I know this comes up over and again, and it is an entire cause-du-guerre for many a internet users. Yet once again I will step back from this status quo and attempt to flesh out a compelling thread, an understanding framed with the ideas of manufacturing process .
First lets look at my claim that software isn't innovative. I make this claim out of the simple observation that there are only a very limited number of highly similar processes to produce software. Unlike the tangible world, and tangible manufacturing processes software can only be written in a relatively small number of languages. So despite minor syntax distinctions the only way to code is to write.
This very fact by itself shows just how little space is left open to innovation. When we discuss material objects we can often find ourselves in the midst of a classical Platonic philosophical discussion.
"What makes a chair a chair?"
"What is the 'idea' or 'form' of a chair?"
It is in this middle of these distinctions that we now find ourselves. Software, in its written expression, is dangerously close to it's ideal form. After all we express our ideas in writing.
In contrast, the classic American cliche for the innovator is one who "builds a better mouse trap." The mousetrap is the form and the patent expressions are unique, creative or innovative ways to improve a tangible functioning process. The same can be said of manufacturing processes. If someone has already patented a unique chemical production process then why should anyone who didn't invest the work or time into it be entitled to any cut of the resultant profits?
Often it seems that many technologists and hacktivists think that by loosening the restrictions on patents that we will have a sudden ground-swell of innovation. This is an untested claim at best, and I think that whatever innovation that such a loosening does produce will be short lived and anti-climatic.
Despite all the ongoing discussions over patent reform, no one wishes to address the whole picture. None of those pushing for change wish to acknowledge the narrowness and lack of innovative space that exists in the software industry. There are only so many ways to make use of a process before "it all has been done before."
Software and the next killer app are all the talk of the internet, but we need to take a step back and question just how "innovative" written-process products really are. There is a reason no one is making software innovations, and it isn't because of patents, it is because there is little innovative space to left in the software marketplace.