Software patents: foolish business

Most people understand the origins and rationale of ordinary industrial patents. They give, say, a pharmaceutical company which has spent a fortune developing a new drug a window to profit from its investment before the rest of the world can make cheaper versions. But software patents, though legally similar, are very different in practice. Google's $12.5bn purchase of Motorola's mobile phone activities last week caused a stir in the business and technology worlds alike, because the reason for it was not to acquire Motorola's phones but its portfolio of up to 17,000 "software patents", which have become the gold dust of the digital age.

Patents are now a multibillion-dollar industry in which companies find it more attractive to make money suing each other for infringement than actually making things. Until the mid-1990s the computer industry – including Microsoft – was opposed to such licensing. This was mainly because the industry was so innovative without the protection of patents, which in any case involved often quite trivial advances in technology that were regarded as a standard part of an engineer's work...