The Supreme
Court's June ruling on the
patentability of software — its first in 33 years — raised
as many questions as it answered. One specific software patent went down in
flames in the case of Alice v. CLS Bank, but the abstract reasoning
of the decision didn't provide much clarity on which other patents might be in
danger.
Now a series of
decisions from lower courts is starting to bring the ruling's practical
consequences into focus. And the results have been ugly for fans of software
patents. By my count there have been 11 court rulings on the patentability of
software since the Supreme Court's decision — including six that were decided
this month. Every single one of them has led to the patent being
invalidated.
This doesn't
necessarily mean that all software patents are in danger — these are mostly
patents that are particularly vulnerable to challenge under the new Alice precedent.
But it does mean that the pendulum of patent law is now clearly swinging in an
anti-patent direction. Every time a patent gets invalidated, it strengthens the
bargaining position of every defendant facing a lawsuit from a patent troll.
The end of "do it
on a computer" patents
In the late 1990s and
early 2000s, the Patent Office handed out a growing number of what might be
called "do it on a computer" patents. These patents take some
activity that people have been doing for centuries — say, holding funds in
escrow until a transaction is complete — and claim the concept of performing
that task with a computer or over the internet. The patents are typically vague
about how to perform the task in question.
THIS IS THE MOST
HOSTILE THE COURTS HAVE BEEN TO SOFTWARE PATENTS IN AT LEAST TWO DECADES
The Supreme Court
invalidated a patent like that in its decision this year. The patent claimed
the concept of using a computer to hold funds in escrow to reduce the risk that
one party would fail to deliver on an agreement. The Supreme Court ruled that
the use of a computer did not turn this centuries-old concept into a new
invention.
That has emboldened
defendants in cases involving similar patents. And in recent weeks, the courts
have been following the Supreme Court's lead and ruling that these patents are
illegal:
·
On July 6, a Delaware
trial court rejected a
Comcast patent that claimed the concept of a computerized telecommunications
system checking with a user before deciding whether to establish a new
connection. The court noted that the steps described in the patent could easily
be performed by human beings making telephone calls.
·
On July 8, a New York
court invalidated a
patent on the concept of using a computer to help users plan meals while
achieving dieting goals. The court was unimpressed with the patent holder's
argument that some of the details in the patent — such as the use of
"picture menus" to choose meals — was sufficient to render it a
patentable idea.
·
On July 17, the
Federal Circuit Appeals Court (which is in charge of all patent cases) rejected a
patent on the concept of keeping colors synchronized across devices by building
a profile that describes the characteristics of each device. The court held
that the creation and use of these profiles were merely mental steps that could
be done by a human being and were therefore not eligible for patent protection.
·
On August 26, the
Federal Circuit rejected a
patent that claimed the concept of running a bingo game on a computer.
"Managing the game of bingo consists solely of mental steps which
can be carried out by a human using pen and paper," the court ruled.
Converting that process into a computer program doesn't lead to a patentable
invention.
·
On August 29, a
California court struck down a
patent on a method of linking a mortgage line of credit to a checking account.
The court said that the generic computer functions mentioned in the patent were
not enough to merit protection.
·
On September 3, a
Texas trial court invalidated a
patent on the concept of using a computer to convert reward points from one
store to another. The court held that the "invention" claimed by the
patent "not fundamentally different from the kinds of commonplace
financial transactions that were the subjects of the Supreme Court’s recent
decisions."
·
In a second September
3 decision, a Delaware trial court rejected a
patent on the concept of an intermediary selectively revealing information
about two parties to each other — using a computer. The court noted that it has
long been common for corporate headhunters to withhold certain information
about an employer from potential employees (and vice versa) until both parties
are ready to proceed.
·
On the same day, the
same Delaware court invalidated a
patent on the concept of using a computerized system to "upsell"
customers who buy one product on other products that might interest them. The
court pointed out that upselling is as old as commerce itself.
·
In a final decision
the same day, the Federal Circuit appeals court struck down a
patent that claimed the concept of using surety bonds to
guarantee a transaction — using a computer. The court pointed out that surety
bonds have been around since ancient times, and performing this well-known
transaction with the help of a computer doesn't turn it into a patentable
invention.
·
On September 4, a
California trial court rejected a
patent on the concept of using a computer network to ask people to do tasks and
then wait for them to do them. The court pointed out that people have done this
with telephones for decades, and that doing the same thing over the internet
doesn't count as an invention.
·
On September 11, a
Florida court invalidated a
patent on the concept of subtracting a small amount of money from each of many
payments in order to accumulate a larger sum of money — using a computer. The
court noted that this kind of schemes has been widely known for centuries. For
example, the plot of Superman III involved a villain using this kind
of scheme to steal from co-workers' paychecks.
These rulings might
seem like common sense, but it's important to remember that every single one of
these patents was examined and approved by the patent office. That's because
until recently, this kind of "invention" was considered eligible for patent
protection. The patent office has issued hundreds of thousands of software
patents over the last two decades, and many of them look like this.
YOU CAN'T TAKE A
COMMONPLACE HUMAN ACTIVITY, DO IT WITH A COMPUTER, AND CALL THAT A PATENTABLE
INVENTION
But now the courts are
sending a pretty clear message: you can't take a commonplace human activity, do
it with a computer, and call that a patentable invention.
For example, recent
court rulings could make it easier to challenge Amazon's infamous patent on 1-click
shopping, which claims the concept of ordering things over the Internet with a
single click. The steps described in the patent — receiving an order from a
regular customer, retrieving pre-stored shipping information for the customer,
shipping the item to the customer — have been performed by delivery businesses
for decades. If Amazon's patent were challenged, courts might be skeptical that
performing these steps on a computer constituted a patentable invention.
Software patents in
danger
The recent string of
decisions invalidating software patents on subject-matter grounds is
unprecedented. This chart, based on data from Lex Machina,
shows the number of subject-matter decisions the courts made between 2007
and 2013:
The 14 patents the
courts invalidated on subject matter grounds in 2013 was a record for recent
years (such decisions were rare in the 1990s and early 2000s). And this chart
reflects decisions on all types of patents, not just software patents. With 11
software patents invalidated in just the last three months, the courts are on
track to blow away last year's record with software patent cases alone. So this
is the most hostile the courts have been to software patents in at least two
decades.
The real question is
how far the courts will take this logic. Because strictly speaking, all
computer programs perform sequences of mathematical operations that could — in
principle — be performed by a human being. As the legal scholar Robert Merges
has noted, the logic
of the Supreme Court's Alice ruling could call almost all
software patents into question.
"My immediate
reaction was that this would be extremely bad for software patents," patent attorney Gene
Quinn wrote last week of the Alice ruling.
He interviewed patent scholar Mark Lemley. While Lemley doesn't think all
software patents are invalid, he predicts that "a majority of the software
patents being litigated right now" will be found invalid based on the
Supreme Court's precedents.
There are hundreds of
thousands of software patents on the books, so the courts won't be able to
invalidate all of them. But if patent holders continue their losing streak of
recent months, it will dramatically shift the balance of power between
plaintiffs and defendants. Software patent holders will know that if they take
a case to trial, there's a high probability that their patent will be destroyed
— meaning they not only lose that case but also lose the ability to use the
patent against other defendants. That will make plaintiffs — and especially
trolls wielding patents of dubious quality — more gun-shy, giving defendants a
lot more bargaining power.
Research shows that
patents on software are particularly prone to litigation. There are several
reasons for that:
Software patents can
be extremely broad. For example, a famous Amazon.com patent covers
the concept of purchasing products online with one click. Another patent owned
by a troll called MPHJ has a patent that covers the concept of scanning documents to an email
address. This kind of broad patent makes it easy for
businesses to infringe by accident.
Most companies aren’t
just users of software, they also have IT departments and web developers that
produce it. So firms that wouldn’t otherwise have to worry about patent law are
at risk of infringing software patents.
Software is extremely
complex. Computer programs contain thousands, and sometimes millions, of lines
of code. Since patents can be infringed in just a few lines of code, there’s no
practical way for companies to figure out which patents their software products
might be infringing.
Source: http://www.vox.com/2014/9/12/6138483/software-patents-are-crumbling-thanks-to-the-supreme-court#