Why Should a Software Company Consider Patenting its Inventions?

First, let’s begin by understanding what a patent is. A patent is an exclusive right granted by a public office (such as the USPTO – United States Patent and Trademark Office) for an invention, which can consist of a product or a process that generally provides a new way of doing something or offers a new technical solution to a problem.

But, what are the advantages of patent protection?

Certainly, patents provide companies with an exclusive right to prevent or stop others from commercially exploiting an invention for a period of time (usually 20 years from the filing date of the patent application). These exclusive rights allow companies to exclude others from using, reproducing, making, selling or importing the product or process for that limited time.

A patent owner may grant a license to a third party, which allows the former to obtain royalty payments and to still have property rights over the patented invention. Another possibility could be the company deciding not to exploit its invention and to sell it or to license the commercialization of the patented product to a business partner, as a source of income for the company owner of the patent.

Taking into consideration the return of investments, it doesn’t seem a bad idea, does it? After investing tons of money, time and human resources in developing new software, through exclusive patent rights the company may acquire a prestigious position in the market and also obtain higher returns on investments.

As long as patent portfolios are a clear proof of high level of specialization, expertise, innovation and technical knowledge, the company will project to potential investors a distinctive positive image, which will help to increase the company’s market value and will be extremely useful for fund-raising or for acquiring new business partnerships.

Human resources policies and the promotion of knowledge shouldn’t be neglected either. Patents provide incentives to employees by offering them recognition for their creativity and, sometimes, the possibility of material reward for their inventions. Likewise, the mandatory publication of patents facilitates the spread of new knowledge and accelerates innovation activities by avoiding the necessity to reinvent products that have already been invented by others. In other words, the public disclosure of the technical knowledge in the patent and the exclusive rights granted to its inventor promote the search for alternative solutions and improvements or innovation upon pre-existing technology, reducing costs and time in the process of development of new products.

There is a subject that should also be considered by software companies before getting into patent protection. There is a certain discrepancy regarding the possibility of filing a patent application for a “software-related invention”. Regulations and practices in this subject matter differ from one country or region to another. In some countries, patent laws demand that the invention must have a “technical character”, and in others, such requirement doesn’t exist and, consequently, software is generally patentable. In order to avoid any doubt about it, a software invention mustn’t include non-patentable elements (such as abstract ideas or mathematical theories) and must accomplish other patentability substantive criteria (such as novelty, inventiveness, industrial applicability and usefulness). But if patenting a software-related invention is not possible or is rejected for any reason, do not panic! There is always an alternative solution: copyright protection of computer programs as literary works. Many companies protect the object code of computer programs by copyright, while the source code is kept as a trade secret.

Despite what has been said above, seeking for patent protection of the company’s inventions is still highly recommended and advisable, as it may provide the company with additional income, prestige in the market and a way of recognizing its employees’ creativity. So, go for it! You have nothing to lose!

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