Supreme Court Makes Two Good Decisions On Patent Law

from the good-news-for-innovation dept

This morning the Supreme Court came down with two decisions about patent law that both take small, but extremely important, steps towards reigning in some of the worst abuses of the patent system. In both cases, it's disagreed with the position taken by the Appeals Court for the Federal Circuit (CAFC). This isn't a huge surprise, as many observers figured that the Supreme Court's recent interest in all sorts of patent cases meant that the justices weren't at all happy with the way CAFC was moving. This is a good thing, as the past twenty-five years or so of CAFC is a big part of why the patent system has veered out of control. For those who don't get into the details of these things, effectively CAFC was taken over by patent attorneys who pretty much felt that since patents were "good," more patents were "better." They continually expanded what could be patented and how much power patent holders had. This, in turn, meant that many more people and companies started filing for many more patents. While the Patent Office complains that it can't handle the load of patents, rather than hiring more examiners, the solution may simply be in reining in the overwhelming power handed to patent holders by CAFC. Today the Supreme Court took another step in that direction.

The first case was between AT&T and Microsoft, where it was already admitted that Microsoft had infringed on the patent in question. The legal question at stake was whether or not copies of Microsoft Windows outside the US should be counted when calculating the damages. While, normally, patent infringement rules only cover within a country, there is a rule against shipping the components outside the country to be assembled somewhere else just to get around patent infringement rules. So the real question was whether or not shipping a master copy of the software abroad was shipping the "components." The Supreme Court ruled 7 to 1 saying that it was not shipping components -- and that software was more closely related to a blueprint than actual components.

This ruling is likely to cause a number of things to happen. Back when this case was first being presented to the court, one of the amicus briefs tried to show that software shouldn't be patented at all. Since this wasn't the key argument in the case, it seemed like a wasted brief, but the ruling here actually may open up the possibility for a new case that argues exactly that. That is, the court has now made it clear that they consider software to be more of a blueprint than a component, and someone else can now make the argument that, based on this, software should not be patentable. This certainly could get interesting. However, the court did also suggest that Congress may want to clean up this "loophole" so watch out for someone in Congress to slip in a ruling keeping software patents in place before the court has a chance to make more of a statement on this. More immediately, this may help Microsoft lower the amount it needs to pay Alcatel-Lucent in the separate MP3 patent lawsuit -- since approximately half of the $1.5 billion award was based on overseas sales.

The second ruling may be even more important. It's the decision on the Teleflex v. KSR case concerning the obviousness test in patents. Once again, the Supreme Court has smacked down CAFC, saying that the lower court had gone too far in embracing an incredibly strict standard in determining obviousness. This is tremendously important, as the lower court's "test" for obviousness barely exists at all. Effectively, the only thing looked at is prior art, when the law is clear that patents need to be on processes that are both new and non-obvious. If this allows the courts and the patent office to start actually looking at the obviousness of patents, it could help get rid of plenty of really bad patents.

These two rulings, combined with last year's ruling that automatic injunctions don't always make sense for patent infringement are steps in the right direction. The Supreme Court is clearly recognizing that patent law has spiraled out of control and reached an unconstitutional level, where they're being used to hinder, rather than promote, innovation. It's great to see the court now reeling in these abuses, but there's still plenty more to be done before we've cleared out the problems of the patent system. The good news is that the Supreme Court is clearly looking at the issue and clearly recognizing that the constitutional purpose of patents is to promote innovation. As Justice Kennedy noted in that Teleflex ruling: "Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may... deprive prior inventions of their value."

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  1. identicon
    motie38, 26 Feb 2009 @ 5:43pm

    Patents are/should be for devices, not software

    I agree with Richard Ahlquist that patents should never have existed for software. In fact, as I understand it, software patents originally could not exist, but lawyers figured out how to get around the rule by describing the computer hardware within the patent itself, thus making it a "device". Software is a set of instructions given to the computer device in a language it understands. Ultimately, computers understand binary, but we've managed to teach computers other languages closer to human language via translators which translate those languages, basic, c, fortran, c++, etc. into binary. But ultimately, software is a set of instructions given in a language. If I write a text book on accounting to teach a person how to perform accounting tasks, I cannot patent the textbook. I can copyright the textbook. The textbook is a set of instructions written in a language the person reading the book (hopefully) can understand. If I write an accounting program in c++, again, I'm writing a set of instructions to teach the recipient of those instructions how to perform accounting tasks. It's just that in this case the instructions are for a computer instead of a person. But the knowledge and principles of accounting are the same. If I were instructing someone in France, the instructions need to be written in French. If for someone who's language is English, then the instructions should be in English, and if for a computer, then in an appropriate computer language.
    Since copyright is the standard method of legal protection for linguistic works, it should be the standard method for software. And since it's already used for software, why should there be a second method of protection in the form of patents? There shouldn't.

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