January 07, 2006

Japanese Software Patent Discussion

As I briefly mentioned a couple of months ago, a study group at the Japanese Ministry of Economics, Trade and Industry is discussing on how the worst harmful effects of software patents can be limited.

Below I present a translation of the executive summary of their October 2005 interim report.

"Software is structured in many layers, like operating system, middleware, and applications. Software on higher layers depends on software on lower layers. Therefore product development needs to use the functions of lower level software.

Also, software components work only by communicating with related software components (communication structure).

On the other side, if monopolistic structures advance to a certain level, there is a tendency for the users of the product dominating the market to act regardless of product quality and price, leading to lock-in.

The field of software has a layered structure, a communication structure, and a tendency to lock-in. In this field, granting of patents may lead to too strong monopolistic rights. Harming competition may easily lead to effects of braking innovation.

Therefore, while the majority of cases of asserting patent rights is in line with the essential meaning of the system, taking the above special characteristics into account we think that providing the environment for innovation in the software sector will lead to innovation with a real meaning.

The following legal measures come to mind for the near future. Make “Rules on Economic Transactions in the Market” that determine in which case asserting patent rights is an abuse of rights. For example, an assertion of patent rights that obstructs communication between software components, where the patent holder restricts transactions between third parties or asserts his patent right in a manner exceedingly contrary to public interest might qualify as “abuse of patent rights”.

As a reaction of industry an approach similar to Creative Commons might spread. The standard approach in industry should become a custom that as an agreement between private enterprises no one asserts patents in certain categories as open source software or interoperability.

As further points for study on the agenda the system of compulsory licensing and strengthening of antitrust countermeasures come to mind."

Update: have posted a short comment (PDF file, 13 pages in English) with some more detail and a discussion of the relation to TRIPS.

Posted by Karl-Friedrich Lenz at January 7, 2006 11:22 AM