NationMaster - Encyclopedia: Software patent

Software patent does not have a universally accepted definition.^[1] One definition suggested by the Foundation for a Free Information Infrastructure is that a software patent is a "patent on any performance of a computer realised by means of a computer program".^[2]^[a] The Foundation for a Free Information Infrastructure or FFII is a lobbying association based in Munich, Germany. ...

There is intense debate over the extent to which software patents should be granted, if at all. Important issues concerning software patents include: There is heated debate as to whether and to what extent it should be possible to patent software and computer-implemented inventions as a matter of public policy. ...

Within the context of a national or multilateral body of law, an invention is patentable or, in other words, it satisfies the patentability requirements if it meets the legal conditions to be granted a patent. ... The inventive step and non-obviousness reflect a same general patentability requirement present in most patent laws, according to which an invention should be sufficiently inventive, i. ...

Background

A patent is a set of exclusionary rights granted by a state to a patent holder for a limited period of time, usually 20 years. These rights are granted to patent applicants in exchange for their disclosure of the inventions. Once a patent is granted in a given country, no person may make, use, sell or import/export the claimed invention in that country without the permission of the patent holder. Permission, where granted, is typically in the form of a license which conditions are set by the patent owner: it may be gratis or in return for a royalty payment or lump sum fee. For other uses, see Patent (disambiguation). ... For other uses, see State (disambiguation). ... To licence or grant licence is to give permission. ...

Patents are territorial in nature. To obtain a patent, inventors must file patent applications in each and every country in which they want a patent. For example, separate applications must be filed in Japan, China, the United States and India if the applicant wishes to obtain patents in those countries. However, some regional offices exist, such as the European Patent Office (EPO), which act as supranational bodies with the power to grant patents which can then be brought into effect in the member states, and an international procedure also exists for filing a single international application under the Patent Cooperation Treaty (PCT), which can then give rise to patent protection in most countries. A patent application is a request pending at a patent office for the grant of a patent for the invention described and claimed by that application. ... The European Patent Organisation (EPO or EPOrg in order to distinguish it from the European Patent Office, which is the main organ of the organisation) is an international organisation set up by the European Patent Convention. ... The Patent Cooperation Treaty (PCT) provides a unified procedure for filing patent applications to protect inventions internationally. ...

These different countries and regional offices have different standards for granting patents. This is particularly true of software or computer-implemented inventions, especially where the software is implementing a business method.

History and current trends

Early example of a software patent

On 1962-05-21, a British patent application entitled "A Computer Arranged for the Automatic Solution of Linear Programming Problems" was filed.^[6] The invention was concerned with efficient memory management for the simplex algorithm, and may be implemented by purely software means. The patent was granted on August 17, 1966 and seems to be one of the first software patents.^[7] Year 1962 (MCMLXII) was a common year starting on Monday (the link is to a full 1962 calendar) of the Gregorian calendar. ... is the 141st day of the year (142nd in leap years) in the Gregorian calendar. ... In mathematics, linear programming (LP) problems involve the optimization of a linear objective function, subject to linear equality and inequality constraints. ... In computer science and applications, out-of-core refers to algorithms which process data that is too large to fit into a computers main memory at one time. ... In mathematical optimization theory, the simplex algorithm, created by the American mathematician George Dantzig in 1947, is a popular technique for numerical solution of the linear programming problem. ...

United States

The United States Patent and Trademark Office has granted patents that may be referred to as software patents since at least the early 1970s.^[8] In 1972, the United States Supreme Court ruled that a patent for a process should not be allowed if it would "wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself", adding that "it is said that the decision precludes a patent for any program servicing a computer. We do not so hold."^[9] In 1981, the Supreme Court stated that "a claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program, or digital computer" and a claim is patentable if is contains "a mathematical formula [and] implements or applies the formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect".^[10] Image File history File links Software_patents2. ... Image File history File links Software_patents2. ... This article relates to the patentability of software and computer programs, or in other words software patents, under United States patent law. ... PTO headquarters in Alexandria The United States Patent and Trademark Office (PTO or USPTO) is an agency in the United States Department of Commerce that provides patent and trademark protection to inventors and businesses for their inventions and corporate and product identification. ... The Supreme Court Building, Washington, D.C. The Supreme Court Building, Washington, D.C., (large image) The Supreme Court of the United States, located in Washington, D.C., is the highest court (see supreme court) in the United States; that is, it has ultimate judicial authority within the United States...

Due to different treatment of federal patent rights in different parts of the country, in 1982 the U.S. Congress created a new court (the Federal Circuit) to hear patent cases. Following several landmark decision by this court, by the early 1990s the patentability of software was well established, and in 1996 the USPTO issued Final Computer Related Examination Guidelines stating that "A practical application of a computer-related invention is statutory subject matter. This requirement can be discerned from the variously phrased prohibitions against the patenting of abstract ideas, laws of nature or natural phenomena" (emphasis added).^[11] The United States Court of Appeals for the Federal Circuit, or simply the Federal Circuit, was founded in 1982 to combine similar federal cases to a specialized appellate court. ...

The recent expansion of the Internet and e-commerce has led to many patents being applied for and being granted for business methods implemented in software and the question of whether business methods are statutory subject matter is a separate issue from the question of whether software is. There have been several successful enforcement trials in the USA, some of which are listed in the list of software patents article. Electronic commerce, EC, e-commerce or ecommerce consists primarily of the distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks. ... Business method patents are a class of patents and one of many legal aspects of business. ... Notable software patents include: RSA Patent - a famous software patent on the ground-breaking and highly unobvious algorithm for public key encryption, widely used for secure communications in many industries nowdays (RSA) Karmarkar Patent - a famous software patent on the highly non-trivial mathematical algorithm for solving linear programming problems...

Europe

Within European Union member states, the EPO and other national patent offices have issued many patents for inventions involving software since the European Patent Convention (EPC) came into force in the late 1970s. Article 52 EPC excludes "programs for computers" from patentability (Art. 52(2)) to the extent that a patent application relates to a computer program "as such" (Art. 52(3)). This has been interpreted to mean that any invention which makes a non-obvious "technical contribution" or solves a "technical problem" in a non-obvious way is patentable even if that technical problem is solved by running a computer program.^[12] Even though the European Patent Convention and its Article 52 excludes the patentability of programs for computers as such, that does not mean that all inventions including some software are de jure not patentable. ... The Convention on the Grant of European Patents of 5 October 1973, commonly known as the European Patent Convention (EPC), is a multilateral treaty instituting the European Patent Organisation and providing an autonomous legal system according to which European patents are granted. ... The Convention on the Grant of European Patents of 5 October 1973, commonly known as the European Patent Convention (EPC), is a multilateral treaty instituting the European Patent Organisation and providing an autonomous legal system according to which European patents are granted. ...

Computer-implemented inventions which only solve a business problem using a computer, rather than a technical problem, are considered unpatentable as lacking an inventive step (see T 258/03). Nevertheless, the fact that an invention is useful in business does not mean it is not patentable if it also solves a technical problem. Headwords T 258/03, also known as Auction Method/Hitachi, is a decision of a Technical Board of Appeal of the European Patent Office (EPO), issued on April 21, 2004. ...

United Kingdom

United Kingdom patent law is interpreted to have the same effect as the European Patent Convention such that "programs for computers" are excluded from patentability to the extent that a patent application relates to a computer program "as such". Current case law in the UK states that an (alleged) invention will only be actually regarded as an invention if it provides a contribution that is not excluded and which is also technical. A computer program implementing a business process is therefore not an invention, but a computer program implementing an industrial process may well be. Globally, the extent to which patent law should allow the granting of patents involving software (software patents) is controversial (see Software patent debate). ... The Convention on the Grant of European Patents of 5 October 1973, commonly known as the European Patent Convention (EPC), is a multilateral treaty instituting the European Patent Organisation and providing an autonomous legal system according to which European patents are granted. ...

Japan

Software-related inventions are patentable. To qualify as an invention, however, there must be "a creation of technical ideas utilizing a law of nature" although this requirement is typically met by "concretely realising the information processing performed by the software by using hardware resources".^[13] Software-related inventions may be considered obvious if they involve: the application of an operation known in other fields; the addition of a commonly known means or replacement by equivalent; the implementation in software of functions which were previously performed by hardware; or the systematisation of known human transactions. ^[14]

Other countries

In India, a clause to include software patents was quashed by the Indian Parliament in April 2005.^[15] The Parliament of India is bicameral. ...

In Australia, pure or abstract methods of doing business are not considered to be patentable, but if the method is implemented using a computer, it avoids the exclusion for business methods.^[16]

Patentable subject matter

Patents are intended to promote innovation by encouraging the timely disclosure of how to make and use inventions and by protecting investments made to commercialize inventions. They attempt to accomplish this by requiring that a prompt and full disclosure is made by an inventor of how to make and use his/her/their invention and by granting a monopoly right for a limited period of time to a patent owner to prevent others from making, using or selling the invention in exchange for said prompt and full disclosure.[2] Within the context of a national or multilateral body of law, an invention is patentable or, in other words, it satisfies the patentability requirements if it meets the legal conditions to be granted a patent. ...

There is debate as to whether or not these aims are achieved with software patents. There is heated debate as to whether and to what extent it should be possible to patent software and computer-implemented inventions as a matter of public policy. ...

Proposals

In seeking to find a balance, different countries have different policies as to where the boundary between patentable and non-patentable software should lie. In Europe, a number of different proposals for setting a boundary line were put forward during the debate concerning the proposed Directive on the patentability of computer-implemented inventions, none of which were found acceptable by the various parties to the debate. Two particular suggestions for a hurdle that software must pass to be patentable include: The European Union (EU) Directive on the patentability of computer-implemented inventions (2002/0047/COD) was a proposal for an EU law which aimed to harmonise EU national patent laws and practices, which involved the granting of patents for computer-implemented inventions provided they meet certain criteria. ...

In the US, Ben Klemens, a Guest Scholar at the Brookings Institution, proposed that patents should be granted only to inventions that include a physical component that is by itself nonobvious.^[19] This is based on Justice William Rehnquist's ruling in the U.S. Supreme Court case of Diamond v. Diehr that stated that "... insignificant postsolution activity will not transform an unpatentable principle into a patentable process." By this rule, one would consider software loaded onto a stock PC to be an abstract algorithm with obvious postsolution activity, while a new circuit design implementing the logic would likely be a nonobvious physical device. Upholding an "insignificant postsolution activity" rule as per Justice Rehnquist's ruling would also eliminate most business method patents. The Brookings Institution is a United States nonprofit public policy think tank based in Washington, D.C.. Described in 1977, by TIME magazine as as the nations pre-eminent liberal think tank,[1] the institution is devoted to public service through research and education in the social sciences, particularly... William Hubbs Rehnquist (October 1, 1924 â€“ September 3, 2005) was an American lawyer, jurist, and a political figure who served as an Associate Justice on the Supreme Court of the United States and later as the Chief Justice of the United States. ... Holding A machine controlled by a computer program was patentable. ... William H. Rehnquist has served as the Chief Justice of the United States since 1986. ... Business method patents are a class of patents and one of many legal aspects of business. ...

Obviousness

A common objection to software patents is that they relate to trivial inventions.^[20] A patent on an invention that many people would easily develop independently of one another should not, it is argued, be granted since this impedes development. Different countries have different ways of dealing with the question of inventive step and non-obviousness in relation to software patents. The inventive step and non-obviousness reflect a same general patentability requirement present in most patent laws, according to which an invention should be sufficiently inventive, i. ...

Inventive step test in Europe

See Inventive step requirement in Europe and, for instance, T 258/03. Even though the European Patent Convention and its Article 52 excludes the patentability of programs for computers as such, that does not mean that all inventions including some software are de jure not patentable. ... Headwords T 258/03, also known as Auction Method/Hitachi, is a decision of a Technical Board of Appeal of the European Patent Office (EPO), issued on April 21, 2004. ...

Perceived negative effects

Compatibility

There are a number of high profile examples where the patenting of a data exchange standards forced another programming group to introduce an alternative format. For instance, the PNG format was introduced to avoid the GIF patent problems, and the Ogg Vorbis format was introduced to avoid the MP3 patent problems. If it is discovered that these new suggested formats are themselves covered by existing patents, the final result may be a large number of incompatible formats. Creating such formats and supporting them costs money, creates inconvenience to users and even threatens to split the Internet into several partially incompatible sub-networks (ASF and non-ASF, for example). PNG (Portable Network Graphics), sometimes pronounced as ping, is a relatively new bitmap image format that is becoming popular on the World Wide Web and elsewhere. ... GIF redirects here. ... Ogg is an open standard for a free container format for digital multimedia, unrestricted by software patents and designed for efficient streaming and manipulation. ... Vorbis is an open source, lossy audio codec project headed by the Xiph. ... For other uses, see MP3 (disambiguation). ... Advanced Systems Format (formerly Advanced Streaming Format, Active Streaming Format) is Microsofts proprietary digital audio/digital video container format, especially meant for streaming media. ...

Conflicts

Computer-implemented invention (CII)

A microsite of the EPO website states that a generally accepted and widely used definition of a CII is "an invention whose implementation involves the use of a computer, computer network or other programmable apparatus, the invention having one or more features which are realised wholly or partly by means of a computer program."^[21] A similar definition is provided by The Guidelines for Examination at the EPO.^[22] Even though the European Patent Convention and its Article 52 excludes the patentability of programs for computers as such, that does not mean that all inventions including some software are de jure not patentable. ...

The EPO, in contrast, deny that they grant software patents.^[23] They further argue that the term software patent is itself a misleading concept since it could imply that an invention must be in the form of software to count as a CII. The case law of the EPO^[24] and various national courts in Europe^[25] states that a computer program cannot be patented in the guise of an object or as hardware if the underlying invention is still a computer program as such. Computer-implemented invention also covers inventions relating to computer control of processes external to a computer, such as ABS braking systems. Such inventions are not caught by many definitions of software patent, such as the one proposed by the FFII.^[2] The Foundation for a Free Information Infrastructure or FFII is a lobbying association based in Munich, Germany. ...

Additionally, the EPO do not grant patents to all computer-implemented inventions since they must still provide a technical solution to a technical problem to be viewed as being inventive, whereas the term software patent implies a granted patent. Nevertheless, the fact that the EPO deem that many software-related patent applications describe inventions is a point of contention. Even though the European Patent Convention and its Article 52 excludes the patentability of programs for computers as such, that does not mean that all inventions including some software are de jure not patentable. ...

Overlap with copyright

Protection by patent protection and copyright constitute two different means of legal protection which may cover the same subject-matter, such as computer programs, since each of these two means of protection serves its own purpose. ^[26] Software is protected as works of literature under the Berne Convention, thus any software written is automatically covered by copyright. This allows the creator to prevent another entity from copying the program and there is generally no need to register code in order for it to be copyrighted. For the treaty establishing the General Postal Union, see Treaty of Bern. ... Not to be confused with copywriting. ...

Patents, on the other hand, give their owners the right to prevent others from using a claimed invention, even if it was independently developed and there was no copying involved. In fact, one of the most recent EPO decisions T 424/03 clarifies the distinction, stating that software is patentable, because it is basically only a technical method executed on a computer, which is to be distinguished from the program itself for executing the method, the program being merely an expression of the method, and thus being copyrighted.

Patents cover the underlying methodologies embodied in a given piece of software, or the function that the software is intended to serve, independent of the particular language or code that the software is written in. Copyright prevents the direct copying of some or all of a particular version of a given piece of software, but do not prevent other authors from writing their own embodiments of the underlying methodologies. Copyright can also be used to prevent a given set of data from being copied while still allowing the author to keep the contents of said set of data a trade secret. A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers. ...

Free and open source software

There is tremendous animosity in the free software community towards software patents. Much of this has been caused by free software/open source projects shutting down^[27] when the holders of patents covering aspects of a project demanded license fees that the project could not or was not willing to pay or offered licenses under terms which the project was unwilling to accept, or could not accept because it conflicted with the free software licence in use.^[28] Opposition to software patents is widespread in the free software community. ... There is heated debate as to whether and to what extent it should be possible to patent software and computer-implemented inventions as a matter of public policy. ... // The free software community is also called the open source community or the Linux community. ... Free software is software that can be used, studied, and modified without restriction, and which can be copied and redistributed in modified or unmodified form either without restriction, or with minimal restrictions only to ensure that further recipients can also do these things. ... Open source refers to projects that are open to the public and which draw on other projects that are freely available to the general public. ... A free software licence is a software licence which grants recipients rights to modify and redistribute the software which would otherwise be prohibited by copyright law. ...

Several patent holders have offered royalty-free patent licenses. Companies that have done this include IBM, Microsoft, Nokia, Novell,^[29] Sun Microsystems and Unisys. Such actions have rarely appeased the free/open source software community for reasons such as fear of the patent holder changing their mind or problems with some of the license terms.^[30] For other uses, see IBM (disambiguation) and Big Blue. ... Microsoft Corporation, (NASDAQ: MSFT, HKSE: 4338) is a multinational computer technology corporation with global annual revenue of US$44. ... This article is about the telecommunications corporation. ... For the road bicycle racing team previously known as Novell, see Rabobank (cycling). ... Sun Microsystems, Inc. ... Unisys Corporation (NYSE: UIS), based in Blue Bell, Pennsylvania, United States, and incorporated in Delaware[3], is a global provider of information technology services and solutions. ... The open source movement is an offshoot of the free software movement that advocates open-source software as an alternative label for free software, primarily on pragmatic rather than philosophical grounds. ...

In 2005 Sun Microsystems announced that they were making a portfolio of 1,600 patents available through a free software/open-source-type patent license called Common Development and Distribution License.^[31]. This was criticized by the free/open source software community, however, since it did not release the source code under a free/open source software license^[32] Sun Microsystems, Inc. ... Free software is software which grants recipients the freedom to modify and redistribute the software. ... An open-source license is a copyright license for computer software that makes the source code available under terms that allow for modification and redistribution without having to pay the original author. ... Common Development and Distribution License (CDDL) is an open source and Free software license, produced by Sun Microsystems, based on the Mozilla Public License (MPL), version 1. ...

In 2006, Microsoft's patent pledge not to sue Novell Linux customers, openSUSE contributors, and free/open source software developers^[33] and the associated collaboration agreement with Novell^[34] was met with disdain from the Software Freedom Law Center^[35] while commentators from the Free Software Foundation stated that the agreement would not comply with GPLv3.^[36]^[37] This article is about operating systems that use the Linux kernel. ... openSUSE is a community project, sponsored by Novell, to develop and maintain a general purpose Linux distribution. ... The Software Freedom Law Center logo, a pun on the Ctrl key of most keyboards The Software Freedom Law Center (SFLC) was launched in February 2005 with Eben Moglen as Chairman. ... GPL redirects here. ...

Draft versions of the GNU GPL version 3 may also conflict with patents on software by preventing any patent holder from enforcing their patents against a user if said patent holder also distributes software covered by those patents under the GPL.^[38] GPL redirects here. ...

General software developer unhappiness

In the late 1990s, Unisys claimed to have granted royalty free licenses to hundreds of not-for-profit organizations that used the patented LZW compression method and, by extension, the GIF image format. However, this did not include most software developers and Unisys were "barraged" by negative and "sometimes obscene" emails from software developers.^[39] LZW (Lempel-Ziv-Welch) is an implementation of a lossless data compression algorithm created by Abraham Lempel and Jacob Ziv. ... GIF redirects here. ...

Jurisdictions

Substantive law regarding the patentability of software and computer-implemented inventions, and case law interpreting the legal provisions, are different under different jurisdictions. For other uses, see Law (disambiguation). ... Case law (also known as decisional law) is that body of reported judicial opinions in countries that have common law legal systems that are published and thereby become precedent, i. ...

Software patents under multilateral treaties: Multilateralism is an international relations term that refers to multiple countries working in concert. ... The first two pages of the Treaty of Brest-Litovsk, in (left to right) German, Hungarian, Bulgarian, Ottoman Turkish and Russian A treaty is an agreement under international law entered into by actors in international law, namely states and international organizations. ...

Software patents under national laws: The WTOs Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPs Agreement, and particularly its Article 27, and whether software and computer-implemented inventions are considered as a field of technology are important elements in the discussion of the international legal framework of the patentability of software... Even though the European Patent Convention and its Article 52 excludes the patentability of programs for computers as such, that does not mean that all inventions including some software are de jure not patentable. ... There are two provisions in the Regulations [1] annexed to the Patent Cooperation Treaty (PCT) that relate to the search and examination of patent applications concerning computer programs. ...

This article relates to the patentability of software and computer programs, or in other words software patents, under United States patent law. ... Globally, the extent to which patent law should allow the granting of patents involving software (software patents) is controversial (see Software patent debate). ...

Litigation

Several successful litigations show that software patents are enforceable in the US. See List of software patents for more examples. Notable software patents include: RSA Patent - a famous software patent on the ground-breaking and highly unobvious algorithm for public key encryption, widely used for secure communications in many industries nowdays (RSA) Karmarkar Patent - a famous software patent on the highly non-trivial mathematical algorithm for solving linear programming problems...

Similarly in Japan, software patents have been successfully enforced. In 2005, for example, Matsushita won a court order barring Justsystem from infringing Matsushita's Japanese patent 2,803,236 covering word processing software. A Tokyo court ordered Justsystem to pull their product from the market. On September 30th 2005, Intellectual Property High Court of Japan, which was newly formed in April 2005, granted Justsystems’ appeal. The original decision by the Tokyo District Court was overturned in October 2005.^{[citation needed]} Logo for the Panasonic brand Matsushita Electric Industrial Co. ... Justsystem (ã‚¸ãƒ£ã‚¹ãƒˆã‚·ã‚¹ãƒ†ãƒ ) is a major Japanese software development house. ...

Licensing

Patenting software is widespread in the US. As of 2004, approximately 145,000 patents had issued in the 22 classes of patents covering computer implemented inventions. (see table to the right). To licence or grant licence is to give permission. ... Image File history File links Download high-resolution version (626x742, 145 KB) // Table of US computer patents issued by class of invention as of 2004. ... Image File history File links Download high-resolution version (626x742, 145 KB) // Table of US computer patents issued by class of invention as of 2004. ...

Many software companies cross license their patents to each other. These agreements allow each party to practice the other party's patented inventions without the threat of being sued for patent infringement. Often, there is no payment of any royalties between the parties. Microsoft, for example, has agreements with IBM, Sun Microsystems, SAP, Hewlett-Packard, Siemens AG, Cisco, Autodesk^[40] and recently Novell. Microsoft cross-licensed its patents with Sun, despite being direct competitors, and with Autodesk even though Autodesk has far fewer patents than Microsoft. In patent law, a cross-licensing agreement is an agreement according to which two parties grant a license to each other for the exploitation of the subject-matter claimed in patents. ... The examples and perspective in this article or section may not represent a worldwide view. ... Microsoft Corporation, (NASDAQ: MSFT, HKSE: 4338) is a multinational computer technology corporation with global annual revenue of US$44. ... For other uses, see IBM (disambiguation) and Big Blue. ... Sun Microsystems, Inc. ... SAP AG (ISIN: DE0007164600, FWB: SAP, NYSE: SAP) is the largest European software enterprise and the third largest in the world, with headquarters in Walldorf, Germany. ... The Hewlett-Packard Company (NYSE: HPQ), commonly known as HP, is a very large, global company headquartered in Palo Alto, California, United States. ... Siemens redirects here. ... â€œCiscoâ€ redirects here. ... Autodesk, Inc. ... For the road bicycle racing team previously known as Novell, see Rabobank (cycling). ...

The ability to negotiate cross licensing agreements is a major reason that many software companies, including those providing open source software, file patents. As of June 2006, for example, Red Hat has developed a portfolio of 6 issued US patents, 1 issued European patent, 13 pending US patent applications, and 25 pending international PCT (Patent Cooperation Treaty) patent applications. Red Hat uses this portfolio to cross license with proprietary software companies so that they can preserve their freedom to operate.^[41] Open source refers to projects that are open to the public and which draw on other projects that are freely available to the general public. ... For other uses, see Red Hat (disambiguation). ... A patent portfolio is a collection of patents filed and owned by a single inventor or corporation that may be related or unrelated. ... The Patent Cooperation Treaty (PCT) provides a unified procedure for filing patent applications to protect inventions internationally. ...

Many software patent holders license their patents in exchange for monetary royalties. Some patent owners, such as IBM, are in the business of selling the products they patent and view licensing as a way to increase the return on their investment in innovation. IBM generates an additional $US 2 billion per year by licensing.^[42] This article or section does not adequately cite its references or sources. ...

Other patent holders are in the business of inventing new computer implemented inventions and then commercializing the inventions by licensing the patents to other companies that manufacture the inventions. Walker Digital, for example, has generated a large patent portfolio from its research efforts, including the basic patent on the Priceline.com reverse auction technology. US universities also fall into this class of patent owners. They collectively generate about $1.4 billion per year through licensing the inventions they develop to both established and start up companies in all fields of technology, including software.^[43] Walker Digital is an American corporation devoted to building web-based businesses based in Stamford, Connecticut, . Started in 1998 by entrepreneur Jay Walker, it is the parent company of many web-based companies. ... Priceline. ...

Still other patent holders focus on obtaining patents from original inventors and licensing them to companies that have introduced commercial products into the marketplace after the patents were filed. Some of these patent holders, such as Intellectual Ventures, are privately held companies financed by large corporations such as Microsoft, Intel, Google, etc. Others, such as Acacia Technologies, are publicly traded companies with institutional investors being the primary shareholders.^[44] Intellectual Ventures is a private company founded in 2000 to invest in pure invention. ... Intel Corporation (NASDAQ: INTC, SEHK: 4335), founded in 1968 as Integrated Electronics Corporation, is an American multinational corporation that is best known for designing and manufacturing microprocessors and specialized integrated circuits. ... This article is about the corporation. ... Acacia Technologies is used loosely to refer to Acacia Research Corporation and its subsidiary Acacia Media Technologies. ...

The practice of acquiring patents merely to license them is controversial in the software industry. Companies that have this business model are pejoratively referred to as patent trolls. It is an integral part of the business model that patent licensing companies sue infringers that do not take a license. Furthermore, they may take advantage of the fact that many companies will pay a modest license fee (e.g.$100,000 to $1,000,000) for rights to a patent of questionable validity, rather than pay the high legal fees ($2,000,000 on up) to demonstrate in court that the patent is invalid. Patent troll is a pejorative term used for a person or company that enforces its patents against one or more alleged infringers in a matter considered unduly aggressive or opportunistic (see List of patent trolls for examples). ...

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