From LQWiki
A patent is a form of Intellectual Property. In exchange for revealing the secrets of how to make an invention, the government grants the inventor a monopoly over production of the invention for a limited time (currently, under US law, this is a period of 20 years).
Today, the owner of the patent is usually not the inventor themselves, but rather the corporation that hired them. The patent application process is long and expensive, and almost beyond the means of the average independent inventor. At least in the computer industry, corporations use patents not to protect their own ideas, but as a defensive measure to prevent being sued for patent infringement by other patent holders. They can do this by preemptively patenting an idea, or by cross-licensing.
The process of cross licensing is that two or more patent holders agree to let each other use their patents. Note that they don't give each other information (beyond what is on the patent), they just agree to not sue each other. The actual invention will need to be reverse engineered. The companies can also use cross-licensing to keep any outside entity (who don't have cross-licensing agreements in place) out of the market.
A patent can be overturned by showing prior use (that is, showing, in a publication that was written before the supposed invention date, an invention that does the same thing), but the process is long and drawn out, and large companies can use their legal staff to keep the decision in limbo until the patent expires.
Software Patents
Software and business model patents are a new, controversial (and hated by those in the hacker community) forms of patents. Since software and business models are abstract concepts, the information in the patent application is usually not enough to reimplement the idea (defeating the entire concept of the patent). In addition, they can be both stretched to cover concepts that were not considered by the original inventor. This stretching is encouraged by patent lawyers. Thirdly, software applications are much more complex than physical devices. A physical device may contain about 20 different patentable concepts. A piece of software could easily contain thousands. If a software developer had to pay that many royalties, they would simply be forced out of business.
Software patents are a particular threat to the Open Source community. Traditionally, software was covered by copyrights. Unlike copyrights, patents cover the entire idea, not just a particular implementation. So it would be impossible for the community to create a clean room clone of a patented application.
Software patents and business model patents are already a reality in the US, efforts continue to stop these new forms of patents from taking root in the European Union.
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