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Cost of the patent system to governments

The massive cost of the patent system to governments is only a side issue. Whether the system is expensive or cheap doesn't change the harm it does.

But, for whom it would be of interest, here's where we'll put together the numbers of how much the patent system costs. This can help back up the argument that the patent system should only be applied where governments are absolutely sure it's a positive thing. For software, it's surely not.

USPTO costs zero?

From the USPTO's 2011 budget report:[1]

USPTO is a fully fee funded agency (with fee collections appropriated by the Congress), and does not rely on regular funding from the General Treasury.

Page 7 of that report also explains why there are budget problems: more patent holders aren't paying the maintenance fees (they're letting some patents go abandoned).

Will governments receive royalty bills?

State, local, and federal government agencies have been in the software business for a long time, longer than Microsoft, Apple, or Oracle. They have been writing programs that aid them in preforming the tasks that they have been commissioned to do by legislative bodies. These duties range from assessing property values, making payments and collecting taxes, to law enforcement, running hospitals for veterans and the space agency. The broad range of government functions and the length of time that they have been generating software has resulted in government agencies owning and using a large portfolio of software assets. It is unlikely that these government agencies have applied for and received patents on software they have created. Their large and diverse un-patented software portfolio is a huge liability for government and ultimately the tax payer, should any patent holder turn their attention to patent infringement by government.

Another liability may exist. Works created by federal government employees in the scope of their employment is public domain. Works created by local and state governments are subject to the property rights laws of the respective states, but are typically considered government property. Government agencies could theoretically be held negligent for failing to protect public property if they were "first to invent" but failed to acquire patents to protect that public property.

This also raises the question of the intent of congress regarding the patent-ability of software. If congress had intended software to be protected under patent laws, why did they not provide a stipulation for the protection intellectual property created by the government? Why did they not put policies in place to ensure that intellectual property created by the government did not become a liability?

Do some countries have legal exemptions for government?

...I thought I saw something about certain US government agencies being exempt.

It seems the US NSA isn't exempt. They pay licence fees to a Canadian company for encryption patents.[2]

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