After a few weeks of work, and many comments from various open source enthusiasts, we (Hamakor) filed our memorandum today in response to the Israeli Patent Authority’s call for submissions (more here), calling the Israeli regulatory authorities to refrain from granting patents on software [Hebrew Memorandum].

Our main claim was that protecting software through patents shall provide protection on ideas, which are usually expressible in more than one manner, and shall be the beginning to a race to the bottom where every person shall register as many patents possible and incur high costs on each player in the software field.

We noted that the chilling effect created by the fear of using software protected by patents, be it free software or proprietary software, and incur costs on the system solely in order to purchase insurance from the theoretical patent infringement. In such case, any independent development of software without legal assistance from the first day of development shall be problematic, and deter developers from developing free software or promote innovation.

In Israel, unlike the United States which awaits decision in re Bilski, and a recent USPTO decision in Srinivas Gutta & Kaushal Kurapat, and unlike the EU which has a strict approach towards software patents (clause 52 to the EU Patent Directive does not acknowledge software patents), Israel has a theoretical decision by the patent registrar, Noam Meir in Pat 131733 Eli Tamir, which was yet to be examined by the supreme court and has yet to be accepted as precedential. Meir stated, in his decision that “the hardware is patentable and the software is outside the realm of patentability (…) even though software itself is unpatentable, physical computed systems, which integrate hardware and software, or who make technological use of new software in order to present a new result with inventional progress, may be patentable in several conditions”.

We believe that software patents do not promote innovation but are only used to bash business opponents and prevent innovation. For example, patent number 5960411 which was filed by Amazon. This patents tries to own exclusivity over “one click purchases” in electronic commerce website. The same could be said on patent number 6727830, which describes a method of double clicking in order to open an application. Both patents present no innovation apart from algorithms. Moreover, a research conducted between 2000 and 2001 in Stanford found out that the use of patented software technologies enhance sales in websites and allows the general wealth to grow, while it deters other from using similar technologies. Therefore, even if Amazon invested millions of dollars in a system which would enable faster purchases and lower drop rates, the innovation does not contain any technological or industrial nature, but conceptual. Protecting ideas is not something that should occur in free markets, where we find that we wish for greater competition between the expression of these ideas.

Patents in the digital world are different from physical patents in two manners: The period of protection and the form of expression. Where technological applications such as the tumbler lock was created more than 4,000 years ago, different types of applications based on it were registered as patents for more than a century. However, protecting a specific lock for a period of a few decades does not interfere with the free market in the same manner which protecting software does. In the computing industry, and especially in software, five years are eternal, let alone twenty years.

The exponential growth in computer chips, based on Moore’s Law, causes a fast development of technology where five year old software are almost irrelevant.

The second rationale is that in the physical world an idea may be applied in two different forms, establishing free competition, without infringing the patent (for comparison, C 2469/02 Hasbro v. Lee-Dan, CA 9678/05 Beytimu v. ARRABON -HK- limited, C (Haifa) 399/04 ARRABON HK v. Beytimu). For example, the patent granted to General Mills in regards to the Monopoly Game was so wide where it prohibited almost any board game that allowed transacting funds (see also Anti-Monopoly, Inc. v. General Mills 55 A.L.R.Fed. 223; 204 U.S.P.Q. 978; 611 F.2d 296): “This invention relates to board game apparatus and is intended primarily to provide a game of barter, thus invoking trading and bargaining”. In such a situation, theoretically a game may had been applied in a way that wouldn’t breach the patent; however, in software the thing would be impossible.

The problem is that in the world of software patents the border between the definition of the problem and its solution is unclear; sometimes, the patent granted is on the problem’s definition and not on its solution. For example, the voice codec MP3 is protected by a software patent. In the field of video and audio compression patents were granted so that they protect using the files using algorithms different from the patented algorithm.

In such case, the proprietary algorithm’s creators demands royalties also for the decompression of a compressed file, so that every media player’s manufacturer should pay even when the decompression was made by a different algorithm (and see, for example clause 24 to the Israeli Copyright Act which states that “Use of the computer program for purposes for which it was intended, including correction of errors in the computer program or making it interoperable with a computer system or with another computer program” is permitted).

An additional problem, which defines software patents as a race to the bottom, is that the Israeli venture capital corporations measure intellectual property in start-ups by patents. Under their method of inspection, the sole manner to quantify property is by the possible amount of patents. This characteristic creates a race to the bottom that usually incurs high costs of registering patents on start ups, and attempts to patent any piece of innovation, even when it is obvious it isn’t patentable. In a similar manner, Netex applied in 1998 for a patent on smart and semantic browser address bar, so that every search using the URL box in a browser would be covered by the patent. However, though the patent lacks innovation in our opinion, and where there is no indication that there was no prior art, the question is what separates the address bar from every other input box, be it by website or software. They are all input boxes that operate in a similar manner.

We believe that the unstoppable registration of patents shall not only incurr costs on the Israeli High-Tech field, but also harm software due to the Software Patents Arms Race.

In a similar manner, there were a few attempts to enforce what is known in the industry as a standard (6:07-CV-113 i4i v. Microsoft and Microsoft’s Settlement with TomTom over FAT32), so that products who tried to interface with known and acceptable standards in the industry were sought for patent infringement. These lawsuits implicate on how innovation is perceived and how interacting with free market occurs. For example, the lawsuit brought by Microsoft against TomTom was in order to prevent TomTom from using open source and free software; the apparatus built by TomTom was based on Linux, and Microsoft claimed that storing data on Fat32 drives was a breach of their intellectual property rights. However, more than any other thing, Microsoft, who holds a de-facto monopoly over Operating Systems, attempted to prevent competition from growing.

We believe that changing the legal atmosphere to a situation where patents shall not be granted over software will not only enable free competition in the Software field, but provide incentives to the Israeli economy, provide quality investments and will base the investment in people and not patents. In such case, not acknowledging software patents shall allow Israeli companies to develop software without fear of being sought for alleged infringement for a different patent. The main insight is that the core of the Israeli Software field is people, and that allows development without fear.

The uncertainty in developing software where an arms race exists discriminates between developers of free software and proprietary software. Free software developers are mostly volunteers and a community which allows progress in an harmonic way that allows the entire society to utilize technology and labor. In such case, many companies may compete on the best technological product, and adapt the software to their product. For example, cellular phones using Google’s Android Operating System could patent the chips in the cellphone, but others may use the same operating system in order to donate and help the development. Acknowledging software patents may incur costs on the millions who develop for no financial purpose, and they will have to seek legal counsel prior to even writing any software.

While we acknowledge that many companies may write to the registrar and call to protect what they perceive is their property, we know that the greater good could grow where software patents shall not exist.

For the reasons specified, we believe that no software patents shall be granted in Israel.