Let's says that Second Life has some patented algo's. We know that Second Life somehow exists in this space, as I have read a paper based article on the virtual world software application of same name. If, as we have seen, the application's "real estate" can be purchased for REAL money from this space, clearly a transformation has occurred. Somehow those mathy logic loops moved some money at a distance.
A recent Accenture study indicated that 70% of value of the S&P 500 is intangible. Google does not have enough capital goods to equal their current valuation - where does that value come from? The overwhelming bulk of their value is one pretty complex algorithm. How much money is that algo moving at a distance for Google? Not all of that money movement is digital, as some is still moved in the form of checks. There is some interface between the purely math world of for loops, and the real world of money and iPhones.
How many applications are there out there attempting to increase the efficiencies of the S&P 500? Literally thousands. If only a few succeed, they too have performed a transformation in this real space. The transformation is the physical firing of neurons setting behind the keyboard, through the interaction with the software, and then propagated to other neurons/keyboard combinations, until a new efficiency has been achieved, resulting in more REAL dollars in the company's bank account. The software is focusing or harmonizing neural firings to achieve a new reality that a group of people in this space share.
Acme company: Yesterday, we could only do two of these projects simultaneously, now with our new project portfolio management software, we can do three. New reality, more money. Transformation complete.
There are substantial arguments on whether math is a representation, or math IS reality. For this discussion, it doesn't really matter. Software, and the math loops behind it, is increasingly manipulating objects in this space via the transference of an organized thought from one neuron host to the next. The social software sites are an extreme example. The software is changing our culture (youtube, myspace, linkedin, etc.) - talk about transformation.
I have five software patents, and each time I think about them, sometimes I'm proud, and sometimes I feel guilty. My mom is always proud. I'm not smart enough to have any ideas outside my current domain, so this company I started represents my retirement. Patents represent some great potential value for me. Conversely, I can't get to all of the things that the patents represent, so if they were in the public domain, potentially great efficiencies could be obtained, lessening carbon output in some small way. The right path is not so clear to this dude.
When the PTO begins research into a new claim, they say they are "going to the shoes." This terms goes all the way back to the very first US patent examiner, the 3rd president himself, TJ. He was selected the first examiner, because, well, he knew everything. However, he kept some reference material in shoe boxes, hence the term. I think the bar for most software patents is too low. However, I do think that when software incorporates new algorithms that can demonstrably transform behaviors in this space, that software seems pretty special to me, and a patent doesn't seem like such a bad thing.