Software Executive Magazine

February/March 2018

Software Executive magazine helps software executives grow their businesses by showcasing the business best practices of our readers, executives from established and innovative software companies.

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petitor. Because software patents can be more valuable than either a copyright or trade secret, certain types of software patents are worth the investment. THE FUTURE OF SOFTWARE PATENTS Because Congress has not addressed how software should be treated by the patent laws, the courts have been forced to address software patentability by ap- plying outdated laws. The courts have further com- plicated the application of patent laws to software by modifying their position over the years, going from a restrictive view to a broad view, and then becoming more restrictive again. Further still, some courts have been inconsistent in their treatment of software pat- ents. Trying to reconcile all of the different court rul- ings guidance is a difficult task and does not provide developers with a predictable method for determin- ing when software is patentable. Instead of trying to squeeze software into existing laws, Congress should do what the Supreme Court sug- gested nearly 50 years ago and expressly enumerate software as its own category of patentable subject mat- ter. In doing so, Congress can also provide specific rules for software patents. For example, Congress could: ▶ Expressly forbid functional claiming unless it is limited to an algorithm disclosed in the patent specification ▶ Require the novelty of software to be more than an inherent or obvious feature of known hardware ▶ Require the point of novelty of any software pat- ent to be a required element of the patent claims While these principles can be found in various court rulings, codifying them in the patent statutes will help bring clarity and uniformity in their application. Until these changes are made, software developers are left with the quandary of whether to make the investment in a patent or use some alternative means to protect their software. S to a known problem, it is likely patentable. Specifically, courts have found that software patents providing an invention rooted in computer technology to overcome a problem specifically arising in the realm of computer technology are likely patentable. Thus, the more specif- ic the software patent in application and its solution, the more likely it will be patentable. The problem, how- ever, is if the software patent is too narrow, it might be easy to design around. Hence, the question becomes, "Is the software solution a real technological innovation that can be described broadly enough to prevent easy circumvention, but narrowly enough to survive a pat- entability challenge?" COMPARING COPYRIGHTS, TRADE SECRETS, AND PATENTS In addition to patent protection, there are other ways to protect software. For example, developers could try to protect their software via a copyright. A copyright pro- tects original works of authorship, including comput- er software. Copyrights only protect the specific code written. Hence, other developers might still be able to use the general idea to develop their own software performing the same or a similar function. Another av- enue of protection is a trade secret. Unlike patents and copyrights, trade secrets do not expire and give busi- nesses an economic advantage over competitors who do not know or use them. Importantly, in 2016, the U.S. passed a new law providing federal protection for trade secrets. Previously, trade secret law varied from state to state. This new law provides uniformity with respect to trade secrets and easier access to federal courts that enforce them. To fully exploit trade secret protections, developers will need to ensure they have taken certain measures to protect the trade secret, such as use of nondisclosure agreements and/or noncompete clauses in contracts. Patents, trade secrets, and copyrights all have value in protecting software. Patents differ from trade secrets and copyrights because patents provide a greater op- portunity to monetize software. With a patent, a devel- oper can license its patent to others in order to gener- ate royalties. Developers can also exclude competitors from making, using, selling, or importing its patented invention, which should generate more revenue by in- creasing the developer's market share. Moreover, pat- ents can be used defensively. If a developer has a pat- ent on its own software, that means it is unlikely that someone else has a patent covering the same technolo- gy. Furthermore, if a competitor tries to sue a developer for patent infringement, the developer may be able to use its own patents in a counterclaim against the com- J O S E P H S A LT I E L is a partner in the Intellectual Property Department at Dinsmore & Shohl LLP. He is an experienced patent litigator who counsels clients on intellectual property matters including licensing, freedom to operate, IP enforcement, opinions of counsel, and patent and trademark procurement. He holds degrees in computer science and electrical engineering. FEBRUARY/MARCH 2018 13 SOFTWAREEXECUTIVEMAG.COM

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