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Gathering the foam: are business method patents a deterrent to software innovation and commercialization?

journal contribution
posted on 2023-06-07, 23:16 authored by Puay Tang, Dan Pare
In an environment widely described as a 'pro-patent era' and in the light of vigorous debates over business method patents, this article discusses how the issuance of these software-based patents could be, paradoxically, a state-sanctioned deterrent to software innovation and commercialization. It also questions if these patents fit the 'economic reality' of the software market. Empirical data on how European Internet-based software companies regard these patents are drawn from a recent study on Patent Protection of Computer Software Programs conducted for the European Commission. The paper concludes that there are grounds to interrogate the view that stronger rights will inevitably lead to a more innovative and competitive industry for three main reasons. The first is that software is a cumulative systems technology made up of multiple and incremental steps. The second is that stronger rights could jeopardize the ease of entry and detract attention from the right course of policy action with respect to intellectual property protection of software. Third, smaller firms, which make up the majority of software producers do not, on the overall, patent for competitiveness reasons nor do they readily regard patents as a stimulus for innovation.


Publication status

  • Published


International Review of Law Computers and Technology




Taylor and Francis





Page range




Department affiliated with

  • SPRU - Science Policy Research Unit Publications


The prevailing orthodoxy in a pro-patent era is that stronger IPRs boost innovation., This proposition is questioned in the paper for the controversial case of business software patents. On several grounds the strengthening of business software patents might prove inimical to innovation in this industry. Dr Tang led the research and drafted the paper with the support of a research assistant

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