High technology new ventures have played a major role in the creation and growth of today s economy. Information and communication technology (ICT) industries are among most innovative segments of modern economy. ”ICTs represent the backbone of the Digital Single Market (DSM), the completion of which is one of ten political priorities identified by the European Commission. The digital economy opens unprecedented business opportunities but it also raises new challenges in the context of intellectual property.”(Comino and Manenti, 2015)

Technological complexity results in fragmentation of IP and emergence of patent thickenes. ”A widely accepted measure for thickets, shows that patent thickets are mainly an ICT phenomenon, concentrated in several areas within electrical engineering. Even though the practical consequences of the pervasiveness of thickets are not easy to figure out, empirical contributions suggest that SMEs and companies needing to in-license technologies are the ones which are most likely to be harmed. In addition, thickets make searching for prior art more difficult, thus potentially reducing the quality of patents granted by Patent and Trademark Offices (PTOs).” (Comino and Manenti, 2015)

Recently we were asked whether it is possible to patent and protect software.

Patents are playing an increasingly important role in software, in 2010 there were 33% of applications filed at the EPO for protection a computer-implemented invention and the percentage is increasing. From 2007-2011 nearly 50 % of US lawsuits involved software-related patents and intellectual property rights are foundation of software industries. (Comino et.al, 2015) However, this field has gone through enormous changes in a last couple of years.  It is extremely challenging for companies to protect their ideas and software platforms and to assess the patentability requirements for software applications due to abstract nature of software algorithms. Besides it is difficult to classify as a specific form of IP, because it consists of many elements that can be addressed to different types of IP protection.

Software is certainly among the most important ICT products, with hardware it enables the development of the Digital Single Market (one of priorities of the European Commission); Innovation in the software industry is highly cumulative, usually in the process of development of a new computer program there is used code re-use. For example, is Darwin, the core program of Apple’s MAC OS X operating system. Darwin is made of more than seventeen million lines of code, most of which are taken from open source applications such as NetBSD, OpenBSD, FreeBSD (Comino and Manenti, 2014). Also, it has short product life-cycle, and most programs are quickly replaced by new applications. Abstraction of software technology makes it extremely difficult to know whether a given invention is truly different from previous ones, because different algorithms can be presented in different ways, and two apparently different algorithms may turn out to be equivalent

Software-related innovation can be protected by means of several IP right. In general, there are four types intellectual property rights relevant to software: patents, copyright, trademarks and trade secrets. Probably most used mechanism for protection are maintenance of internal confidentiality and copyright. Firms can use two or more protection mechanism to address needs of their company. ICT service industries, companies use trademarks and copyright intensively, on the other hand the occurrence and importance of patenting should not be overlooked. Depending on how the software is used with the hardware, can impact the type of protection you should choose. Whether you want to protect an algorithm, method, network, processing of data, software itself this all effects your possibilities to obtain patent protection.

COPYRIGHT

Digitalization created powerful new copying technologies such as file-sharing networks as well as CD- and DVD burners, has made it extremely easy to copy, duplicate, and exchange information goods such as software, music, films and books. High- tech products, databases and software programs are protected by copyright law.

Copyright protection expands to the particular form in which an idea is expressed. It does not expand to procedures, methods, mathematical concepts, In software, copyright law would protect the source and object code and original elements of the user interface. It is simple and it is automatic it lasts until 70 years after the death of the owner. The owner of copyrighted software program has certain exclusive rights. The owner can distribute copies to the public by license, sale or otherwise, create modified versions of the program, and freely use and copy it. The exclusive right to control duplication protects the owner of copyrighted software against the competition that would result from verbatim copying of the program’s code. Unlike patents, copyright law affords no protection to the ideas underlying the program. in Europe all ICT service industries, with the exception of wireless and satellite telecommunications activities, are copyright intensive. ‘’Copyright is granted by national laws and the geographical scope of protection is limited to the territory of the relevant member state.’’(Comino and Manenti, 2015)

PATENT

As source code is expressed in written form, it is therefore logical to define software as being subject to copyright protection as a literary work, but software does not consist solely of literal elements that is why the need for patentability emerges. Patens enable protection of function and practicability of the work. If something is novel, unique, practical, inventive than it can gain patent protection. Software patents can protect features of a program that cannot be protected under copyright or trade secret law( ideas, systems, methods, algorithms, functions,…) Computer Implemented Inventions (CIIs) are embedded into technological systems potentially belonging to any industrial area; therefore, in order to assess the exact magnitude of software patenting, researchers usually resort to keywords searches in the application documents.(Comino and Manenti,2015) For a software to be patentable it has to meet certain criteria:  (i) the invention must consist of patentable subject matter; (ii) the invention must be capable of industrial application (or, in certain countries, be useful); (iii) it must be new (novel); (iv) it must involve an inventive step (be non-obvious); and (v) the disclosure of the invention in the patent application must meet certain formal and substantive standards(WIPO). https://www.wipo.int/sme/en/documents/software_patents_fulltext.html

Patent protection gives the owner the right to exclude others from the marketing, selling, using the patented invention. Also it helps to attract investment partners. Small business and start-ups can gain more power and value on the market and establish business collaborations. Besides owner can license your patent for others to use it or sell it.

Even though that copyright protection is automatically granted and is free of charge if the invention is unique and original, it only protects literal copying of the source or object code.

On the other hand, ‘’most software patents are vague description of an idea without source code which create patent thickets – “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology.” (Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting). In this way, the system actually hinders innovation.’’ (Cosgrove, 2017). It is also pricey, some technical information about invention are publicly available, owner needs to be strongly prepared to defend patent, also it is a very time-consuming process to gain protection.

It is also important to note that patent requirements are not the same in all countries.

You might ask yourself the following questions.

  • What is unique about my software?
  • What is my software’s desired function?
  • How does the software handle information?
  • What is the user interface like?
  • What problems does my software solve?
  • What parts of my program do I want to protect with a patent?

TRADE SECRETS

Codes and ideas can be protected as trade secrets. It is not required to file an application. Trade secrets are not publicly available in comparison to patents and copyrights. It is very useful in cases of small software companies. The problem is that mostly likely only the source code can become a trade secret that means that software is very unlikely to be protected. Basically in order to claim trade secret protection part that we want to protect should not be visible to a user.

To increase the chance of software being protected as trade secret you should establish adequate electronic and physical security, use password, key cards, Also have employees sign confidentiality of non-confidentiality disclosure agreements, the same goes for business partners (third parties), mark the visible parts of software as confidential and so on.

OPEN SOURCE SOFTWARE

Open source software (OSS) has shaken up traditional view of IP rights in software.  Source code is made for using, reading, changing it or developing further versions of the program (Comino and Manenti, 2015) Main reason for that is to keep OSS open while stimulating access, collaborative development (sharing and re-use) and diffusion of programs.

Traditional use of IP rights in proprietary software on the contrary enables’ protection of developers from authorized use of their work through patents and copyright. Distribution of proprietary software in executable format which cannot be altered by humans and is unreadable offers extra protection. For software to be pronounced as open source it has to fulfil three conditions:

–          The program must include the source code of the software

–          The license must allow the licensee to modify the code and to develop derived works

–          The license shall not restrict any party from selling or giving the software away

        (Comino and Manenti, 2015)

To wrap it up:

Patentability of a software is possible, rather wide legal and technological problem that will certainly demand adaptations and changes in legal framework. It is one of the major issues discussed especially in Europe and US. One of the most interesting phenomena in the software industry is open source, which has to be more prudently investigated and managed.

Intellectual property as valuable asset needs to be well protected. One way to assure this is making developers in the company to sign IP assignment agreement, that is how you keep all products in your company. It is a field of constant changes, rights and proceedings differ in countries, so companies and developers should consult a specialist lawyer. File a copyright, patent protection or trade secrets, depending on which part of a software has to be protected. Re-think source code license which can weaken company’s trade secrets. Security is vital, so companies should achieve high level computing security, anti-piracy, anti-virus programs, regular validation of sensitive data to disable hackers to place malicious codes or viruses within a software are a necessity.

World Intellectual Property Organization. Patenting software.

https://www.wipo.int/sme/en/documents/software_patents_fulltext.html

Cosgrove J., 2017. The pros and cons of software patents. Blog Juristat.

https://blog.juristat.com/2016/12/5/the-pros-and-cons-of-software-patents

Comino S., Maneti F.M., 2015. Intellectual Property and Innovation in Information and Communication Technology (ICT). JRC SCIENCE AND POLICY REPORT.

https://publications.jrc.ec.europa.eu/repository/bitstream/JRC97541/jrc97541.pdf

Jedrusik A., 2017. Patent protection for software-implemented inventions. WIPO Magazine.

https://www.wipo.int/wipo_magazine/en/2017/01/article_0002.html

Gonzales A.G., 2008. IP and Software. WIPO MAGAZINE.

https://www.wipo.int/wipo_magazine/en/2008/06/article_0006.html

L.R.P.