Is a United States without software patents a Shangri-La for US software developers, or the making of their undoing?

One of my favorite old adages is “be careful what you wish for.”   I think it serves well as a cautionary note for those that are calling for the abolition of software patents.  Why?  Because while the opponents of software patents constantly point out the downside to software patents, they NEVER talk about the downside of not having any software patents.  I can easily see some clear and present negative consequences to American software companies if we abolish software patents.

For one, all software will all be freely clone-able.   Because there will be no consequence to copying functionality (copyright does not protect functional aspects of software), the decision to buy or clone, and the decision to create something new or clone an established product, will strictly be one of which is cheaper.  Innovating, which is risky and costs money, will not be a wise use of money, when your reward will be handing your innovation to unimaginative, risk-averse, low cost producers, to clone.

Let’s say an established company wants to switch vendors for specialty software components it may be buying from one of the multitude of small software companies that support the business-to-business market.  No problem in a world without software patents.  Just give the new vendors the functional specs and have them clone away.  In this “clone at will” world, an innovative incumbent vendor, employing American-based innovators, will readily lose out to the vendors mindlessly cloning established products from a lower cost jurisdiction.   Actually, you don’t even need a lower cost jurisdiction for this type of competition to be unfair, where the incumbent has risked capital and expended substantial sums to establish a market for their product.

Or, let’s say you are an entrepreneurial software publishing entity in a low cost jurisdiction like India, China, South America or even Eastern Europe.  Right now, if you want to clone software covered by patents and sell it in the US, or even software not yet covered by patents but possibly covered in the future (once the US company starts getting cloned), you have a serious barrier to entry – the last thing you need is to blindly clone a product and walk straight into a patent infringement case, which can happen even if the patents in questions are relatively narrow.  But in the Shangri-La the anti-patent opponents envision, blind cloning by developers in low cost jurisdictions will be a fantastic business.  All they will have to do is wait for a US company to spend a few years risking their capital to establish a new market for a particular software product, and then come in to compete with a cheap knock-off.

Do innovative software developers really want a world where blind cloning is as easy as falling off a log?  I don’t think so.  If you ask me, If the anti-software-patent contingency got what they wished for, they would be wishing for software patents.


Comments are closed.