Software innovations are critical to economic growth and job creation in the US, supporting over 55 million jobs and contributing $5.8 trillion to the economy. Software patent protection encourages innovation, collaboration, economic growth, and the ability to compete internationally. While some argue that software patents stifle innovation or prevent knowledge transfer, patents actually promote further innovation and an open innovation model by incentivizing collaboration and the integration of external knowledge. Patents are issued for inventive software solutions to unique problems, not for lines of code or algorithms alone, and weakening patent protection for software risks decreased investment and harming the competitive advantage of the US software industry.

1. Software innovations are a critical driver of
economic growth, exports, and job creation in the
U.S.
Support more than 55 million jobs
Contribute $5.8 trillion to the U.S. economy
IP-intensive industries, all of which depend on software-
implemented innovation:

2. Software patent protection =
innovation, collaboration, economic growth, ability to compete in
international markets
 The U.S. produces 80% of the world’s
software, making it the most advanced
software development country
 The majority of software-related patents go
to manufacturing companies that integrate
software into their products1

3. Software patents: Myth vs. Fact
Myth: Patents stifle innovation and foster monopolization in the software industry
Fact: The software industry continues to exhibit tremendous growth2, and start-
ups remain significant sources of innovation and product development.3 Market
share disbursement among major industry players is significantly greater in software
than in most other industries.4
Myth: Software-related patents prevent knowledge transfer
Fact: Patent applications have grown year-over-year, leading researchers to argue
that inventors value patents because they provide incentives to innovate further and
ultimately contribute to a system of open innovation.5 Patents are essential to the
open innovation model, which allows firms to integrate external knowledge into
their own research, ultimately enhancing efficiency and encouraging collaborative
efforts.6

4. Myth: Software is not patentable subject matter
Fact: The innovative element of the software patent isn’t the mathematical algorithm
itself, but the use of that algorithm to create a function that is new, useful, and
non-obvious.7 Software patents describe a different technology than of physical
inventions, and so it must be expected that software patents will use different terms.8
Myth: Patent rights should be reserved for inventions that, unlike software developments, are truly
revolutionary
Fact: Patents are not issued for the lines of code or mathematical algorithms themselves, but for
new and inventive solutions to unique problems. These solutions are no more incremental or
cumulative than those made in any other industry, including the semiconductor, chemical, and medical
device industries.9 The purpose of the U.S. patent system is to promote breakthroughs by facilitating
the broad dissemination of information and technology.10
Patents are issued for inventive solutions to unique
problems

5. If America weakens protection to software patents, decreased investment will
inevitably follow, eroding a competitive advantage in a sector that has proven vital
to the U.S. economy
Discrimination against any form of innovation that has become critical to
technological advancement makes no sense
We must celebrate America’s competitive advantage and the software-
implemented ideas that break substantial new ground by continuing to support
their patentability
Patent protection is critical for
software-implemented innovation

6. Citations
1 James E. Bessen & Robert M. Hunt, An Empirical Look at Software Patents, 16 J. Econ. & Mgmt. Strategy 157, 171 (2007).
2 Raymond Millien & Christopher George, The Patentability of Software: Myths, Facts and a Proposed Test, IPWATCHDOG.ORG (May 28, 2014), http://www.ipwatchdog.com/2014/05/28/the-
patentability-of-software-myths-facts-and-a-proposed-test/id=49792/
3 Ronald J. Mann, Do Patents Facilitate Financing in the Software Industry?, 83 Texas L. Rev. 961, 965-966 (2005), available at http://www.intertic.org/Policy%20Papers/Mann.pdf
4 David S. Evans, Policy and Programming: Government Preferences for Promoting Open Source Software, in Government Policy Toward Open Source Software, 34, 35 (Robert W. Hahn ed.,
2002).
5 Patrick Cohendet & Julien Pénin, Patents to Exclude vs. Include: Rethinking the Management of Intellectual Property Rights in a Knowledge-Based Economy, TECHNOLOGY INNOVATION
MANAGEMENT REVIEW (December 2011), http://timreview.ca/article/502
6 Jennifer Brant & Sebastian Lohse, The Open Innovation Model, INTERNATIONAL CHAMBER OF COMMERCE (2014), available at
https://www.google.com/url?q=http://www.iccwbo.org/Data/Documents/Intellectual-property/THE-OPEN-INNOVATION-MODEL/&sa=U&ved=0CAQQFjAAahUKEwj87NO_g-
_GAhUJMz4KHSWjDfM&client=internal-uds-cse&usg=AFQjCNHbXbRt2yo_kvYfx0UyQBuiiWmiuQ
7 Note, Everlasting Software, 125 Harv. L. Rev. 1454, 1460 (2012), available at http://cdn.harvardlawreview.org/wp-content/uploads/pdfs/vol125_everlasting_software.pdf
8 Dan L. Burk & Mark A. Lemley, Is Patent Law Technology-Specific, 17 Berkeley Tech. L. J. 1155, 1162-64 (2002)
9 David Kline, Do Patents Truly Promote Innovation?, IPWATCHDOG (APRIL 15, 2014), http://www.ipwatchdog.com/2014/04/15/do-patents-truly-promote-innovation/id=48768/
10 B. Zorina Kahn, THE DEMOCRATIZATION OF INVENTION: PATENTS AND COPYRIGHTS IN AMERICAN ECONOMIC DEVELOPMENT, 1790-1920, 29-30 (2005); see also B. Zorina Khan, Premium Inventions: Patents
and Prizes as Incentive Mechanisms in Britain and the United States, 1750-1930, in UNDERSTANDING THE SOURCES OF LONG RUN ECONOMIC GROWTH 205-234 (Dora L. Costa & Naomi Lamoreaux eds.,
2010), available at http://www.nber.org/chapters/c12000.pdf