If you’re wondering why software patents are good for companies, think about these four reasons. They protect your Non-obvious solutions, Useful, Promote Progress, and Cost. These are all compelling reasons for patenting your software. But which of these is the most compelling? Read on to find out more. Listed below are some of the reasons why software patents are good for companies. You might be surprised! But do they really work?
Reason why software patents are good
Non-obvious
While the software industry has a vested interest in patenting new software features, many programmers are skeptical of software patents because of the perception that patent owners block their freedom or ability to program.
Although software patents are often prized by investors and management, developers commonly think that patents can also stifle progress by not allowing them to practice their trade. Many patents for new software and technologies are so far outdated that the use of them is often outdated or redundant. However, software patents are a valuable protection for both programmers and investors actively seeking to develop innovative software. Nonetheless, software patents are a mixed bag – we need to ensure that they are designed to preserve their good qualities, while not blocking software work.
This is solved by the patent system’s requirement that patents are granted only for non-obvious novel inventions. A computer program must be non-obvious to a person with ordinary skill in the art at the time of filing a patent application. It is often difficult to judge whether a new software is an improvement on existing software – an aspect that patent practitioners have been striving to perfect.
The patent application for a software product is similar to the process for a hardware patent. The application must contain all the information and criteria that are required for a regular patent. This includes good flowcharts of each step in the process and a detailed description of the software code. It should also explain how the software works with the machine or hardware. If the software works with a hardware such as an IoT application, the application should provide detailed description of the interactions between the software and the IoT hardware. The software must also be transformative.
Useful
Some say software patents are useless. Others say they have proven useful in promoting incremental innovation. Both sides have valid arguments. Software patents protect inventors and investors actively seeking to develop clever ideas. There is certainly room for software patents, but they need to be crafted carefully to maintain the benefits of innovation while reducing their downsides. Here are a few pros and cons. Hopefully, these discussions will help you decide whether software patents are useful or not.
For software developers, software patents are very frustrating. In most cases, the people who talk about software patents have an agenda. For example, it is well known that the big software/SaaS gorilla companies are not in favor of patents to maintain their market position over startups.
Look up more on Phhhoto’s fate and you will understand why software patents are useful and how they benefit software developers. In that case, Phhhoto alleged that Facebook/Meta approached Phhhoto for a partnership, then slavishly copied their software and blocked their access to Instagram when the competing solution became available. If Phhhoto had patents, they may have had a fighting chance.
One of the major benefits of software patents is their commercial value. These protections are valuable because they reward inventors and reward them for their commercially valuable inventions.
The biggest drawbacks of software patents are that they are difficult to get and take forever to obtain, but the benefits outweigh the disadvantages. While they still pose a hurdle for software developers, the benefits are definitely worth the effort.
Another advantage of software patents is that they enable the creators of software to monetize their creations. This is a particularly important point, because free software is often used commercially.
Promote Progress
While monopolies are desirable for protecting a company’s inventions, they also harm innovation. For example, a software patent prevents new ideas from being implemented, which in turn will slow down progress. It also hinders innovation because it stifles new products and processes. In addition, patents can prevent people from producing and modifying software. Many people are concerned about these problems and are wondering whether software patents are beneficial.
Economists have demonstrated that software patents promote progress by giving inventors exclusive rights for 20 years. In exchange, the patentee must disclose the best way to implement the invention.
Software patents are important to the advancement of society, but they are not necessary. Many people seek patents in hopes of appeasing venture capitalists’ questions on defensibility of their business models. Furthermore, it is expensive to obtain a patent. Some applications cost tens of thousands of dollars.
Some people are concerned that software patents actually discourage innovation. This is not necessarily true. The FTC has weighed in on the issue, and the book is worth a read. The authors of the book analyze massive amounts of data to explain how software patents affect economic growth.
Case Study: How to avoid the fate of Phhhoto
On November 4, 2021, Facebook was sued by a former startup called Phhhoto for allegedly violating antitrust laws. The suit alleged that the social network killed its business by cloning a competing product and ultimately driving it out of business with anticompetitive tactics.
Now, after a year of discovery and depositions from key players at the company and its then-parent Instagram (which is now owned by Facebook), we have learned more about how these events unfolded. What follows is an edited version of what we know today about how this drama came to pass.
Instagram rival Phhhoto is suing Meta, formerly known as Facebook, over allegations that the company violated antitrust laws by cloning a competing product and ultimately killing its business.
As you may recall, Phhhoto was a mobile app that allowed users to create short videos that could be shared to social media. The user-generated content network was released in 2015 and shut down in 2016. At the time it was the last standing competitor to Instagram’s video sharing service (which at the time had already been around for several years).
Phhhoto sued Facebook over allegations that the company violated antitrust laws by cloning a competing product and ultimately killing its business. In this case, however, Phhhoto isn’t relying on strong patent violation claims; rather it’s leveling an antitrust complaint against Facebook because of what happened to its app after Facebook acquired Instagram.
You’re the founder of a startup that recently raised $50 million in venture capital. You have a new product that you think will be the next big thing, but there’s one problem: your company doesn’t integrate with Facebook or Instagram.
This isn’t necessarily an issue—there are plenty of social networks out there, after all—but it can become one when your product is similar to one already owned by Facebook. In this case, it was Phhhoto (not Photohito), which allowed users to upload multiple photos and videos into their own timelines without ever leaving their phone. The app never rose above obscurity, but its fate offers lessons for anyone who wants their business to avoid getting caught in Facebook’s crosshairs:
- Don’t rely on any single platform for distribution. Although Phhhoto had built up a user base through other channels like Twitter and email newsletters before launching its app version, it failed to build an audience on Instagram because of restrictions placed on developers by Facebook and Instagram themselves.* Work with other companies early on instead of waiting until it’s too late.* Don’t expect any favors from tech giants if you threaten them at all; they’re more likely than not going to ignore requests unless those requests come in large numbers.*
Zuckerberg’s own selfie, taken as he was testing the app.
Phhhoto presented evidence that Zuckerberg took his selfie when he was testing out Phhhoto for the first time. He wanted to make sure that he could use it as effectively as possible and get familiar with all its features before thinking about this new app.
Instagram co-founder Kevin Systrom, who led Instagram at the time, also downloaded the app and explored its features.
Instagram co-founder Kevin Systrom, who led Instagram at the time, also downloaded the app and explored its features. He liked what he saw and gave Phhhoto an early thumbs up. At Facebook’s Menlo Park headquarters, photo sharing was growing in popularity among users and executives alike.
“They thought it was cool,” Fogg said of his meetings with Facebook executives. “But I don’t think they were too worried about it.”
That was a big mistake on their part—and if you’re going to build anything outside of your comfort zone (like a startup), you should heed this lesson: Don’t underestimate anyone else’s potential for success!
Hurren, then Facebook’s Strategic Partnerships Manager, reached out to Phhhoto, asserting that Phhhoto was “really awesome.” Hurren first offered to incorporate Phhhoto’s technology into the Facebook Messenger service. When Phhhoto declined, Hurren offered to incorporate Phhhoto’s content into Facebook’s users’ Newsfeeds. Phhhoto invested heavily in this project, but ultimately Hurren did not move forward, citing internal “legal conversations” that “hung” the project up.
Hurren, then Facebook’s Strategic Partnerships Manager, reached out to Phhhoto, asserting that Phhhoto was “really awesome.” Hurren first offered to incorporate Phhhoto’s technology into the Facebook Messenger service. When Phhhoto declined, Hurren offered to incorporate Phhhoto’s content into Facebook’s users’ Newsfeeds.
Phhhoto invested heavily in this project, but ultimately Hurren did not move forward, citing internal “legal conversations” that “hung” the project up.
At the time of launch, TechCrunch noted that Boomerang appeared “suspiciously similar” to Phhhoto.
If you’re a budding entrepreneur looking to make it big by launching a new app, here are some takeaways from Phhhoto’s fate.
- The important thing is not to be first to market—it’s about being the best. Whether your product has been on the market for 50 years or just for five minutes, if people don’t love it and use it more than anyone else’s, chances are good that they won’t stick around long enough for you to make any money off of them.
- Don’t copy your competitors’ ideas unless you can do better than they can. If someone else already has an idea that seems like a no-brainer (like having filters in an Instagram-like photo app), then maybe you should come up with something else instead of trying to compete with them directly. You don’t want anyone thinking that your product is just “suspiciously similar”
The suit alleges that Boomerang was the culmination of Facebook’s anticompetitive effort, effectively killing the smaller company with a copycat app that reproduced Phhhoto’s innovations “feature-by-feature.”
The suit alleges that Boomerang was the culmination of Facebook’s anticompetitive effort, effectively killing the smaller company with a copycat app that reproduced Phhhoto’s innovations “feature-by-feature.” The complaint claims:
- In December 2014, Facebook informed Phhhoto it was working on a new product similar to Phhhoto’s photo messaging app and would need to obtain Phhhoto’s consent before launching it. The complaint states that “Facebook gave [Phhhoto] no indication at this time that it intended to use” any of its intellectual property in building this product.
- On April 19th 2015 – less than two months after being notified by Facebook – Phhhoto was contacted by Instagram saying they were interested in acquiring their technology for their own photo messaging app.
“We watched Systrom and his product team quietly using Phhhoto almost a year before Boomerang was released,” Phhhoto co-founder Champ Bennett told TechCrunch in 2017.
- “We watched Systrom and his product team quietly using Phhhoto almost a year before Boomerang was released,” Phhhoto co-founder Champ Bennett told TechCrunch in 2017.
- It’s no surprise that the Instagram team would have used the app: its developers were former Instagram employees, and it did work very similarly to their app, only with more features.
After the app shut down, Bennett said that it “wasn’t a surprise at all” to see Instagram launch its own clone.
If you’re thinking of launching a startup, it’s important to think about patents early on. After all, if your company has the next Instagram or Boomerang on its hands and then gets bought by Facebook before it ever goes public—like Phhhoto did—you’d want to be able to protect yourself with patents instead of relying on antitrust claims.
Bennett said that it “wasn’t a surprise at all” to see Instagram launch its own clone. But had Phhhoto secured patents for its product earlier in the game, this copycat strategy from Facebook probably wouldn’t have worked quite as well: With rights under patent law, Bennett would have been able to sue Facebook for infringement and claim damages for lost revenue and taken-for-granted goodwill associated with his app’s original functionality.
Ironically enough though in this case (and much like Google’s lawsuits against Apple), it’s actually Facebook who benefits most from being able to use Boomerang under patent 11226716B2 —which was originally owned by Microsoft but transferred over to them when they purchased LinkedIn back in 2016.”
After the app shut down, Bennett said that it “wasn’t a surprise at all” to see Instagram launch its own clone.
After the app shut down, Bennett said that it “wasn’t a surprise at all” to see Instagram launch its own clone.
Bennett told me that he had been following the rise of Instagram Stories closely and saw that the company was quickly gaining new users. He said: “We knew it was going to happen eventually because of their relationship with Facebook, but I didn’t think it would come so soon. It wasn’t a surprise at all.” If Phhhoto had patents, this would provide additional protection instead of relying on antitrust claims (which are very difficult). Startups should start thinking about IP and ptents early when building their go-to-market strategy.
IP Lessons from this case
It’s no surprise that Phhhoto failed to obtain a patent or copyright on its user interface. The reason for this is that it decided to go with a less common path of protection from the start: trade dress rights (which are closely related to trademark laws).
The lesson here is that if your product does not have patentable features, then you should consider filing for a trademark application on your software as early as possible. You can do so even before the initial design phase of development begins by filing what is known as an “intent-to-use” application; this gives you time and flexibility to come up with something better before you actually finish developing it.
In addition, if there are aspects of your user interface that are truly unique and novel—and could be considered trade dress worthy—then filing an additional application under Section 43(a) of the U.S Copyright Act may also be helpful in protecting those elements.
Cost
The debate about whether software patents are good for innovation has long raged between proponents and opponents. For example, many software entrepreneurs say that software patents are essential to the future of the industry.
On the other hand, others say that software patents can be harmful, as they can lead to patent trolls and costly patent wars. And yet, there are many pros to software patents. They are more cost-effective and reduce the threat of patent trolls and restraints of trade.
In addition to the costs, software patents can be a difficult process for startups. Even if they are not cheap, they can give their company an edge over their competitors. For startups, patents can increase the value of the company and prove that they have developed a new technology that has a unique value. Alternatively, companies can opt for copyrights to protect their software. These laws cover the expression of the software, preventing competitors from copying it.
In general, preparing filing a software patent costs between $8,000 and $17,000 in PTO fees and legal fees. This cost is only the initial filing fee, as the rest of the process involves litigation and post-grant maintenance fees. However, if your company is able to obtain a software patent before you start using the product, the investment could be well worth it. If your company is looking to protect its idea, software patents are a smart move.
Obtaining a software patent is not inexpensive. It requires several steps, including research, drafting and patent attorney fees. A software patent search will cost between $1,000 and $3,000, and will involve a thorough review of accepted and pending patents. During this time, you can test your software and find investors. It is crucial to do your research beforehand to make sure your idea is truly unique. Here are the steps to prepare for your search.
First, you should perform a patent search. A software patent may protect abstract ideas, but there are no clear legal boundaries, and they may differ in different regions. Software development requires interdependencies and dependencies. This means that patenting software might actually inhibit innovation. Furthermore, if a software patent is issued, the owner must be the enforcer. Using the patent does not grant the right to use or make the product, but it does provide protection from legal action.
The process of patenting software is complex, and filing a software patent is not a cheap process. The cost of obtaining a software patent is directly proportional to the perceived value of your idea. After all, patenting something that everyone can work around would not be economically beneficial, regardless of the workaround. A software patent will protect your idea from unauthorized use and position your organization for a higher financial performance.
Software patents are valuable intellectual property, but it can take several years for the patent to be granted. Additionally, a software patent can be expensive to maintain and tens of thousands of dollars to acquire. Moreover, due to the high costs of patenting software, companies prefer to obtain copyright protection rather than a software patent. However, there are several advantages to obtaining a software patent.
First of all, it is essential to choose a patent attorney who specializes in software patents. The consultation will allow you to ask questions about the patent process and judge the lawyer’s communication skills.
Justification For Pursuing A Software Patent
A software patent is a powerful asset, especially for startups. Major software companies often file patent applications to protect their inventions. Startups should follow suit. A software patent is proof of innovation, but is also a business asset in itself. A detailed patent application encompassing all possible embodiments can help advance the patent application. But what should software developers include in their patent applications? These are just a few questions to consider.
A recent Supreme Court ruling on the issue, Alice Corp., has cast a cloud of uncertainty over software patents. In this case, the Court refused to define an abstract idea, effectively invalidating many business models and software patents. Since the Supreme Court’s Alice ruling, software patents have been challenged more often than ever.
Justification for pursuing a software patent is often unclear, and the application must be written carefully. A patent application should focus on patentable features, and not just on the software itself. By focusing on patentable features, software developers increase the chances of success.
A software patent application can protect a portion of a software invention or the entire invention. It is important to seek legal advice to avoid wasting your time and money. Justification for pursuing a software patent is crucial to the success of a software startup. A software patent application should focus on its most valuable features.
A software patent should be filed after evaluating the value of the program in terms of the market, potential revenue, and the risk of piracy. Software patents are more expensive than other type of patents, but they do provide a greater level of protection. Therefore, it is advisable for software developers to hire a software patent attorney to help them get started.
Impact Of Alice Corp. Ruling On Software Patents
The recent Alice Corp. ruling has significantly changed the patenting process, especially in software patents. The decision essentially re-writes patent rules, rendering thousands of previously issued and pending patents invalid. The decision also has wide-ranging impacts on the subject matter of patents, making it essential to review Alice’s impact before filing a new patent application. The Alice decision may even lead to more software patents being granted.
While the Supreme Court is unlikely to reverse the Alice decision, the recent ruling may affect the value of existing software patents. The Alice decision may also lead to legislation to overturn the ruling, which would reshape software patent litigation. If Congress passes such legislation, the Alice ruling will have a substantial impact and will likely reverse many trends that had occurred before Alice. For now, however, the Alice ruling will be a good example of the need for patent attorneys to carefully study the Alice decision.
The Alice ruling reaffirmed that a patent should not be based on a fundamental idea. It must also contain an “inventive concept.” Simply implementing a task through a computer does not make a process novel. Alice made it harder to patent computer programs and has reduced the number of “business method” software patents. Although these patents are still available, they are becoming much more difficult to obtain.
The Alice Corporation ruling affects many aspects of software patents. Alice Corporation filed four patents in the United States. They involved a computerized scheme for mitigating the risk of financial transactions. This computer program acted as an intermediary and reduced the likelihood of loss. Alice Corporation patented a system similar to CLS Bank International. However, it did not apply the rule to this particular computer program.
