Monday, June 28, 2010

Bilski decision a major disappointment: doesn't invalidate even one software patent

The Supreme Court of the United States (SCOTUS) has finally handed down its opinion in re Bilski, a business method patent case. The patent application in question relates to a method for managing certain risks related to price changes in the energy market.

Like many other critics of the patentability of software, I hoped that the Supreme Court would not only uphold the decision of the previous instance (the US Court of Appeals for the Federal Circuit), which had declared the claimed "invention" ineligible for patentability: that was widely expected. This case would also have been a splendid opportunity for the Supreme Court to draw a line and establish a reasonably restrictive set of rules that would either do away with many business method patents or, ideally, go even further and up the ante for software patent applications.

Unfortunately, the Supreme Court delivered an opinion that doesn't help the cause of partial or complete abolition of software patents at all. Within the range of possible ways in which the Supreme Court could justify its decision to affirm the rejection of the relevant patent application, the court's majority position is about the most liberal reasoning that it could have been. Only a decision to grant a patent on the Bilski application could have been any less restrictive.

Simply put, the Supreme Court's decision does not do away with even one software patent that already exists, nor does it raise the bar for the future.

The Supreme Court decided that the business method in question wasn't patentable because it was an abstract idea but simultaneously stressed that business methods can indeed be patentable. The court cited a long-standing principle in US patent law according to which "ingenuity should receive a liberal encouragement". In case of doubt, the scope of patentable subject matter should always be broad rather than narrow. In today's technology landscape, that approach means software patents without any meaningful limitations. Plain and simple.

Only new legislation could restrict the scope of patentable subject matter beyond the Supreme Court's permissive stance. The ruling makes reference to an earlier decision, according to which the courts "should not read into the patent laws limitations and conditions which the legislature has not expressed."

But restrictive legislation is a long shot to say the least. In the Bilski case, major corporations particularly from the IT industry issued warnings against any limitations of the scope of patentable subject matter. IBM even made the absurd claim that software patents liberated programmers and made open source development so very popular. Against that kind of support from industry, it is hard to see how the opponents of software patents could successfully lobby the United States Congress.

The Supreme Court's decision does leave it to the appeals court to develop new legal tests that could make certain claimed inventions patent-ineligible. However, the Supreme Court opposes the notion that the traditional machine-or-transformation test could serve as the sole test of patent-eligibility of processes. Since the Supreme Court also made it clear that even business methods should be patentable in principle, it's hard to imagine that the appeals court would now develop any seriously restrictive case law.

Like I wrote further above, the Bilski case would have been an opportunity to affect at least in part the patentability of software in the United States. The decision announced today makes it clear that a majority of the Supreme Court wanted to give the abolition of even only a small percentage of all software patents the widest berth possible.

The petitioners in the Bilski case lost because their application won't result in the grant of a patent. But the free software and open source movements lost something even more important: a rare chance to achieve at least a partial victory.

This US decision is even more disappointing when taking into account the global trend. New Zealand's parliament was temporarily inclined to abolish software patents, but a trend reversal was brought about by IT industry giants lobbying the legislature. The German equivalent of the Bilski case, a decision on an XML/HTML document generator, also ended in a resounding victory for the pro-patent camp.

The anti-software-patent movement has clearly had a bad year, and it hasn't made any noticeable progress in a number of years. I know a lot of people in this community don't like the notion. Nor do I. But we must face the facts.

The position that software patents should be abolished isn't nearly as popular among judges and politicians as it is in the free and open source software community.

In recognition of that fact, it's time to think of new approaches. Let us be open-minded about strategies that could have a certain positive effect under the circumstances, such as the upcoming Defensive Patent License (DPL).

[Update] I have put together a list of the top ten losers of the Bilski case (besides the petitioners Bilski & Warsaw) [/Update]

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