Despite the constant abuse by patent trolls, software patents are an important part of the economy. As New Zealand bans them, we should think for a moment why they should be protected.

know about patents 01 1024x975 Software patent reform, not abolition is the answer

Reports coming in from Auckland say that New Zealand has put an end to software patents, with the passing of a new Patents Bill in its parliament.

Hailed as a necessary reform by the Institute of IT Professionals, this bill comes out on the “side of software professionals” according to an institute spokesman and is a “step towards innovation” as per the country’s Commerce Minister.

Granted, software patents have been long abused. Last summer’s Apple v. Samsung trial is an apt example of it. The SCO trials of the early part of the decade are another. These trials both tackled issues where it is questionable what protections software patents should have, and while a jury found Samsung guilty of systematic patent infringement the USPTO’s reexamination has picked apart the validity of the patents Samsung supposedly infringed.

How do we prevent another Apple v. Samsung, while incentivizing innovation? By reforming software patents, not abolishing them. Because of the incredible complexity of software patents, trials need to take place in a specialized court circuit with judges that are an expert in the field. The USPTO — and similar agencies — need to be given venue during these trials to offer its expert, and impartial, opinion which should be considered dutifully

Further, in order to prevent the wrath of patent trolls — which fuel most of the hatred for software patents — lawmakers need to restrict the ability of companies that have no stake in the game to sue. So corporations that have somehow come into the possession of patents will still have the right to collect a modest royalty, but can’t sue companies that use their patents as part of a grand scorched earth stratagem.

Consider for a moment a world without software patents: A startup company working on some revolutionary game changing IP could be squashed by its Fortune 500 competitor who catches wind of the innovation and releases something almost as good at an unfairly low price to keep competition at bay.

Granted, as the great film Pirates of the Silicon Valley demonstrates through a compelling narrative, the greatest disruptive innovation of the twentieth century came because one company copied another company which copied another company. But this is the exception that proves the rule. If these companies followed the principles of standard essential patents and licensed the technology to each other on fair reasonable and nondiscriminatory terms, innovation could still happen while rewarding those who took the risk first to innovate.

Software patents are an important, though oft abused, part of the economy. The software patent regime can be fixed, we just need to try.