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Software patents are widely discussed in Europe today. The standard economic rationale for patents is to protect potential innovators from imitation, which ultimately provides the incentive to incur the costs of innovation. But at the same time, patents may inhibit innovations by others. §Based on an analysis of the determinants of successfully developing software, in this work a bipartite probability model for comparing a deregulated market without patents to a market using a patent system is developed. Using computer-based simulations, a comparison of different scenarios testing the impact of different patent protection duration and scope on the innovation behaviour of the software market shows that strong patent protection is globally efficient only in markets with a relatively low profit potential.
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