No one is talking about deregulating software. Software already benefits from protection through Copyright. No one can copy your software. Patents don't cover your actual software, but the ideas and methods behind it. That is what is hurting the consumer and the industry in general. Software patents shouldn't be granted, software should be protected by copyright only.
That is not _actually_ what is hurting. What is hurting: You can only get a patent for things that are novel and non-obvious, but the level for "non-obvious" is just too low. If my boss says "do xxx" and I say "I can't figure out how to do xxx" and then I look through a patent database and say "I couldn't figure it out, but these guys did and they patented it" - well, without patents xxx wouldn't have happened because I couldn't figure it out, with patents my boss has the choice of not doing it, or paying for a patent license. Clearly better to have the choice.
However, most things I just figure out as problems come up. And so do many other people. The fact that a solution to a problem might be found in a patent doesn't help me at all, because most of the time, finding the patent and figuring out what the patent actually says is ten times harder than figuring out how to solve the problem. Because the level of "non-obviousness" that you need for a patent is so low, the number of independent re-inventions are enormous. That's the problem: While doing a normal days work, solving a simple problem, I run the considerable risk of solving it in a way that someone else has patented, without knowing anything about the patent, and opening up the product to patent infringement claims.
There's already a non-obvious clause to patent grants. You can't patent obvious ideas/methods. The problem is that corporations are getting pretty good at obfuscating through language so that "obvious" becomes "non-obvious" with a few simple choice words thrown in the application.
Suggestion: Ask the developer who infringed on the software patent under oath whether he has seen, read and understood the patent before infringing or not, and if not, how long it took him to re-invent the patented invention. And take that to decide whether it's obvious or not.
Posner isn't totally right. Some companies have paid millions for some software technologies and are not as trivial as he alludes. However, determining what's trivial and not is part of the problem.
Software is protected by copyright. That means if I write some software, you can't just copy it. But you can write software yourself. Writing software isn't cheap. You'll pay $100,000 per year for a good software developer. To develop some good software, you need a few developers, managers to keep things on track, designers, testers, lawyers, human resources, and it quickly adds up to a few millions. Copyright makes sure that nobody can just take the software that cost a few million and copy it. They can write software that does the same things; it will cost them millions as well. And with all those millions in cost, there isn't any need for patents. There is protection against stealing software. That's all there is needed.
Writing software that works is expensive. That doesn't mean it should be protected by patents. Copyright prevents you from stealing my work. Patents prevent you from doing what I did, even if you never knew what I did.
Posner seems to be suggesting that patents be used as a means to protect huge development investments. This is not the same reason they were created. IIRC, patents were invented to protect the individual/smaller corporations from the larger corporations. To me this sounds the opposite from Posner.
Patents were created to advance the state of the art, by giving inventors a monopoly on the invention in exchange of publication. This was supposed to help, because others would read the patents and then improve on them, instead of the inventor keeping the invention secret. That purpose has been destroyed completely.