Software should be under by copyright, not patents. Usually you can put something under one or the other. For example, you can't copyright an idea, only patent it.
Patents are bad for software because they make the act of writing software illegal. Yes, WRITING software can be illegal. From scratch. Not copying software. Simply writing it. Like you just made a simple application? Good luck "making money". Did you get a
lawyer to do a patent search for you? No? You probably just broke the law. Yes, with software patents the only real way to stay legal is to have a lawyer look over your code every release, and do an extensive (and very costly) patent search. Wow! That sounds
really efficient. Do you already do this with your software? No? How do you know YOU aren't violating patents?
That's what Bill Gates ment when he spoke against software patents. If software patents are allowed to continue without restriction, it's quite likely writing any kind of software will very hard to be legal. People have put out patents on stuff like specific
HTML tags or something as simple as the generic string datatype. If you use strings in an software application and there is a patent for that, you could be sued! You might lose the ability to sell your software? Is that really fair?
And really you protect your revenue by having a better product, not relying on the government to make sure you'll never have any competition. That's actually the purpose of both copyright and patents. To increase innovation, to promote science and the arts.
It's not there their to protect business models and crush competition. And NOT suppose to hinder innovation (which is what software patents tend to do).
For your first claim, I'll argue that in most places, including the US and UK, patent infringement is a civil case, not a criminal case. I feel the cry of "Wrote software? It's illegal!" is a bit alarmist and sensationalistic.
As for your last paragraph - I agree that software patents as used today are a legalistic exercise in money-grabbing and fearmongering that do not serve their original purpose. But you have to remember that they do have an original purpose - allowing inventors
to benefit from their invention. If they didn't exist, any product I released could be reverse-engineered within hours and competition thrive without having to spend the R&D time I did. Not only that, but big companies could spend that R&D budget on marketing
and overtake my business by a mile.
I'm not trying to defend the current practices, but just to avoid the kneejerk "All patents are evil!" reaction. The "you'll succeed if you just have a good enough product" line works only in Horatio Alger stories, not in the marketplace where PR can make
or break a product.