Innovation Asset Blog

Software industry stretching limits of current patent system

The software industry has emerged as one of the most consistent sources of innovation in the American economy and has been a dynamic landscape for intellectual property management in recent years. Some legal experts have gone so far as to assert that the industry may be outgrowing the patent system as traditional modes of invention disclosure and application filing are becoming impractical.

In a recent report, Cato Institute adjunct scholar Timothy Lee and Yale Law School postdoctoral fellow Christina Mulligan noted that software firms have begun to ignore the patent system when developing new products and services because it has become prohibitively expensive to discover previous filings on which they might infringe. Unlike the chemical industry, for example, which uses an efficient indexing system to catalog patents, discovering previous inventions in the software industry is far less organized and requires "many times more hours of legal research than all patent lawyers in the United States can bill in a year."

Far from being a localized issue, Lee asserted in a guest post for Ars Technica that the implications of potential software infringement extend to just about any company that manages a website, point-of-sale system or online investments.

According to the Washington Post, the consequential decline in patent quality could be a significant inhibitor to innovation. Although the software industry has been a significant contributor to this trend, legislative intervention will likely be needed to address systemic issues that could affect separate arenas.

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.