Botching Bilski

So, the long-awaited US Supreme Court ruling on Bilski vs. Kappos has appeared – and it's a mess. Where many hoped fervently for some clarity to be brought to the ill-defined rules for patenting business methods and software in the US, the court instead was timid in the extreme. It confirmed the lower court's decision that the original Bilski business method was not patentable, but did little to limit business patents in general. And that, by implication, meant that there was no major implication for software patents in the US.

On Open Enterprise blog.

Bilski: Almost the Big One

Those with good memories will recall a short post I wrote back in February about a case, generally known as “Bilski”, that was going before the US Court of Appeals for the Federal Circuit (CAFC). It was important, because it asked the court to rule on the patentability of business methods – something that, like software patents, have blossomed to absurd levels in the US. The judgment came through yesterday, and it's pretty good news for those who would like to see some sanity in this area. Here's what well-regarded the patent law blog PatentlyO wrote....

On Open Enterprise blog.

Bye-bye US Business Method Patents?

On Open Enterprise blog.

A Historic Idea: How to Deal with Patent Trolls

Do not miss this fascinating paper, which looks at spooky parallels between today's patent trolls, and what were called "patent sharks" in the 19th century - people who bought up (agricultural) patents purely with a view to extracting money from hapless and helpless victims. Even better than the historical parallels are the lessons to be learned:

The chief lesson that emerges from this comparison is that certain types of patents are more vulnerable to trolls than others. Opportunistic licensers flourish when there is a large gap between the cost of getting a patent and the value that can be captured with an infringement action. This sort of arbitrage is likely to occur when: (1) those being sued cannot easily substitute away from the disputed technology; (2) the average scope of improvements in the industry is incremental, which makes the outcome of infringement litigation hard to gauge; and (3) the cost of acquiring and retaining patents is low. Farm tools and modern tech patents share this set of traits, albeit for different reasons, and hence they suffer at the hands of trolls more than other types of patents.

The other lesson that can be drawn from the Gilded Age experience is that the flood of opportunistic litigation cannot be stemmed through substantive changes in patent rights. First, industries unaffected by trolls view these proposals as harmful to their rights and lobby hard against them. As a result, every effort to address the issue through a comprehensive solution has failed in Congress. Second, since trolls and sharks succeed as long as they reach settlements, a substantive solution will be ineffective because most of these cases never get to court. So long as there is some uncertain chance that an infringement suit will succeed, defendants will tend to settle. In the nineteenth century, Congress eliminated this risk by wiping out the patents that were fueling opportunistic litigation. This suggests that abolition may be the only solution for modern trolls, at least with respect to patents for business methods and software.

Yup: make business methods and software patents history.... (Via TechDirt.)

US Patent Reform Slouches Towards Bethlehem

But at last it seems to be happening:

This case involved a guy who was trying to patent the concept of "mandatory arbitration involving legal documents." The USPTO denied the patent. After a failed appeal, the guy went to court, and CAFC is also saying that his concept does not deserve patent protection, with this being the key quote: "The routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness." In other words, simply taking a common process and automating it on a computer should be considered obvious -- and thus, not patentable. This doesn't rule out business model or software patents by any means -- but it at least suggests that the courts are beginning to recognize that the patent system has gone out of control. The court also specifically addresses its own earlier State Street decision, suggesting that people had been misinterpreting it to mean any business model was patentable -- when the USPTO and the courts should still be applying the same tests to see if the business models are patentable. It then notes that a business model on its own shouldn't be patentable unless it's tied to some sort of product, and then states: "It is thus clear that the present statute does not allow patents to be issued on particular business systems -- such as a particular type of arbitration -- that depend entirely on the use of mental processes."

What Muhammad ibn Musa al-Khwarizmi Knew

Nice to see algorithms getting some respect:

Algorithms, as closely guarded as state secrets, buy and sell stocks and mortgage-backed securities, sometimes with a dispassionate zeal that crashes markets. Algorithms promise to find the news that fits you, and even your perfect mate. You can’t visit Amazon.com without being confronted with a list of books and other products that the Great Algoritmi recommends.

Its intuitions, of course, are just calculations — given enough time they could be carried out with stones. But when so much data is processed so rapidly, the effect is oracular and almost opaque. Even with a peek at the cybernetic trade secrets, you probably couldn’t unwind the computations.

Maybe; but the point is, they are just calculations. Which is why the idea of patenting any of them - as raw algorithms, business methods, or software - is, er, patently ridiculous.