Patent system in desperate need of overhaul - analyst

By Matt Whipp

Posted on 7 Apr 2006 at 16:07

Analyst group Ovum claims that the patent system is in desperate need of overhaul, with the onus falling to vendors to ring the changes.

The six-month long project concluded that while the current patent system has allowed software giants to grow fat on overcharging, squashing competition and choice, and making little in the way of progress, the actual economic case for continuing with the status quo is doubtful.

Ovum's stance mirrors exactly what the Free and Open Source Software community has been saying for years: that difficulty of developing new ideas under a proliferation of patents hobbles innovation, favours the large companies over the small, and results in end-users paying over the odds and having less choice in software.

'Many vendors see patents as a good thing simply because they make money by licensing them,' says Research Director Gary Barnett who led the project. 'This is a short-sighted and fallacious point of view. We believe the economic case for software patents has fundamentally not been made... Software companies that fail to understand the ramifications of the current debate and respond accordingly face a difficult and uncertain future.'

However, Ovum is not in favour of doing away with patents altogether, but rather that the industry agrees new and more stringent criteria for satisfying requirements for novelty and inventiveness, and that disclosure be offered on more favourable terms.

The group calls on businesses to apply these new terms to their own patent portfolios once the bar has been raised in this way and release any patents found wanting.

However, it's unclear why a large company would want to change a situation that strengthens its grip on its market dominance. Yet the open source community has had a profound impact on the way such companies view their future direction.

Most prominently, IBM has gone on the longest journey, from the largest and one of the more litigious patent holder in the world, to one of the biggest proponents and vendors of open-source software and the most liberal in opening up its portfolio for use by the open-source community.

Yet even Microsoft, traditionally played as the villain of the patent theatre, has at least tied its colours to the post of improving patent quality.

Patent offices across the globe have also launched initiatives to boost patent quality: the EU's bid for a harmonised patent framework ran aground over software patents, but the USPTO is working with the open-source community on a number of tools to analyse and improve patent quality.