This RIETI Discussion Paper by Kazuyuki Motohashi of the University of Tokyo is already a few months old, but might still interesting as a case study of the effect of "allowing sofware patents".
http://www.rieti.go.jp/en/publications/summary/09080001.html
The history of software patenting in Japan is summarized as follows:
"This paper empirically investigates the role of software patents in innovations by software companies. Originally, software related invention could be protected by
copyright. […] Through the early 1990s, software itself, which consisted simply of calculation methods, was not considered to be subject to patent protection. However, software enabling the functioning of hardware, such as the Japanese language input system used in word processors, was allowed patent protection together with such hardware. In line with the increase in packaged software not embedded in hardware, in 1997 patent protection was allowed for software recorded on media such as floppy disks. In 2000, software was made eligible for patent protection as software itself, and in 2002 this protection was extended to software that circulates on computer networks."
Data from three databases (patent applications from JPO, two official datasets on individual company performance) is aggregated to study "innovation activities in software companies since the middle 1990’s".
How is "innovation" measured? (the author notes that often the number of patents is used to quantify innovation, but now that is the input the effect of which he wants to study.) "[…] we use two indicators reflecting some mechanism of the relationship between patent and firm performance variables. One is the share of
software sales to non software companies." (The reasoning is that the Japanese software industry is considered a "multi-layered subcontracting structure" with smaller software companies being contracted by larger ones and that the fraction of sales to non-software companies indicates how dependent the firm is on such sub-contracting.). "Another innovation output indicator is the share of prepackaged software sales." (since if it increases, it shows that the vendor becomes more independent of a large system integrator).
It's not clear to me to what extent these indicators really measure innovation. In addition, it seems that the statistics the author obtains from the data hardly allow to deduce any statistically significant correlation. The only one being, that subcontracting seems to reduce with patenting. Thus the article reaches a rather weak conclusion: "In this sense, pro-patent reform on software invention may induce independent strategies by in-house technological capabilities, and have a positive impact on the productivity in the Japanese software industry." Bessen, Maskin or Meurer are not cited in this study.
