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.
October 31st, 2008 at 6:39 pm
“Why should they also be rewarded with close to two decades of monopoly power? ”
Firstly, it’s not a “reward”. And secondly it usually is not a grant of monopoly power. There’s more than way to skin a cat or click a mouse.
But hey, I’m biased. I’m one of those evil patent atty’s.
As for Bilski, aren’t you glad you now know what the new lay of the land is? Not knowing was more terrifying. A “particular” machine? I can live with that. How about one comprising at least 4 conductors for conducting electrical currents? That’s “particular” and doesn’t wholly preempt.
November 1st, 2008 at 7:23 am
How is patent protection not a “reward” for innovation? The reward is an exclusive right to use a particular process, formulation, or product for a defined period of time. You can argue the inventor “earned” the patent, but now we quickly spiral into semantics. Regardless, the inventor has been issued a potentially extremely valuable right for coming up with something first.
Sure there are other ways to “skin a cat or click a mouse.” However, the process in which the end result is achieved can be more efficient, providing much more value. Enter process patents. I’m not an attorney, rather a simple, small business owner who understands the need for developing competitive advantages beyond price. Some method of protection is needed for those who want innovate through the internet.
In my humble opinion, the current methods and processes of the PTO are ill-equipped to handle these protection needs. Furthermore, the value/length of the exclusivity of most internet inventions exceeds the true value of the innovation itself. For example, which has more valuable…Google’s PageRank process/technology or the patent protection of Google’s process/technology? If the patent were to expire tomorrow, what’s the barrier to entry?
Something needs to be done to protect inventors in this space, but the protection should be a fair representation of the invention’s impact or innovative strength. Currently, the PTO is not designed to make these judgments.
November 1st, 2008 at 6:09 pm
Thanks for the comments. I tend to agree with Brad that the PTO process in this area is hopelessly out of step. Case in point: we filed two biz method patents at Jellyfish that hadn’t even gotten their first examination at the PTO prior to our sale of the company to Microsoft. The current pace of business and innovation online simply can’t wait five years for a filing to make its way through the PTO. If the system is there to reward innovation, then give the innovators a tool at the start; not a mop-up right after the innovation has scaled its way up through the market.
And please don’t read my post as a complaint against patent attorneys. We all have to make a living, and you have to operate for your clients’ benefit with the system we have. I just wish it was a better system.
November 2nd, 2008 at 3:23 am
From a business perspective, without patents protection, a Google with its innovations would not have had a prayer to exist as a company. Case and point, Explorer and Gecko engine = the death of Netscape. Google search PageRank would have been used freely by Yahoo and MSN without any consideration to its inventors. They would also take any other software innovation without any consideration to any inventor.
Without IP protection the only owners of innovation will be large corporations without exception.
Fighting all software patents is an innovation killer. Spending effort on advanced research and extensive engineering is worthless unless you are a giant corporation that owns a market. Any new software innovation will just assist that giant in maintaining its dominance and blocking any new comers.
By the way, if the Google (Stanford) PageRank patent is canceled, there will be no effect on Google’s business. It may protect Google against any smart innovator in a garage somewhere from ever having a chance to unseat it. That innovator/inventor cannot protect his, her or their IP and therefore Google can just take it and use it freely without consideration to the inventor, as would MSN, Yahoo and other giants.
Software patents don’t protect a Microsoft as much as it would a new Larry Page.
Thank you,