Competition in the marketplace has been traditionally based on the performance of particular implementations and features provided by particular software products. The cost of producing, manufacturing, distributing and advertising optimization software is often quite small. Even when this is not the case, it is generally the implementation of algorithms that is costly, rather than their development. Software manufacturers have a need to protect their investment in implementation, but have little need to protect an investment in algorithmic development. Traditionally, developers of optimization software have protected their investments by keeping the details of their implementation secret while allowing the general principles to become public.
Software copyrights are also an appropriate form of protection, and are now widely used.
In such situations it is usually quite difficult to quantify the net financial impact made by the embedded optimization package. Inasmuch as patents are intended to provide an incentive for invention, it seems appropriate to inquire whether patenting of algorithms will, in fact, create an incentive for the invention of algorithms. Given the existing intensity of research and the rapid pace of algorithmic invention, it seems hard to argue that additional incentives are needed. In fact, there is good reason to believe that algorithm patents will inhibit research, in that free exchange of ideas will be curtailed, new developments will be held secret, and researchers will be subjected to undesired legal constraints. Copyright and trade secret protection appear to provide the sort of protection most needed by software manufacturers.