A court case filed by Bernard Bilski, which involves a patent claim for a business method for hedging risks in commodities trading, has reached the U.S. Supreme Court. What the court decides could have far reaching affects on the software industry.
The Supeme Court must either uphold or vacate a decision by a lower Federal circuit court that ruled that while it is okay to have an invention that has a computer in it to perform computations, that pure computation in general is not patentable.
In April, I wrote about three court cases that directed the United States Patent and Trademark Office (USPTO) to make software patents substantially more difficult to obtain. Bilski was one of those cases, and I feel that it was an important decision to put the breaks on patent trolls.
However, it is to be expected that any case the Supreme Court hears is subject to reversal. Why else would they hear a case if the case is settled or is not controversial?
Today, I received an e-mail sent on behalf of Robert Plotkin, a Boston patent attorney and author of Genie in the Machine. Plotkin warned that "it is quite possible that the Supreme Court's decision could affect whether software can be patented in the U.S."
He continued: "If the Supreme Court were to rule that software is not patentable, or even if the Court were to impose restrictions on the patentability of software, this could have significant negative effects on software innovation and on the software industry in the U.S. Innovative software companies, like all innovative technology companies, rely on patents to protect their investment against copiers."
The Court could unintentionally ban software patents through the legal test it uses to determine whether business methods are patentable, he explained. "If the Court says that processes which perform calculations are not patentable, this could be interpreted by lower courts to prohibit patents on software because software performs calculations.
"This is exactly what happened as the result of a previous Supreme Court decision in the early 1970s. It took many years to undo the damage done by that decision."
Well-earned patents are an economic driver, but questionable patents can negatively impact innovation, particularly when they are enforced against innovative companies, said Mark A. Lemley, a professor of law at Stanford Law School and director of Stanford's program in law, science and technology, in an April interview.
Changes that impact the patent system must strike a careful balance, and the Court must also realize that a solution that is ideal for one industry may be harmful to others.