are known as intellectual property rights.

"American invents everything, but the trouble is we get tired of it the minute the new is wore off" - Will Rogers

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