Patents, Copyrights, and Your Software Innovation

As soon as you create a work in a tangible medium, such as a computer file, you have copyright in that work. Copyright protection gives the owner or licensee the right to control how other entities display, perform, distribute, copy, or create derivatives of the work.

Historically, most software is released under copyright licenses, and no further protection under patent law is utilized.  Factors such as first mover advantage, understanding a particular market niche, or controlling distribution channels are used to gain market advantage.

If software implements a patentable invention, the additional step of filing for a patent to protect the intellectual property in this second way as well is worth careful consideration. Patent applications typically cost $30,000-$50,000 over their lifetime for coverage in the US alone, and take several years to issue. In addition, the inventors must invest considerable time during the drafting and defense of the patent application in order to achieve broad useful patent claims  In return for this investment, patents offer stronger intellectual property protection than copyrights as they protect the idea itself and not simply its implementation in code, giving the patent owner or licensee the right to control how other entities  make, use, sell, offer for sale or import a device or method claimed by the patent.

A patent, if issued, allows the owner to prohibit others from using the patented invention.  For software, the patented invention is often a method of calculating something. The copyright protects the actual code itself, but would not stop someone else from creating their own code that implemented the same method. Depending on the specific software, desired commercialization pathway, and time to market, the additional step of pursuing a patent may or may not be worth the added expense.

Here are some cases when the value of the additional protection offered by a patent may justify the additional time and money required to apply for the patent:

  • When you’re starting a company that will require venture capital investment. Start-up companies typically are not in a position to sue a large company for patent infringement, so the main value of the patent will be to increase investor confidence. Some investors primarily check the patent protection status, while others do a more thorough evaluation (or due diligence) to see how strong the patent or pending application may be to protect your product or service.  Discuss with your potential investors if this will be an important consideration in your business venture.
  • When your invention is foundational, and improves an existing piece of hardware. If your invention will significantly expand the market for a successful device, and the device manufacturers typically do not employ experts in your field, these manufacturers may want to license your invention.

Here are some reasons your code may be valuable but may not justify the additional protection offered by a patent given the cost and time commitment of applying for the patent:

  • When your code provides a significant advantage over starting from scratch. This most frequently happens when you have a large code base, or when specialized technical expertise is required to implement your solution.
  • When you have a complete solution that can be provided directly to end users. Many end users license executable software, or code libraries, directly from UW (often through our Express License program). Your code will be most widely valuable if users do not need to customize it for their individual needs.

When considering whether to file for patent protection, the following questions apply particularly to software inventions:

  • Can you detect infringement? Unlike a device or a composition of matter, it may be very difficult to figure out whether code running on someone else’s server implements your algorithm.  If you can’t discover and prove that another entity is practicing your patent, then the patent does not have any value.
  • Are you implementing a known idea in software? Recent US Supreme Court rulings suggest that a higher standard will be applied when considering the patentability of using software to implement a known business method.  In general, automating a manual activity by using a computer is not considered patentable.
  • How quickly are products changing in the industry sector?  In many computer products, software is obsolete in the time it takes for a patent to be issued by the USPTO.

 

Additional references

Copyright v. Patent: A Primer on Copyright and Patent Protection for Software
(http://www.law.washington.edu/lta/swp/law/copyvpatent.html)

The Patent Approach of Stanford's OTL: If no licensee is reimbursing patent costs
(http://otl.stanford.edu/inventors/resources/inventors_patapp.html)