Microsoft, IBM executives defend software patents

Executives for IBM and Microsoft defended the value of software patents on Thursday, saying they are key to protecting their companies' competitive edge and innovation.

"We think software patents or patents that are implemented in software are important and valuable, and necessary to protect the investments that we make in research and development and to preserve our competitive advantage," Neil Abrams, vice president and assistant general counsel at IBM, told The Hill following a Thursday briefing hosted by BSA |The Software Alliance and National Association of Manufacturers on Capitol Hill about patents. "We think it's important for the American economy."

Microsoft General Counsel Brad Smith said various companies across the tech industry welcome opportunities to improve the patent system for software-related inventions, but warned against eliminating software patents.

"We think it would go too far to throw out software patents altogether," Smith said. "I think that would take the country's competitiveness a step backwards. It frankly would strengthen economies overseas, perhaps especially in China, so I think what we need is a balance."

Software patents have been criticized in recent years by venture capitalists that invest in social networking- and Web software-focused startups. Union Square Ventures Managing Partner Brad Burnham and Foundry Group Managing Director Bred Feld have spoken out against software patents. Union Square Ventures has invested in Twitter, Etsy and Foursquare, while Foundry Group invested in social gaming company Zynga.

Some investors have argued that young Web startups in their portfolios are vulnerable to lawsuits from so-called "patent trolls" looking to earn cash off spurious infringement claims, which stunts future innovation. They also contend that Web companies that develop software applications innovate at a breakneck pace, and that the parameters of the current software patent system are outdated and have failed to keep up with the fast-paced speed of the industry.

In a blog post published after Thursday's briefing, Smith said Microsoft supports specific reforms to the patent system, including "increasing transparency, curbing litigation abuse, and improving patent quality."

To crack down on patent trolls, Microsoft supports implementing a system in which a loser in a patent case would pay the attorney fees for the winning party.

"A technology-neutral 'loser pays' system for patent cases would force companies to internalize the strength of their case beforehand, deterring frivolous litigation," Smith writes.

Implementing this system would likely require legislation, Smith told The Hill.

Additionally, Smith said in the blog post that Microsoft has pledged to publish information on the Web about all the patents the company owns by April 1.

"Disclosure of the real party in interest for a particular patent reduces the likelihood of opportunistic behavior and gamesmanship, helping to facilitate licensing," Smith writes. "With transparency, we can help bring additional sunlight to the patent system."