The Pros and Cons of Software Patents
COVID-19 has knocked us all on our asses. If you’re like me, you’ve been watching the effects and going through an emotional roller coaster. Sad. Angry. Frustrated. Optimistic. Scared. Even while uncertainty lies ahead, one thing is for sure: This iteration of the coronavirus will permanently change the healthcare industry.
The pandemic has pushed the limits of our healthcare system. Virtually overnight, medical professionals have developed a collective, unprecedented need for technology as the #1 tool in their belts.
Medical teams need access to incoming data so they can create systems to streamline patient classification and decision-making processes. They also need the function of telemedicine as a means to monitor a vast number of patients from home. Building new tools to adjust to pandemic-era needs means seeing new intellectual property in the healthcare industry—and that includes possible investments in developing custom healthcare software.
While coronavirus has boosted efforts in research and software development in an effort to positively impact the health crisis, it’s also highlighted the unique, long-simmering debate regarding the parameters of software patents.
A little background: In the earlier days of computer software, the U.S. liberally granted software patents—because patentable subject matter included “anything under the sun made by man,” except laws of nature, natural phenomena, and abstract ideas. That changed on June 19, 2014, when the Supreme Court in Alice vs CLS Bank set forth a two-step test that heavily restricted the use of patents as a means to protect software.
However, there is a notable exception: Software that’s directed to an improvement in a manufacturing process or other technological process in an inventive way using a computer may confer patent eligibility.
Since the start of COVID-19, many of my clients in the medical industry have asked if they should patent their software relating to research, diagnosis, and treatment of the virus. The answer to this question depends on what your business objectives are in the long run.
Whatever those objectives are for you, you may want to consider the benefits of investing in a software patent:
You’ll Contribute to Your Market’s Barriers to Entry.
Your competitors will have to spend additional time and money to deal with the risk of infringing your patent. It forces them to have to code around your patent rights, which may result in a lower-quality software product on their part.
You’ll Give Yourself the Gift of Licensing Revenue.
A patent gives you leverage to negotiate licenses, which can help generate revenue for your business. Otherwise, big players don’t have an incentive to pay you for your software solution.
Your Patent Application can be Used as a “Defensive Publication.”
Even if you don’t obtain a patent, filing a patent application might prevent another company from getting their own patent on the algorithm that you developed.
The Medical Industry is Becoming More “IP-Centric.”
COVID-19 is changing how the medical industry operates, and owning intellectual property—trademarks, patents, copyrights—is going to become a more valuable decision. Additionally, if you end up selling your company or getting acquired down the line, IP assets like patents are valuable components to have in those transactions.
On the other hand, software patents may come with a few downsides as well:
The Patent Process is Slow.
On average, it takes 2-3 years to obtain a patent. By the time you do obtain one, your software may be outdated, or its code might have evolved significantly. Thankfully, the Patent Office has an accelerated examination program that issues patents within 12 months. Given that your software could save lives, they can likely fast track examination.
A Software Patent Isn’t Guaranteed.
In the wake of the Alice decision, the patent process is far less predictable for software than it used to be.
The Costs for a Software Patent Don’t Always Justify the Investment.
Patent prosecution is expensive. Obtaining one from start to finish can cost anywhere between $15,000 and $35,000. However, the potential benefits of earning additional security and licensing revenue may be more compelling.
Ultimately—and like most business decisions—this judgment is best made based on value. If a software patent will add utility to your overall business and give you a competitive edge, it’s something you may want to plan for as your market evolves.
Our team is happy to walk you through the software patent process. To set up a conversation with me, send a message below.
