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A WARNING FOR SOFTWARE DEVELOPERS:
THE DANGERS PRESENTED BY SOFTWARE PATENTS
If you are a software developer, the concept of a software patent may be familiar to you. You may also be familiar with the many criticisms which have been raised by the open source community in response to the idea that software is patentable. In the 1980s and 1990s, when courts around the world declared that software was patentable, developers and others involved in the software industry became alarmed at the prospect that these decisions present the antithesis of how the software industry should operate. A laissez-faire approach to software development would encourage the sharing of modern technologies and experiences without concern for legal impediments. Increasingly though, the commerciality of technology based companies and the acknowledgement that intellectual property often provides a clear competitive advantage over competitors has led to a general acceptance that software patents may be a commercially valuable tool.
In software, copyright protects the expression of the programming code. Unlike copyright, software patents protect the function of the programming code. Functions such as methods of user interfaces, data processing and internet applications may be patentable if they satisfy the requirements of a patentable invention. Software patents may also protect functions in areas such as data compression, transmission, security or computer graphics.
For software to be patentable, they must meet the s18 hurdles of the Patents Act in that the software must be a manner of manufacture, novel, useful and not the subject of prior secret use. For many years, computer software was considered not patentable unless it formed part of a physical process. The typical example used is that software which controlled a physical device such as a robot would be patentable as it formed part of a physical process. Around the mid 90s however, the Patents Office released guidelines which specified that a patent may be granted for software if it had a “commercially useful effect”. The validity of these guidelines was later confirmed by the Federal Court of Australia in 1994. Examples of commercially useful effects now include improved imaging, a more effective or efficient method of performing a calculation, compression or storage routine.
In recent years however, the controversy over software patents has revolved around opportunistic attempts by companies who lay claim to the fundamental building blocks of the Internet. Examples of attempts include the technology behind hyperlinks and the compression algorithm used in GIF files after those files became a common image format of the Internet. Obvious inventions which arguably fail the s18 requirements have also been registered, one of the most famous being that of Amazon.com’s patent for its “one-click” on-line ordering system.
So what is the relevance of all this? The answer lies in what happens when you, the software developer is sued for a patent infringement…
In recent years, IBM, Microsoft, Xerox, Adobe, Autodesk, Computer Associates, Informix, Intuit, Oracle, Sequent Computers and Novell, to name a few, have been parties to patent infringement actions amongst themselves and other parties. If you are a software developer, the warranties that you supply with your software should be qualified in relation to its scope. You should never provide a full warranty that your software does not breach any patent rights. The fact that you wrote the software without knowledge of possible infringement will not prevent an injunction and possible damages from being granted against you. This has the obvious effect of preventing your products from being marketed and sold. Worst still, your responsibilities for breach of a warranty, should your client rely heavily on this software, may be enormous. For this reason, it may come as no surprise that many multinational software developers now refuse to provide an unlimited warranty. Maybe you should consider doing the same.
