USA / PATENT - COPYRIGHT / SOFTWARE

Promoting innovation in the software industry

Bruce Abramson

Boston University Journal of Science & Technology Law, Vol 8 No 1, Winter 2002

This article goes far wider than it seems at first sight. It starts from "first principles" in intellectual property matters and raises a number of issues applicable to intellectual property law reform. It argues that the existing system of software rights protection in the USA is inconsistent with the first principles of the intellectual property system. "Under the current regime, knowledge is hoarded, not shared." Copyright protection gives artists one sort of commercial opportunity; patent protection gives inventors another. But modern technology involves many different types and levels of innovation, which may not be sufficiently encouraged or rewarded under existing forms of protection. The article refers to the Manifesto concerning the Legal Protection of Computer Programs, produced in 1994 by a team of technologists and intellectual property scholars, and uses the Manifesto as a basis for comparison with the current regime, illustrating the ways in which different kinds of protection "could have led (and could still lead) to different configurations of the software industry". The article takes it as read that intellectual property rights exist solely to motivate innovation; discusses the basic economics of incentives; postulates a framework for analysis of a specific industry; applies the analysis to the software industry; and demonstrates, on the strength of this analysis, the "likely nett superiority of industry-tailored rights". In this connection, the author considers the potential advantages to society, as distinct from the innovator, of respectively a regime recognizing no private rights in the intellectual property sector, one having a weak system of protection and one having strong protection. At one extreme, innovation received minimal encouragement; at the other, rights "become so expansive that they block innovation": weakness and strength are determined by the "breadth, depth and length" of protection. As to the analytic framework, this consists, first, of characterizing the industry; second, of defining the protective regime; third, of calculating the potential return on private investment; and, fourth, of assessing the costs and benefits to society. Applied to the protection of computer software, the author draws attention to the elements of the innovation meriting protection (source code, object code, user interface); to the distinction between protection of the functional purpose of software and traditional copyright protection; and to the relationship between reverse engineering and the inadequate protection of underlying algorithms. From his comparison of the existing regime and the regime envisaged in the Manifesto, the author concludes that a reformed system would be likely to offer a substantial nett gain to society. More broadly, he concludes that the classic divisions of intellectual property rights, appropriate enough in the agrarian and industrial ages, "may be insufficient to deal with the complexities of the information age". [20082]