The Software Patent Experiment

Robert M. Hunt

Senior Vice President and Associate Director of the Consumer Finance Institute

Q3 2004

Business Review — Over the past two decades, the scope of technologies that can be patented has been expanded to include many items previously thought unsuitable for patenting, for example, computer software.

Today, the U.S. Patent and Trademark Office grants 20,000 or more software patents a year. Conventional wisdom holds that extending patent protection to computer programs will stimulate research and development and, thus, increase the rate of innovation. In this article, Bob Hunt and Jim Bessen investigate whether this has, in fact, happened. They describe the spectacular growth in software patenting, who obtains patents, and the relationship between a sharp focus on software patenting and firms’ investment in R&D.

This article appeared in the Third Quarter 2004 edition of Business Review.

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