Intellectual property in software development

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Common sense says that you need to do whatever you can to protect your business against competitors, especially those who are likely to copy your ideas and cut into your market.

The question is: is it always a good idea to do this by applying for a patent?

A recent panel discussion hosted at the Innovation Hub in Pretoria on Commercialising Intellectual Property debunked many of the myths around patents, especially for small businesses. Naturally, the need for a patent depends on the industry you are in. In certain industries it is unavoidable, but in others, the case is less clear.

Rapelang Rabana, a Cape Town entrepreneur who has created a number of software-based businesses, had the following pearls of wisdom to share with entrepreneurs developing code:

Pursuing a patent is not necessarily the best route to follow. The process is expensive, and for companies starting out it is more important to build a system that satisfies a need. Should a patent become a necessity, you can always hire a patent lawyer once you have the financial clout to do so.

When starting out, rather focus on protecting your source code and presence in the market by securing a trademark on your brand or product name. Protecting your source code can be done simply by explicitly transferring this intellectual property into the company's name. This should be done for any code produced by both the founders and staff.

Protect the source code. Physical protection of the source code can be done quite simply by ensuring it is always behind a firewall and denying access to this code, even investors.

Existing or new patents can be overridden by changing seven simple things in your product. Rabana decided to proceed with the development of her company's systems on the basis that should these be challenged by holders of patents, they could retrospectively make the necessary changes if the situation arose.

Registering a trademark can also be referred to when you have the scale and financial means to do so. Even though one of her first businesses was trademarked in South Africa and the United States, but denied in the European market, this did not deter or detract from her ability to grow a business because there was no intention to set up a European office.

Key takeaway: Don't be distracted by the need to go through the expensive trademark or patent registration process. Get your product or service developed, and if the need arises and you have the financial resources you can then go down this road.

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6 comments
    I agree with Rapelang. There are so many other pressing concerns in the early stages of a tech company that allocating both raretime and rare funds to a patent is something you should think twice about. I'm not suggesting to any company that they shouldn't patent their software. Not at all. Only that you ask yourself whether it's the right thing for your company. When we were considering patenting some of Cognician's underlying tech circa 2010 we tried to identify what was the difference about our software that really differentiated us from potential competitors. At that point we had to face the reality that it was our learning methodology that really differentiated us and that some of our basic features were copyable. If we really wanted to build a moat around our company our best defence was to acquire clients as rapidly as possible and to service them exceptionally well. Also we simply didn't have the funds. What we had we decided to allocate to product development and sales. Ultimately we missed out on the available window for patenting some of the more obvious features but we built our moat in a different way. Now our system is very complex and not easily copied at all.And today we are developing new parts of the system that can still be patented so that avenue of protection is not completely closed. Ultimately you have to ask yourself: 1. Is patenting right for my software and my company? 2. How else can I build a moat? 3. How else can I allocate funds that I might apply to patenting?
    What about protecting your IP when outsourcing? What steps would you suggest a small business takes to protect themselves in this scenario?
    The only kind ofoutsourcing that represents a potential threat is code development in which you might be opening the source code to the developer. In this case you simply need to sign a contract with the developer that makes it clear that: 1. The code they're writing belongs to your company 2. That the agree to not copy the code orreverse engineer the product in any way 3. That all aspects of your relationship remain confidential
    I think it is essential for every Software Developer to have a firm grasp of intellectual property rights and how they apply to the Software Industry. Intellectual property is an umbrella term for various types of rights individuals or businesses can have in their names creative works and inventions. Software developers need a solid understanding of their rights to develop and protect a brand ensure exclusive ownership of their creations and keep their work confidential to create and maintain an advantage in a verycompetitive market. If you go the patent route it entitles youto exclude others from making using or selling the IPfor a period of 20 years.A Software Developer can get a patent on software inventions much like a Mechanical Engineer can get a patent on a new machine or device.To obtain a patent your software or algorithm must have a very high level of originality and you must disclose the “recipe” for your invention to the public. Keeping it a trade secret howeverprovides another way to protect material that could otherwise be copyrighted or patented and does not have the cost implications of copyrights and patents. Also while copyrights and patents are made public and limited in duration trade secrets are private and can last indefinitely – so long as you actually keep them secret and use reasonable measures to protect their secrecy. Trade secrets also can extend to things such as customer lists that are not easily protected by copyrights or patents.
    What kind of businesses need to register a patent ? and is it important for to register one for security services when we become successful in my company?

    very helpful thank you :)