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
    Richard Ahlquist, 30 Apr 2007 @ 12:03pm

    Sam, sam, sam....

    The second case today is a perfect example. There are things called sensors, that can detect things about people. In the case mentioned above a sensor was used to determine a persons size and adjust the pedals in a car accordingly. In this case there was prior art to determine measurements using a sensor, and there was prior art for adjustable pedals using manual motorized means.

    Combining them isn't and shouldnt not ever have been patentable. Its akin to taking a wheel and granting a patent for every new device that its been attached to. Is it obvious to put 4 wheels on a box and try to roll it around after someone put 4 wheels on a platform and did the same, why yes that would be an evolutionary step.

    Now take speaker design, the basic design of a speaker is a coil, a cone and a magnet all attached to the 'basket'. It hasnt changed for decades. In the 40's or 50's a company came up with the idea to mount the magnet inside a plastic plug about the size of a hockey puck, then mount the coil and a screw hole on the opposite side. The invention was what became known as an audio transducer. Mount said device to a screw/stud and turn that surface into a speaker, was it innovative? Yes I believe so and so would most others.

    Fast forward to a couple years back when some company produced something similar in design except instead of the screw boss mount configuration they used a suction cup. Was that innovative? Not at all. It was simply a new mounting that could have used prior art components to build it in a slightly different fashion. Did they get a patent? Yes they did I believe.

    This is how drug companies keep patents alive on their medications. Take the chemical known as Cipro, its an antibiotic. Combine it with another medication in an Otic soloution and you have a new patent! like this "What is ciprofloxacin; dexamethasone ear suspension?
    CIPROFLOXACIN; DEXAMETHASONE (Ciprodex® Otic) is used to treat ear infections. Ciprofloxacin kills certain bacteria or stops their growth. Dexamethasone stops the inflammation and itching caused by the infection. Generic ciprofloxacin; dexamethasone ear suspension is not available."

    Why is it not available? Because while the patent for Cipro was granted in 1994 and would have and did expire in the early 2000's Bayer reformulated the delivery methods to prevent generics. See http://en.wikipedia.org/wiki/Ciprofloxacin for more information.

    This is why we need a new patent system that comprises people in the fields in which a patent is created to judge obviousness. Just because I put a wheel on a pogo stick doesn't mean I should get a patent, maybe just a pat on the back. Just because someone takes a technology like on the fly audio compression and combines it with a TCP/IP network doesn't mean they should be able to patent all of VOIP.

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