We were granted another US Patent for our MondoPlayer software this week.
We’re very proud of the groundbreaking work we are doing in the field of online video and video search. Our patents confirm our work is novel and useful.
But are software patents a good thing or a bad thing?
- Patents offer the holder some protection during the years that it takes to move from concept to market. Developing new technologies is a business fraught with too many risks to enumerate in this article. By filing a patent application you are able to secure a “priority date” (the date your protection starts) for your invention well before you have a fully marketable product.
- Patents give investors an independent assessment of the novelty of an invention (not the viability in the market).
- Patents cannot guarantee that another company won’t assert infringement on some other aspect of your technology or claim your patent is invalid in the future, but they give you a foot to stand on if you face litigation.
- Patents are a valuable asset in the event a company is sold.
- Patent litigation is expensive and seldom results in a clear victory for one side. The vast majority of patent litigation is settled out of court because the costs of taking a fight to a judgment routinely exceed millions of dollars.
- There is no such thing as a “patent police”. You need to catch the infringing party yourself and you need to bring the court case at your own expense. In the Eastern District of Texas (a popular jurisdiction for patent cases in the United States) the pretrial process costs between $500,000 and $1 million for a typical case. Patent litigation is as far from The People’s Court as you can get!
- Patents can constrain innovation. Software is built on nested components that sit one on top of the other like Russian Dolls. You can’t write software without building on other technologies. If every software concept were patented the industry would be stymied by a bureaucracy of interlocking license agreements. A day in a typical software developer’s life would consist mainly of verifying whether anyone had previously patented X or Y.
On balance, patents are worthwhile, but they are not a panacea. They are worth having as part of a broader intellectual property strategy (including trade secrets, trademarks, copyright and confidentiality agreements), but they do not guarantee you won’t experience challenges to your property in the future.
Just because you have a lock on your front door, you’re not guaranteed that someone won’t try to break in your window.