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A new initiative from the Electronic Frontier Foundation (EFF) seeks to do something about the state of software patents. The initiative, called Defend Innovation and announced earlier this week, highlights seven steps toward reform.

Software patents have been criticized in many quarters for such problems as stifling innovation, patenting commonly used techniques and processes, and dramatically raising the cost of defending technological innovation.

Lifespan, Patent Trolls

The EFF’s initiative does not suggest the most fundamental way to avoid the issues that software patents have engendered -- namely, by abolishing the software patent. In place of that approach, Defend Innovation calls for Congress to “commission a study and hold hearings to examine whether software patents actually benefit our economy at all.”

It also requests that Congress revise patent lifespans to no more than five years from the application date. If companies or individuals can show they independently arrived at the same software solution as a patent-holder, the initiative asks that they be allowed to avoid liability.

If plaintiffs whose business is to own patents and challenge others’ technology -- so-called “patent trolls" -- sue and fail in court, the EFF asks that they be required to cover the legal bills of those they sue. If they win, the initiative wants limited damages if the patent represents only a small piece of a product’s value.

The initiative calls for a new standard, in which patent applicants “should be required to provide an example of running software code for each claim in the patent.” It also requests that patents and licenses be made public “right away” and that public records be required to be up-to-date.

Higher Cost than R&D

As the software industry matures and evolves, the patents protecting software developments have grown increasingly abstract, such as a patent issued in the 1990s for software to manage a mutual fund. Observers have noted that the patent’s process steps, which were covered, included the steps issued by the Internal Revenue Service for avoiding taxes due on a partnership.

A 2011 study by Boston University researchers found that patent trolls, who build a large patent portfolio in order to litigate against a wide range of companies for infringement, have cost defendants US$ 500 billion since 1990.

In the four years prior to the study, the cost hit an average of US$ 83 billion a year. The researchers noted that this is the equivalent of 25 percent of all U.S. non-governmental research and development budgets. The report noted that more than 60 percent of all patent lawsuits involve software patents.

The EFF said that feedback from the Defend Innovation initiative will be incorporated into a whitepaper, which will be used in an effort to educate lawmakers and reform the system.

Founded in 1990 and based in San Francisco, the donor-funded Electronic Frontier Foundation works on issues surrounding technology, including those affecting free speech, privacy, innovation and consumer rights.