Mark Cuban wants to end patents on software and business methods

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Tech entrepreneur/Larry O’Brien trophy holder Mark Cuban is famously old-school when it comes to copyrights, probably because so much of his work has been in the creation or distribution of copyrighted material. But on Sunday he offered a much more circumscribed view of patents, making the case for eliminating patent protection for software and business methods.

The benefits, Cuban wrote, include lower court costs, a more efficient patent office and, most important, more corporate dollars spent on employees instead of lawyers:


The thing about patent litigation is that it is unlimited and unquantifiable. There is absolutely no way to look at your business and say ‘this is where and what my risk is.’ Because of software and process patents any company could be sued for almost anything. It is impossible to know what the next patent to be issued will be and whether or not your company will be at complete risk. It is impossible to go through the entire catalog of patents issued over the last 10, 15, 20 years and determine which will be used to initiate a suit against your company.

His proposed truncations have plenty of adherents in the tech world, particularly among large companies that are continuously innovating. Business method patents are especially controversial because they seem more like ideas or insights than inventions. They also tread perilously close to being obvious, which should disqualify them from patent protection.

The call to eliminate software patents is no less fervent, but it’s more narrowly supported. As Cuban noted, software programs are copyrighted, meaning that the copyright holder can stop people from replicating all or a significant part of that code, or from deriving new programs from it. The crucial difference is that copyrights bar copies of programs, but patents can forbid even independently developed programs that produce the same results.

Cuban’s broader point is that the fear of being hit with an infringement lawsuit from the holder of some heretofore obscure patent (or a patent not applied before in that context) is hurting the economy. Companies would be rolling out new products and services much more aggressively -- and employing more people to do so -- if not for the fear of ‘submarine’ patents and similar ambushes.

He’s right about the absurdity of companies like Microsoft, Apple, Nokia and HTC competing in the courtroom instead of the marketplace, as well as the ugly spectacle of companies buying up patents as defensive measures -- the tech industry’s version of mutually assured destruction. But patent law also helps level the playing field among garage start-ups, pure inventors and established companies. In a world without software or business-model patents, big players will have more freedom to siphon ideas and innovations from smaller players.

That, by the way, is one of the main complaints about the patent-law overhaul pending in Congress. By switching patent protection from the first person to invent something to the first one to apply for a patent on it, many inventors say, Congress would tip the scales in favor of large companies better equipped to win the race to the U.S. Patent and Trademark Office. There’s some debate on that point, but another provision of the Senate’s version would unequivocally help inventors of all shapes and sizes: It would let the patent and trademark office keep all the fees it collects, enabling it to add staff and reduce the lengthy backlog for application reviews.



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-- Jon Healey

Healey writes editorials for The Times’ Opinion Manufacturing Division.