The Federal Circuit struck another confusing blow for software patents yesterday in the case In re Bilski. For you lawyer-types, there is a detailed analysis on the Patently-O blog.
I won’t go into the legal minutiae of the decision, but it basically confirmed that a business method process is eligible for a patent only “if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”
So now the $64,000 question for software patents: what does it mean to be “tied to a particular machine”? Is it enough that your business process runs on a standard computer?
Unfortunately, the court leaves this question wide open, stating “We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.”
Thanks for nothing. The industry will now spend millions of dollars in legal fees and lots of time and energy trying to figure out whether this means the end of software patents or whether there are a few “magic computer words” that can be inserted into software/Internet patent applications to satisfy this standard without really effecting the substance of patent coverage for software.
I’ve already blogged about our struggle to decide whether to seek patent protection at Alice.com here. Bilski doesn’t really make the decision any clearer. If all Bilski portends is that you can tie your claims to a computer hooked to the Internet, we need to file. But it could mean that software patents are now dead on arrival. To use Fred Wilson’s great analogy to the nuclear arms race (here), maybe Bilski means those nuclear bombs we’ve been stockpiling just all became duds. Or maybe not. Clear as mud.
The more I see this mess unfold, the more I think the whole patent system for software/business methods should be replaced. The current system is hopelessly out of sync with the speed of business innovation, has an exclusionary period that stifles innovation rather than encourages it, and adds a huge expense to both small and big companies alike.
Every company has a built in incentive to create a better way of doing business that attracts customers. Why should they also be rewarded with close to two decades of monopoly power? The patent system for software/business methods should simply exist to ensure that the companies that come up with some really innovative stuff get a small period of time to reap a reward before the rest of the market rushes in to copy what they invented.
My recommendation: create a system with a quick examination process (perhaps a peer review on obviousness/prior art) and a very short exclusionary period (2-3 years?). 2 years in Internet time is a lifetime.