Software Startups: This Is How You Craft A Patent Strategy

By: Stephen Key

Obtaining patent protection for software is notoriously challenging. Software may have a very short shelf life. It’s difficult to describe precisely. There are issued patents that are written too broadly. In a 3-part series published in 2012, Eric Goldman goes in deep on how software innovations pose unique challenges to patent systems and what might be done about it. (For an alternative diagnosis, read retired software engineer Martin Goetz’ rebuttal.)

Perhaps it is no surprise that confusion reigns over what is eligible for patent protection today. Andrei Iancu, the new director of the United States Patent & Trademark Office, has spoken frequently and forcefully about this issue in recent months.

“In some areas of technology, it is unclear what is patentable and what is not, and that can depress innovation in those particular areas. Our plan at the PTO is to work within Supreme Court jurisprudence to try and provide better guidelines,” he said during a hearing before the House Judiciary Committee in late May.

Nonetheless, it is still possible to obtain patent protection for software. So, how do you get started? I’ve never brought a software related innovation to market, so I asked John Ferrell, my longtime Silicon Valley patent attorney, if I could pick his brain.

His firm Carr & Ferrell has represented many hundreds of software startups over the years. For much of the 1990s, it represented Apple Computer, along with their subsidiary software company at the time. Other notable software clients of his have included Adobe, Autodesk, Intuit, Oracle and Sega. He was Facebook's first intellectual property attorney. Sony Computer Entertainment (including PlayStation games) has been his client for nearly two decades. He is also an active technology investor. Read the second half of our interview here.

Ferrell told me he loves patents, because his passion is architecting monopolies — and patents are often the cornerstones of strong monopolies.

How important is intellectual property when launching a new innovation in the software space? (Attracting investors and potential partners, dealing with infringement, etc.)

It really depends on the innovation and the product. Some products in the software space are fleeting novelty items with a very short shelf life. Inventions specific only to that product may not be worth protecting. For example, a mobile game that relates to a movie character may be super-hot for a few months, but then can be expected to quickly fade. An invention related to the movement or actions of a specific character, although possible to patent, may not be worth the trouble of patenting.

Even if the patent application is accelerated and issues very quickly, it may not merit the effort if the product will likely fade before the year or so it takes to get the patent issued. (And there are often better ways to protect these kinds of software products, such as brand licensing of the movie character and copyright protection.)

For other products, however, patents can be critically important. Before software became patent eligible, there was an extremely competitive period beginning in the late 1980s when Microsoft put literally hundreds of significant software companies out of business within a few years.

One such company that comes to mind was a fairly large outfit called Software Publishing Corporation (SPC). SPC had the leading presentation software at the time, which was a program called Harvard Graphics. For most business people, Harvard Graphics was the standard for conference and conference room presentations. It sold for about a hundred dollars on floppy disks. There were many other presentation software programs at the time, but Harvard Graphics was the leader.

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