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Experts mull changes to software patent process


By David Worthington
April 27, 2009 — 
In response to the controversy surrounding software patents, the United States Patent and Trademark Office (USPTO) has tightened up considerably on granting them, and they are now harder to get than any other type of patent (except for business methods). That’s the view of Mark A. Lemley, a professor of law at Stanford Law School and director of Stanford's program in law, science and technology.

Lemley, who testified about patent reform and patent litigations in front of the U.S Senate in February, said that while patent reform in Congress has proven a long and difficult process, the USPTO has taken steps itself to tighten up the patent process.

Some patents issued by the USPTO over the years should not have been granted, said Lemley. Those questionable patents can negatively impact innovation, particularly when they are enforced against innovative companies, he added.

While a robust protection scheme is important to the economy, an excess reliance on patents is unnecessary and could be a drag on the economy in the future, said Richard Field, a past chair of the American Bar Association's section of science and technology law.

"There is confusion in terms of who owns what and who can do what," he explained. Claims and counterclaims have been the name of the game in the past, and companies need to have a portfolio [of patents] in place to even sit at the table with someone else, he said.

"These so-called patents grant ownership rights over ideas that have no reflection in the physical world other than 'I own the math,' " said Eben Moglen, founder of the Software Freedom Law Center and a professor of law at Columbia Law School. "If everyone goes looking for more in a game of phony real estate, hell will follow."

However, bad eggs have managed to slip past patent examiners largely due to a loophole in the patent process that says while a programming algorithm may preexist as a statement of math, part of it can be patented if it is tied to a process or machine, Field explained.

"In theory that is not incorrect, but patents being issued may not be as high a level of a creative spark as we would want to see. It's not enough just to tie a patent to process or machine; it should be a higher level of test to know it is something patentable in traditional sense—an act of genius in a sense," he said.

That "loophole" is a central issue in patents on software, and U.S. courts are seeking to close it, said James Grimmelmann, an associate professor at New York Law School.

Legislating success, or successfully legislating?
The U.S. Congress could supplement the courts by passing a law that explicitly states the standard that divides things that are patentable from the un-patentable, Grimmelmann said.

"The courts are confused and all over the map with that [standard]. Congress could articulate a clear line," he said.

While patent reform in Congress has proven a long and difficult process, Lemley said, he believes that some sort of reform bill will pass in this Congressional session.

New patent criteria could forestall litigants from going to court, because the result would already be clear, Field explained. "Patents won't disappear, but patent trolls will know enough not to go to court on certain things when it's clear that policy would prevent successful [patent] enforcement," he said.

"Patent troll" is a pejorative name for a patent holder that enforces his or her patent against one or more parties in an opportunistic manner.

Lemley suggested that one of the easiest reforms for Congress to enact would be a system that would give stronger patents to those who are willing to go through, "a more searching review in the USPTO."

Another pain point for Congress to address is that the USPTO's resources are stretched, said Field. However, he questioned whether proposed remedies, such as involving outside review boards in the patent process, would raise the rigor of review.

Grimmelmann, whose law school sponsors a community patent-review project, said that industry peer review would address some of the most recurring and serious problems with bad software patents, such as when patents are too abstract or in cases where prior art exists. "Programmers know the tricks of the trade that are not in the universe of documents that USPTO reviewers look at," he said.

Despite his call for more industry participation, Grimmelmann supports proposals that would increase patent office funds to improve patent quality and otherwise improve the patent process.

Changing how patents are examined
How the USPTO examines patents, including those in the software arena, has been impacted by a series of recent court cases, said Ruth Ann Nyblod, a spokesperson for the USPTO's Office of Public Affairs. She cited three cases in particular: Bilski, KRS and Nuijten.

The case filed by Bernard Bilski, which involves a patent claim for a business method for hedging risks in commodities trading, may reach the U.S. Supreme Court, said Grimmelmann. A lower Federal circuit has ruled that while it is okay to have an invention that has a computer in it that performs computations, that pure computation in general is not patentable.

The Supreme Court also raised the threshold for obviousness in 2007 when it ruled in favor of KRS, a company that refused to pay royalties on a rival's patents on the grounds that the patent combined preexisting elements in a predictable manner, said Grimmelmann.

"That won't stop patent trolls from trying on existing patents, and it won't stop them from trying to get something through the patent office. But it's now harder to get broad-sounding patents easily, which is a lot of the source of the problem," he added.

Lastly, the Federal Circuit’s decision in the case of Petrus A.C.M. Nuijten confirmed that a transitory, propagating electromagnetic signal per se is not patent-eligible subject matter, Nyblod said. In that case, the court specified that the signals used on storage media are not themselves patentable.

Treading carefully
Enacting further reforms will be challenging because people in different industries see the patent system differently, said Grimmelmann. For example, the pharmaceutical industry would have extreme difficulty operating without patents due to the extensive lab work that goes into patenting a drug, he explained.

Moglen questioned whether conditions were right for reform to be conducted in a thorough way. "In a time like this, players come in and try to monetize their residual power in politics. Bills become like Christmas trees. Some portions might be good, but the way to do [reform] is to step back and see things in the longer term. At the onset of hard times, it is difficult to see long term."


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