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Software Patents and Open Source: The Battle Over Intellectual Property Rights

Anne Layne-Farrar

Charles River Associates; Northwestern University

David S. Evans

University of Chicago Law School; University College London; Global Economics Group

Virginia Journal of Law and Technology, Forthcoming

In the wake of a series of court cases extending patents to software, open-source software proponents have proposed a number of arguments for limiting or even eliminating software patents. In particular, they claim that the U.S. Patent and Trademark Office has done a poor job of reviewing software patent applications, resulting in obvious, trivial patents. They also maintain that software patents hinder the standards setting process so important for high-technology industries and that patents will to lead to intellectual property rights "thickets" that slow down or stop the innovative process in the software industry. We evaluate these claims, examining relevant empirical evidence where available. While it is clear that problems exist with the patent-granting process, they do not rise to the level of justifying a ban on software patents. Instead, other reasonable - and far less drastic - measures are available. The USPTO has already begun reforms that should improve its software patent review process. As for patent thickets, theory suggests they could form in the software industry, but empirical evidence suggests that in fact they have not formed. Moreover, tools such as patent pools and cross-licensing that increase innovation sharing are available to limit the development of thickets. While the academic literature is still debating the link between patents and innovation, patents have been show to have some positive effects, including increased venture capital funding for small firms. In the end, reform is far more attractive than abolition because it retains the good while minimizing the bad.

Number of Pages in PDF File: 52

Keywords: Software patents, open source, intellectual property

JEL Classification: O34, O31, O38, O33, L86, K11

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Date posted: April 21, 2004  

Suggested Citation

Layne-Farrar, Anne and Evans, David S., Software Patents and Open Source: The Battle Over Intellectual Property Rights. Virginia Journal of Law and Technology, Forthcoming. Available at SSRN: http://ssrn.com/abstract=533442

Contact Information

Anne Layne-Farrar
Charles River Associates ( email )
1 South Wacker Drive
Suite 3400
Chicago, IL 60606
United States
312-377-9238 (Phone)
HOME PAGE: http://www.crai.com
Northwestern University ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
David S. Evans (Contact Author)
University of Chicago Law School ( email )
1111 E. 60th St.
Chicago, IL 60637
United States
University College London ( email )
London WC1E OEG
United Kingdom
Global Economics Group ( email )
1400 S. Dearborn, Suite 400
Chicago, IL 60603
United States
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