Software and Business Methods

Introduction

Computer technology plays an increasingly important role in our society today. It penetrates more and more areas of our life, not only in business environments but also in daily surroundings. A computer cannot operate without instructions. These instructions, so-called computer programs or software, may be incorporated in the computer or apparatus, but are often created, reproduced and distributed on media such as CD-ROMs or transmitted on-line.

Once created, it is often possible to reproduce software easily at very low cost. Thus, without appropriate protection against unauthorized copying and use, producers of software may not be able to recoup their investments. The unique nature of software is that it performs various functions through expressions written in computer language. Although copyright protects "literal expressions" of software, it does not protect the "concept" behind the software, which often is a core part of its commercial value. Since such concepts behind the software often provide technical functions such as controlling machines or processing data, program developers started seeking protection of software through the patent system.

However, due to the special characteristics of software innovation, some people consider that patent protection of software would inhibit competition in this field. It is said that software innovation typically involves cumulative, sequential development and re-use of others' work, and that the need to preserve interoperability between programs, systems and network components does not fit with the mechanisms of the patent system because the range of options available to the second comer may be constrained.

In recent years, another issue arose, namely the question of the patentability of business methods. Traditionally, business methods have been either in the public domain or protected under trade secret law. Today, however, information technology offers possibilities of applying new business models, using information technology as a tool for processing and transmitting various data and for communication. The Internet has provided new prospects of doing business on-line. Due to high economic stakes put on those new business methods and the expansion of e-commerce in our society, the debate on the opportunity of patenting business methods has continued at both the national and international levels.

Studies and Articles

Links on these pages, including those to studies commissioned for WIPO, do not imply the agreement of WIPO, its Member States or the International Bureau with the views expressed.

Date	Source	Title
2008	OECD	OECD Information Technology Outlook 2008
2008	OECD	OECD Science, Technology and Industry Outlook 2008
June 2004	IIPI	IIPI Report: Intellectual Property in the Indian Software Industry - Past Role and Future Need [PDF]
January 2004	OECD	Patents and Innovation: Trends and Policy Challenges
October 2003	WIPO	Intellectual Property on the Internet: A Survey of Issues
July 2003	Conseil d'analyse économique, France	Propriété intellectuelle (Jean Tirole; Claude Henry, Michel Trommetter et Laurence Tubiana; Bernard)
July 2002	Advisory Council on Intellectual Property (ACIP)	Consideration of a position on the patenting of business systems
November 2001	Trilateral Offices	Report on Concurrent Search Program using PCT Applications for Business Method-related Inventions Carried Out Under Trilateral Project B3a
2001	European Commission	Your Software and How to Protect It [PDF]
2000	Trilateral Offices	Report on Comparative Study Carried Out under Trilateral Project 24.2
October 2000	Report to the European Commission	Study: The Economic Impact of Patentability of Computer Programs [PDF]

Related Sites

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