Christina Mulligan, one of the authors of the report and a postdoctoral associate at Yale Law School, says that the main problem is that software patents are so broad and vague that they are essentially impossible to index, and that means they can't be searched efficiently. "It's because it is more or less impossible to search them that no-one does it, and even if you tried you'd probably only find 25 of the 50 patents your software may infringe," she explained. "It's cheaper just to cross your fingers and hope for the best."
And, she adds, since companies are likely to have to pay less if they accidentally infringe a patent than if they read a patent and then wilfully ignore it, the "cross your fingers and hope" strategy is probably the most rational strategy to adopt.
Of course this strategy inevitably leads to patent disputes, but many technology companies end up resolving them by coming to some cross-licensing agreement with the other party - just this month Apple and Taiwanese smartphone maker HTC halted their hostilities this way. But, before this happens, companies often spend considerable sums buying up patent portfolios that they can use as bargaining chips during negotiations.
And these defensive portfolios do nothing to protect against so-called non practicing entities (NPEs) or “patent trolls”, as they have become known. These NPEs manufacture nothing themselves, but buy up software patents with the sole purpose of making money from them by enforcing the patent rights against purported infringers. As they have no products of their own, they have no need to engage in cross licensing deals.
A possible solution to the problem uses the concept of “defensive patent aggregation”. Instead of individual companies spending cash to build up defensive patent portfolios, companies like California-based RPX buy up patents and make them available to their customers, who pay an annual subscription. John Amster, RPX's CEO, says that ultimately patent pooling companies could act like performance rights organizations such as American Society of Composers, Authors and Publishers (Ascap) do in the music industry. "We would like to see a mandated clearing house (for patents). Everyone should have to pay a reasonable price, and everyone could avoid having to pay outsized damages," he said.
Of course there are other solutions too, ranging from a complete overhaul of the patent system to more subtle changes such as the inclusion of laws that would allow companies to use an independent inventor defence – essentially meaning that an inventor could argue that they came up with the an idea on their own.
But, for the moment , the software patent perfect storm shows no sign of abating. The only likely winners are the patent attorneys.
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