I would also point out that a patent was issued for RSA encryption (http://en.wikipedia.org/wiki/RSA) that is widely used in the market place so history has shown that your straw man argument is false.
Perhaps you would care to address the originally proposed question - If someone invents a new means of encryption (implemented in software), should that receive the same protection as a person who invents a 100 MPG carburetor.
And a generous license had to be issued for research application of RSA; as it stands patent law is marvelously evenhanded in forbidding both commercial and research uses.
The popular fate of a would-be patented item is, quite contrary to your assertion and quite consonantly with the Constitution, fundamentally essential to patenting. If progress bogs down, then the system is working against its own raison d’tre.
RSA was the camel's nose. If we knew now what we knew then, gone baby gone. Copyright is sufficient for code. It would have protected the RSA implementation just fine.. and not had the devastating that this software patent shakedown/bunko bunch has had on every development company in the country.
One has to understand, its not the original code developers in most cases pushing these suits but rather litigators that buy up the "intellectual property" of companies who died for pennies where as the companies spent tens of thousands on the patents to protect themselves from frivolous suits. Companies like Apple and IBM patent everything to create a situation where every company who wants to play has to do the cross-license thing through industry groups so that you have to have millions to write code without the threat of being sued out of existence if you do publish a hot new product.
Software patents have killed innovation, stifled all software developement to some extent and almost generated no revenue for any but the largest software companies. This is not what patents are about.
And worse, the whole concept of a software innovation being protected 17 years.. is bizzare.. I imagine collecting royalties on using line numbers to refer to code to guide execution.. software advancement moves too fast for something 17 years old to have any value in the public domain. Patents are intended to allow a company to take a technology to market and have a few years of protected access to capitalize on the new technology. Physical world technical advances take about 20 years to get to market. The patent is right sized for this type of innovation, but software's whole life cycle passes in 20 years.. The only reason any software is possible is that so many programmers refuse to play in this travesty.