A quick summary of things that came up in a discussion that I was surprised was not evident to most people:

• Software is unique in that it can simultaneously be covered by patents and software and trade secret even while being distributed.
• There is no evidence that patents have any positive effects on software development
• They have obvious negative effects, including:
  • disruption to business,
  • the R & D cost of working around patents,
  • the legal costs, of going to court, negotiations, legal advice on doing research,
  • patent search costs, patent filing costs (especially of defensive patents), and other effects on R D
  • products that never make it to market because of patent issues,
  • submarine patents
• They allow back-door patenting of business methods (such as the Amazon one-click patent) and mathematical discoveries.
• They prevent inter-operabilitym and thereby strengthen network effects.
• The economics of software does not require patents. This is proved by the existence of free software (as opposed to, for example, free cars) that is often better than the proprietary equivalents. As an R & D it is hardly surprising that software benefits from the open approach similar to scientific research.

One clarification may be necessary. By free software I mean both software that is free in price terms, and open source software that is free to tinker with and redistribute. Even when sold, the redistribution clauses in open source licenses rule out profiting from patents.