The Scope of Software Patent Protection in the Digital Age: Evidence from Alice

Information Systems Research, forthcoming

48 Pages Posted: 18 Nov 2020 Last revised: 7 Jun 2023

See all articles by Yu-Kai Lin

Yu-Kai Lin

Georgia State University - J. Mack Robinson College of Business

Arun Rai

Georgia State University - J. Mack Robinson College of Business

Date Written: June 6, 2023

Abstract

Software is the foundation of the digital economy. The scope of software patent protection and the social and private value of software patenting are hence central to recent policy debates. The landmark 2014 U.S. Supreme Court ruling in Alice Corp v. CLS Bank had a profound impact on software patenting, drastically narrowing the scope of patent protection on software innovation. We theorize and provide empirical evidence that a narrower scope of software patent protection is associated with a greater degree of open-source activities and improved sales in software firms. We also evaluate how individual firm’s ex ante software patent stock may moderate the proposed relationships. These findings offer insights into the roles of patent scope for software innovation in the digital economy and have important implications for the software patent and digital innovation literatures. They also have compelling implications for patent policies on software and software-related inventions, such as artificial intelligence, blockchains, cloud computing, and other emerging digital innovations.

Keywords: Software innovations, software patents, patent scope, Alice, natural experiment

Suggested Citation

Lin, Yu-Kai and Rai, Arun, The Scope of Software Patent Protection in the Digital Age: Evidence from Alice (June 6, 2023). Information Systems Research, forthcoming, Available at SSRN: https://ssrn.com/abstract=3703055 or http://dx.doi.org/10.2139/ssrn.3703055

Yu-Kai Lin (Contact Author)

Georgia State University - J. Mack Robinson College of Business ( email )

P.O. Box 4050
Atlanta, GA 30303-3083
United States

HOME PAGE: http://robinson.gsu.edu/profile/yu-kai-lin/

Arun Rai

Georgia State University - J. Mack Robinson College of Business ( email )

P.O. Box 4050
Atlanta, GA 30303-3083
United States

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