Especially in the multimedia field, software patents are a big problem, because all widely used formats for films and music are covered by a large number of patents. Already for several times, we have been forced to reject product ideas, because the corresponding patent situation was too unclear and the development of a product would have borne too many legal risks.

Current situation

We already pay license fees for a few multimedia formats where large patent pools have already built up a strong threatening potential (see for example mp3licensing.com). Many of these patents are probably invalid according to current law, but we do not have the resources to fight these patents in court. For example, the MPEG video patent package contains many dozens of single patents that would have to be invalidated individually. With our limited resources this is not doable, so that we have swallowed the bitter pill and have given in to the licensing pressure for some of our products instead of going to court. Other projects have been aborted in the planning stage, because they wouldn't be profitable due to high licensing fees.

The current patent situation is that a handful of large patent pools is able to enforce licensing due to the sheer number of patents in the bundle. This is unpleasant and morally dubious but cannot be changed. For our development this is still somewhat tolerable, even if it severely limits us in possible fields of development.

Future threats

Should software patents become legalised in Europe, not only some multimedia formats would be burdened with enforceable patents, but each component of a program. This includes, for instance, thumbnail views of photos, internet-based payments and simple structuring aids such as "riders". Currently these patents are not a big problem, because prevailing legal practice clearly shows them as invalid and against single patents we could fight in court. The owner of potentially invalid single patents also are aware of this, so that they do not currently try to enforce them. Should however the EU directive be adopted in its current (Council) version, these patents would be enforecable and would have enough weight to use them for 'milking' of software producers .

The positive side of patents?

Patent advocates often claim that patents enhance research and generate more innovation. In other fields, such as the pharmaceutical industry, this is true. In those fields you need years of experimenting until a new drug is developed. This costs millions of dollars and the inventor would have a huge disadvantage if he was unable to protect this investment against imitators.

It is however important to realize that the software field has very different dynamics than other fields. A computer provides an artificial environment where all causal relations can be predicted logically. One does not have to spend years to find a solution to a problem in a trial-and-error approach. Instead, solutions can be worked out by reasoning and one can instantly predict the effects of a solution.

Due to this fact the software industry proceeds at a much faster pace than other industries, which is also shown by the rapid progress this field has seen in the past. It is the programmer's very normal task to produce inventions non-stop, in some cases dozens a day. Individual inventions thus do not require large investments.

Given the innate dynamics of the market, there are many incentives for innovative activities. In the software field, to put it colloquially, one "has to run to stay in the same place". If one stops developing new products then within a few months one will lag behind the competition in a way that is clearly noticeable in the company's revenue. In the software field, innovation is the prerequisite to stay competitive.

But what would prevent one from "stealing" all inventions of another company to keep one's own market position? The answer is simply that this is not possible. Each program consists of thousands to hundreds of thousands of single inventions and most of these inventions refers to things "under the hood". The problem is that each software has so many components that peeking under the hood gives an outsider just an unintelligible tangle of thousands of unknown objects. To decipher that ruckus would take longer than to develop the software oneself. The only way of efficiently stealing inventions in the software field is to steal entire program files. This however is outlawed by copyright, so that no additional protection is needed.

Summary

For innovative software developers patents are a nuisance at best and a threat to their existence at worst. They restrict the possible fields of development and due to their ubiquity they cause big risks for each developed program. Moreover, in the software fields, software patents are not needed at all as incentive for innovation, because the market dynamics and the inherent complexity of software automatically trigger a highly innovative environment.