Unless you're a publishing VAR, you may not be familiar with XyWrite, a word processor in the magazine industry because of its support for automated typesetting systems. But just over two years ago, XyWrite resellers became indirect victims of the software-patent litigation mess, then just beginning to smell.

XyQuest Inc., maker of XyWrite, released a version that contained an "abbreviation expander" - a feature that spelled out pre-defined abbreviations or acronyms automatically. (No small enhancement to journalists covering the acronym-crazed computer industry) Then a very odd thing happened. XyQuest quickly pulled this feature and sent everyone a downgrade!

Turns out that an independent programmer with a software patent on abbreviation expansion honed in on XyQuest for fat royalties. Rather than pay up or fight in court, XyQuest opted to kill the feature altogether. I chose this example of what's wrong with patenting software because the image might instinctively appeal to small VARs writing custom code. After all, the patentholder wasn't a deep-pocketed vendor wielding its lawsuit like a marketing sword. The programmer in question was a little guy merely exercising his legal rights.

Right. And it's still wrong. Don't misunderstand me, patent law expresses a sound moral principle: the protection of intellectual property rights. But the framers of a 200-year-old patent system could never have imagined that the linchpin concepts of "originality" and "non-obviousness" would become untenable in this age of technological complexity.

As John Gliedman reports in our cover story, large software applications typically draw upon scores of programming techniques, most of which are not original and are usually obvious to those who know software. OK, why not open up the currently closed patent reexamination process, build databases of prior art algorithms, and hire an army of examiners with software smarts? In other words, why not fix the system so that it works for software? Yeah.

It ain't gonna happen. The Patent & Trademark Office (PTO) gets its money from application processing fees paid by inventors and patent holders maintaining licenses. The more applications and awards, the more money made. But, of course, the PTO isn't a profit center. Congress reportedly siphons off about $20 million in PTO fees annually to finance other government escapades.

There's also little incentive for careful application review, particularly when examiners get paid a huge bonus based on how many patent decisions they make each year either way. And believe it or not, there's actually an examiner's union. Call me cynical, but I bet that efforts by Clinton's reform man, PTO commissioner Bruce Lehman, to reward work based on quality not quantity is going to meet with resistance.

The PTO received more than 22,500 software patent applications in the past three years. Trial lawyers are licking their chops. There's no time left for trying to tame the 900-pound patent gorilla. Shoot it.

Software as intellectual property is already adequately protected by trade-secret and copyright law. The patenting process is adding millions of wasted dollars to development - and VARs will pay the price.