Supreme Court Leaves Software Patent Issues Unanswered

By  |  Tuesday, June 29, 2010 at 10:44 pm

Yesterday, the Supreme Court handed down a long awaited decision on a patent case that could have changed how or whether software patents are granted. Ultimately, little changed, except that the Court’s decision was at odds with 150 years of patent law, says a legal expert.

The Court’s Bilski v. Kappos decision could have invalidated many software patents had it accepted a Federal circuit court’s “machine or transformation” test for what is patentable. Proponents of the lower court’s decision had hoped that the high court would finally bring an end to excessive patent litigation and eliminate questionable patents that they say can slow the pace of innovation in technology.

The Bilski case involved a patent claim for a business method for hedging risks in commodities trading. The Justices affirmed the lower court’s decision that the Bilski patent was too abstract and therefore un-patentable. However, it did not accept the machine or transformation test, thus failing to provide any guidance to government patent examiners, defendants, or patent filers.

Some people claim that all software is an abstract idea, because programming is just a form of mathematics, while others believe that computers that control other machinery, or software that has very specific algorithms is not abstract at all, said James Grimmelmann, an associate professor at New York Law School. The machine or transformation test would have helped patent issuers determine what is patentable and what is not.

The test has always been recognized as how patents are interpreted with very rare exceptions, and both the lower court and dissenting Justices were in line with existing law, said Richard Field, a past chair of the American Bar Association’s section of science and technology law. The Supreme Court’s majority decision not to use that machine and transformation test, and to instead leave it up to the lower court to define a new test, was an activist position, he added.

One could interpret the majority’s decision as chiding the lower court for “creating the law,” but the Justices were in fact leaving the wording of the test open in anticipation of new technology, Field said. Although no one in 150 years has defined the test to include things that might be coming up in the next 20 years, the Court essentially said, “We should keep those words open just in case,” he explained. “That to me is the definition of activists.”

Fields found it bizarre that the Supreme Court’s majority was willing to allow a lower court to outline a new test while simultaneously chiding it being too activist. The minority suggested that the Court use the established test and said, “Let Congress cover those new technologies. Don’t ask us how new technologies should apply to old words,” he noted.

The Court was clearly struggling with its opinion on whether business method patents were good or bad, Field acknowledged, but sent mixed messages in its decision. The likely result will be a surge in applications for business process patents. “What a patent examiner is supposed to do…I have no idea.”

Unlike Field, I am not a lawyer, but I cannot help but think that the Court’s decision may make it more difficult for new technology to come to market. In that case, consumers lose.



8 Comments For This Post

  1. Leslie Says:

    Aw, I never really thought it was this complicated. Still, I believe all these developers have the right to patent their creations or findings. But yes, if it's all equations, it can be a little tricky. I suppose they can create a systematic process for this.

  2. Seth Johnson Says:

    Not tricky at all. If there's a general purpose logic processor in the claimed invention, then any instructions provided to it are not covered by the claim. A claim to a process that might be automated is just about the concrete process, and is independent of code used to automate it.

  3. @Hallingip Says:

    Seth you have no idea what you are talking about. The arguments against software patents have a fundamental flaw. As any electrical engineer knows and software developer should know, solutions to problems implemented in software can also be realized in hardware, i.e., electronic circuits. The main reason for choosing a software solution is the ease in implementing changes, the main reason for choosing a hardware solution is speed of processing. Therefore, a time critical solution is more likely to be implemented in hardware. While a solution that requires the ability to add features easily will be implemented in software. Software is just a method of converting a general purpose electronic circuit (computer) into a application specific electronic circuit. As a result, to be intellectually consistent those people against software patents also have to be against patents for electronic circuits.

  4. Seth Johnson Says:

    Mr. Hallingip, you exhibit a common confusion which my explanation addresses quite aptly. See my response to Leslie, which is simply an extension of the same analysis. If there's a general purpose logic processor in the invention, then any separate instructions provided to that processor are software — whatever physical form they take — including circuitry. If the device doesn't take that form (a logic processor and separate instructions), then there's no issue of software patenting — even if that circuitry does the same job as software would. The whole point is that when there's software (instructions provided to a general purpose logic processor), it's not covered by a patent.

    The conundrum you pose is illusory. Many people in the software patent discussion describe the same point and imagine it's a pickle. It's not. Part of the reason for the confusion is that people haven't analyzed the implications of software as *pure* abstraction — they're all lost in the pondering of how to draw distinctions in plain vanilla abstraction terms, which is not helpful in the case of software.

  5. David Worthington Says:

    thank you seth

  6. Seth Johnson Says:

    You are welcome!

  7. Seth Johnson Says:

    Now look: USPTO, post-Bilski — a strong presumption against abstract ideas:

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