Patent Absurdity

Whenever we interview a potential expansion stage technology company that is looking for venture capital financing, one of the inevitable questions that we ask the different management teams that we face is what their secret sauce is. We want to know whether the software these potential portfolio companies develop is unique, difficult to replicate, and patented. The count of approved software patents seems to be growing exponentially. As a result, there is almost no profitable software company that is not involved in some sort of litigation over a patent. The purpose of a patent is to reward the efforts and creativity of someone that comes up with an innovative device or method to solve a given problem, by excluding everyone else from using this method or device without explicit permission (Wikipedia). However, ideas cannot be patented as long as they represent a low of nature, physical phenomena, or an abstract idea. Therefore, math should not be a subject of a patent. However if the software’s source code is broken down to its basics, what we have will be bunch of algorithms, or essentially, mathematical equations. Yet, thousands of source codes have already been successfully patented. This is exactly what the movie Patent Absurdity is trying to explain. The creators of the movie have done a great job compiling different experts’ opinions on the problem with patenting software.
More and more people are expressing their disapproval of the software patents. These people rightfully find that software patents actually hinder software creativity and innovation by restricting the use of certain math algorithms. To put this in perspective, that is similar to creating music without being allowed to use certain tones or notes because someone holds the patent on them.
Now the obvious question is who really benefits from the patents. The movie that I have attached explains that it really isn’t the software companies who in most cases file for patents to protect themselves from possible future litigations. It is not even the so called “trolls” – individuals who file for a patent on a source code so that they can possibly squeeze some money off of the software companies. The ones who really profit from the software patents are on one side the lawyers, and on another the hedge funds and intellectual property ventures that buy hundreds of patents so they can eventually use them to file litigations against software companies.

Video: Patent Absurdity – Dokumentarfilm (28:54)