There are two problems with software patents for the common man. First, a patent is ussually an innapropriate protection method for software in almost all cases. But that comes down to your perspective. I tend to think of Software Engineering more as an art than an engineering discipline, and so code is more like literature than schematics. Further, most, if not all, algorithms are derived from mathematics which is the root of nature -- algorithms are more discovered than they are created. You can't get a patent on a specific species of beetle but if you discover it you can get it named after yourself... As far as software is concerned, copyrights and liscenses are ussually good enough for most folks.
The second big problem I have is that the common man will never actually be able to defend his patent. You just spent $12,000 on the patent fee alone, not include lawyers fees, R&D, etc that lead to the concept or polished the concept. If your patent is ever challenged you would be looking at being tied up in courts for years at great costs. You will lose to anyone with more money than you -- plain and simple. What has your patent bought you in the end? A big fat bankruptcy.
And the meanwhile, your safely patented product that you hold exclusive rights to in the US is being reproduced extensively in China and manufactured exclusively by a fellow patent holder in Europe. Plus, all anyone in the US would have to do to get around your patent is tweak it enough that it is no longer in the scope of the original patent -- piggy backing your idea and leap frogging your innovation and patent.
DiverDan -- From what you described it sounds like it was definately the appropriate action to patent, as you were patenting a process and not just a peice of software. Incentives are extremely important and whithout the insentive of having rights over what you create why should you bother making it in the first place? I agree with you.
The problem with software patenting in general is defining "good patents" and
"bad patents". What makes a good software patent? I don't think anything does -- you are either patenting a process or a manufactured good, not a peice of software.
For anyone interested, patenting DNA and Genetic/Biological matter is an interesting side debate running parrallel to the software patents debate.