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Software patents and IP risk management

For software deverlopers, evidence arrived this week that the long term shift continues for more legal protection using patent law as well as copyright law.

World-wide, for software protection, there is more and more reliance on patent law. This Lightbulb blog has covered this trend in many articles (see the further reading list).

Software patent law developments have been led by United States developments. Our following summary draws on Intelletual Property, a 2007 book by U.S. copyright expert, Prof. Paul Goldstein:

Focusing on patent law to illustrate the notion of expansion, there has been a rise and rise of patent law in the US since about 1980. The pro-patent trend in the judiciary and legislators in the US since about 1980 contrasts to the anti-patent circumstances in American patent law in the 20th century prior to about 1980.

The fact that the latest news report, on the subject of software patent litigation, involves Nokia versus Apple, is therefore only part of an established and ongoing trend.

On the horizon there is no end to this trend for patents to join other fields of intellectual property law to be potential areas of legal risk for software developers.

Therefore dealing with patent law risks is a fundamental strategic need for software developers.

While Nokia, Apple and other corporate giants can afford gladitorial legal tussles, what's the recommended and affordable action item for software start-ups and small and medium-sized software enterprises?

Do a patent search to legally check the field into which your dream software will enter. Otherwise be prepared to be sued, especially if you ever make money.

I would never advise an investor to put money into a major software project if the patent position is not first checked. A software development business proposal with no budget for patent checks is a sign that its authors might be clueless about legal issues.

Lightbulb is therefore recommending that software developers commission thorough product legal risk assessment before applying lots of time, let alone substantial dollars, in software development.

Lawyers usually refer to this type of legal work as "due diligence". In our firm we prefer the term "risk management" as it at least has clear, codified and publicly available standards, eg AS/NZS ISO 31000:2009. In contrast, due diligence continues to be used on the "off the mainland" knowledge islands of lawyers and accountants. They do strange unspeakable things on those islands!

Risk management, to deal with patent and other legal obstacles for software developers, can begin with information gathering using simple fill-in forms we've developed over the years. Ours include:

  1. Invention Disclosure Statement
  2. Rights Clearance (Patent Application) Questionnaire
  3. Audit - Intellectual Property Questionnaire
  4. Intellectual Property Inventory
  5. Intellectual Property Register

Contact us if you'd like to use these.

Background information on the relevant software market and the specific software project and the program's specifications has to be gathered and assessed if potential infringement action is to be minimised. In simple terms it's about a software development team having some strategic fallback positions, instead of dreaming like fish in a bucket about to be shot by competitors or giants like Nokia and Apple.

After that background information is gathered, an appropriate patent search can be conducted. The software in development is then clothed for legal battle with a shield and/or sword.

  • Buy a legal shield: A software patent search and search results assessment checks if there is patent infringement, ie it buys a legal shield against patent infringement.
  • Buy a legal sword: It also determines if a patent application should be filed, both to protect the developer's back, as well as to assess if there is an opportunity to assert a legal claim that the dream software in development is novel or original. This helps determine if patent registration might be available, ie it buys a legal sword with which to defend and attack.

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