There are two main reasons to pursue software patents:
First, they provide better protection for your software. While it is true that copyrights and trade secrets could be relied upon to protect your software invention, copyrights only protect the actual written code and trade secrets only protect against employees or competitors literally stealing assets. This means someone could come along and simply copy your idea (without copying the underlying code) and reap the rewards of your hard work.
Second, a patent has an actual monetary value which increases your company’s valuation and attractiveness for investment — great during a funding round or at acquisition.
One source of skepticism towards software patents is that current US patent laws are unclear and subject to change at any time by court decision. While there may be some truth to this sentiment, especially with respect to software patents, nobody knows the future with certainty.
But the present has more clarity, and good business judgment requires action to maximize present value. Following the recent Supreme Court decision in Alice Corp v. CLS Bank, the USPTO has adopted a two-step rule to determine patent eligibility, and you can (and should!) use these rules to guide your software patent application.
First, the USPTO will determine whether the invention is a process, machine, article of manufacture, or composition of matter. An invention which does not fall under any of these four categories is not eligible for patent protection. Otherwise (software is typically considered a process), the USPTO then determines whether the invention is wholly directed to naturally occurring phenomenon, law of nature, or abstract idea. Many software patent applications are rejected because they are considered to be the embodiment of an “abstract idea” executed on a computer.
You may think “Well, everything I code is an abstract idea, so what patent protection can I get?” However, the term “abstract idea” has a complex legal meaning, and the courts have outlined various examples which go beyond being an “abstract idea”. These include: improvements to other technology (including improvements to computer function), specific application of a law of nature using a computer, performing an additional step that is not well understood or routine in the field and adding unconventional steps to create a useful application. However, examples which remained mere “abstract ideas” include: mere implementation of an abstract idea on a computer without more or mere addition of insignificant, routine, or well understood activity to implementation of the abstract idea.
Your chances of success depend on being as detailed and thorough as possible in your application. For example, identify steps in your algorithm or application which are unconventional or improve computer performance and clearly state the utility of your invention and how it improves upon other existing solutions.
Let’s ask the top company by R&D spend in 2017, Amazon, if they think software patents are useless or worthless. Same as with Facebook or Apple, software comprises a large portion of Amazon’s massive patent portfolio, e.g. machine learning, cloud computing, artificial intelligence (AI) and robotics, and these intangibles play a critical role in their respective strategic positions.
Even so, some believe that filing for a software patent is worthless, because once they become public, they are easy to engineer around. This is true about any patent in any discipline. Two words: Robert Kearns. He was the inventor of the intermittent windshield wiper system in the 1960s. His one patent was engineered around by every car manufacturer. His was the foundation for the intermittent wiper system widely used in vehicles today. And while his efforts finally paid off after a decade of lawsuits and legal fees, that another “can engineer” around your invention is no reason not to seek patent protection.
Other common criticisms of software patents is that the process is too slow or the cost is too much. This is also true about every patent filed for any technology category. On average, it takes four to five years and costs $20,000–30,000 of attorney and USPTO fees to get a patent issued in the US. And roughly 55% don’t even make it all the way through to become patents. Imagine wasting $20k and 5 years to learn that you are ineligible to patent your invention.
We recommend a different strategy:
With Seventh, you gain the freedom to innovate and file, on a continuous basis, and at a fraction of the cost of the regular patent application. Our proprietary, comprehensive and completely automated Wizard allows you to document and file as many software provisional patent applications as you need to, affordably.
The provisional application never gets examined, so it never becomes public. Build your software portfolio stealthily and strategically, and transfer all that ownership to your acquirer without spending either the inordinate time or the insurmountable fees to develop a single non-provisional patent.
Whether you are innovating in a software space or in a biotech industry, file a provisional to get your filing date immediately. We cannot guarantee your application will eventually issue as a patent, but we can guarantee you are far more likely to have your invention stolen or worked around if you do not file anything at all.