My writings about open source and software patents have earned me a special place in the hearts and minds of those who harbor irrational hatred of software patents. But I am here to tell you that open source is not all bad and, in fact, should be embraced. Open source, however, is hardly something new to the patent community. Perhaps it is better to say that where open source software is heading is nothing new, and it will come as a shock to those who hate patents, but patents will be completely necessary in order for the open source community to continue to advance and live up to its full potential.

Those who are in favor of open source frequently become near apoplectic at the thought that open source software can be, and in fact should be, patented.  The reality is that forward thinking companies that operate in the open source space do make use of the patent system.  A quick search of Freepatentsonline.com shows that Red Hat, Inc., one of the preeminent open source companies in the world, is named as the assignee on some 263 US patents or US patent applications.  So if you are about to make an enormous mistake and listen to the “open source means free” community, ask yourself why a highly successful company like Red Hat uses the patent system and acquires patents.  If patents are good for Red Hat, an open source company not at all enamored with the existence of software patents, then why are software patents bad for you?  Shouldn’t you model your business off successful companies?

Although much remains unclear after the U.S. Supreme Court’s decision in Bilski v. Kappos, one thing is certain: software remains patent-eligible in the U.S. This result may not be entirely clear from a quick read of the opinions in the case. Therefore, I present the following pieces of evidence that the Supreme Court in Bilski effectively re-affirmed the patent-eligibility of software (listed, for the sake of simplicity, in the order in which they appear in the decision).

Alice enters another world through the looking glass

In Chapter 6 of Lewis Carroll’s Through the Looking Glass, Humpty Dumpty tells Alice scornfully “when I use a word, it means just what I choose it to mean – neither more nor less.”  After reading and compositing the various opinions by the nine SCOTUS Justices in USPTO v. Bilski, I, like many others, are still wondering what is a patent-ineligible “abstract idea” (other than Bilski’s claimed method for instructing buyers and sellers how to protect against the risk of price fluctuations in a discrete section of the economy, i.e., hedge against such risks) and especially what does “patent-eligible” really mean under 35 U.S.C. § 101.  The composite opinions by SCOTUS in Bilski concoct a standard for patent-eligibility that is as fuzzy and circular as the logic Humpty Dumpty employed on Alice.

As you might imagine, there are many takes on what the SCOTUS Bilski ruling actually says, including mine.  See Section 273 is NOT a Red Herring: Stevens’ Disingenuous Concurrence in Bilski where I waxed lyrical about now retired Justice Stevens’ disingenuous sophistry in his concurrence which treats 35 U.S.C. § 273 as if it didn’t exist, but which is, in fact, an implicit, if not explicit, recognition and acceptance by Congress that “business methods” (however you characterize them) ARE patent-eligible subject matter under 35 U.S.C. § 101.  See also Foaming at the Mouth III: And Then Came Bilski where I commented on the most recent “thunderbolt” from our Judicial Mount Olympus as SCOTUS summarily granted certiorari in Prometheus Laboratories, Inc. v. Mayo Collaborative Services and Classen Immunotherapies, Inc. v. Biogen Idec, and then vacated and remanded both cases to the Federal Circuit to reconsider (with equally “fuzzy” guidance) in light of SCOTUS’ ruling in Bilski.

Over the last couple weeks I have been giving more thought to open source software and what, if any role it has to play with respect to the economic future of both start-up companies and established giants.

My belief is that open source can and should play a vital role in innovation, but the way it is by and large carried forward today does little to forward innovation and an awful lot to significantly disadvantage start-up companies.  The horribly bad advice that pervades the open source community and the utter lack of knowledge or familiarity about patent law is staggering.  I don’t begrudge anyone who doesn’t like the patent system, but can you please at least not like it for a valid reason?  With the myths and disinformation spewed by those who are either clueless and loud, or those who know better and have an agenda, are drowning out rational debate and significantly impeding progress and innovation.

Unlike many of the visitors and contributors on this site, I am not a lawyer. I am a programmer who found this blog while chasing links across the Internet looking for information on software patents and what has now become one of the most anticipated Supreme Court decisions ever; Bilski v. Kappos. That was almost eight months ago at a time when I held what is probably a common view of software patents among programmers. Specifically, that they are immoral, unfair, and restrictive to innovation and creativity. I have since found that things are not as black and white as they appear and I’d like to share with you the problems as I see them, from a programmer’s point of view.

The communication between lawyers and programmers is admittedly poor. I can’t imagine very many people jumping through all the hoops to become a patent lawyer if they didn’t believe in the power of the patent system to help grow the economy. On the other hand, programmers who are frustrated with declining job security, declining benefits, and declining pay, often turn to leaders in their field, who demonize software patents. Those industry leaders who support software patents are usually the ones doing the laying off, cutting salaries, and outsourcing jobs, so it is understandable that they have questionable credentials when it comes to the opinions of the common programmer. How can we start to heal the wound and repair the damage that has already been done? We need to encourage more communication between the two parties if we are ever to end the “cold war” over software patents.

When last we left off our History of Software Patents series we were talking about In re Alappat, which by implication did away with the Freeman-Walter-Abele test for patentable subject matter by not mentioning the test whatsoever. Shortly after Alappat, a three-judge panel once again resorted to and applied the Freeman-Walter-Abele test in In re Trovato, but that was quickly withdrawn by an en banc panel of the Federal Circuit. So it seemed relatively clear that the FWA test had been abandoned. This believe was bolstered by the famous, or infamous depending on your view, case of State Street Bank & Trust Co. v. Signature Financial Group, Inc. and ultimately in AT&T Corp. v. Excel Communications, Inc., where the Federal Circuit reaffirmed its decisions in State Street Bank and Alappat.

In State Street the patent in question was U.S. Patent No. 5,193,056, which issued to Signature Financial Group on March 9, 1993. The ‘056 patent is generally directed to a data processing system for implementing an investment structure which was developed for use in Signature’s business as an administrator and accounting agent for mutual funds. In essence, the system, identified by the proprietary name Hub and Spoke®, facilitates a structure whereby mutual funds (Spokes) pool their assets in an investment portfolio (Hub) organized as a partnership. State Street was in talks with Signature Financial to acquire a license, and when talks broke down they brought a declaratory judgment action to have the ‘056 patent claims declared invalid.

After 6 months and 15 days we still wait for a decision in Bilski v. Kappos, perhaps the most anticipated Supreme Court patent decision of all time.  It is now 10:50 am Eastern Time and the Supreme Court slip opinion page has not added another opinion since at least 10:27 am Eastern Time.  At 10:29 am, shortly after American Needle, Inc. v. National Football League (an intellectual property licensing case I will be writing about later this week, in which the Supreme Court ruled the NFL is not a single entity for Antitrust purposes and the Rule of Reason applies to its IP licensing decisions) was added to the slip opinion list, the ruling number column (see R column) was filed in, which seems to be a reliable indicator based on past observances that there will be no more decisions forthcoming from the Supreme Court today.  So, once again, it seems as if the patent story of the day will be the one that never materialized.  The wait for a decision in the Bilski case continues.

The US Supreme Court did decide no fewer than 7 cases today, none of them styled Bilski v. Kappos.  The 7 decisions issued today were:

• Jefferson v. Upton
• United States v. Marcus
• Hardt v. Reliance Standard Life Ins. Co.
• United States v. O’Brien
• Lewis v. Chicago
• American Needle, Inc. v. National Football League

Today the United States Supreme Court issued four decisions, and none of them were Bilski v. Kappos.  The four decisions issued by the Court were:

Many had been pointing to May 17, 2010, as a likely day the Supreme Court would issue a decision, which was just speculation at best.  Regardless, it is now about 11:10 am, so it is fair to say that we are not going to get a decision today from the Supreme Court in Bilski v. Kappos. I have been monitoring the Supreme Court website this morning and another case has not been added to the slip opinions list since about 10:20 am, and at that time the decision numbers were filled in, showing that the last of the opinions for the day brings the total to 51 cases decided so far this term.

The Supreme Court held oral arguments in the Bilski case on November 9, 2009 (See Bilski Arguments Complete at the US Supreme Court and A Birds Eye View of the Bilski Oral Argument) and that means we have now been waiting 6 months and 8 days for a decision, and the wait continues.

What I refer to as the “pen and paper myth” has once again resurfaced on IPWatchdog.com in a comment.  The pen and paper myth goes like this: software should not be patentable because anything that can be done with pen and paper is not an invention and exclusive rights should not be given to any one person or entity.  Presumably the thought process here is that if you patent software you would prevent someone from engaging in the method using pen and paper.  Of course, that is not true, but why would a little thing like reality get in the way of making an otherwise absurd and provably incorrect statement?  Such provably wrong statements are rampant in the patent world today, particularly in light of what appears to be an all out media assault on technology and innovation that would make the persecutors of Galileo proud.

So just sit right back and I’ll tell a tale, a tale of a fateful trip, which if followed would result in far more than the wreckage of a tiny ship.  The tanking of the US economy is at stake, so take a sip of coffee, sugar up and stretch so you will be able to stay away and pay attention.  I know this is preaching to the choir for many, but for those who seemingly seek to remain clueless, if you actually pay attention you might learn something!

I almost can’t stand it any more. The anticipation is killing me! When will the United States Supreme Court issue its much anticipated decision in Bilski v. Kappos? One thing is for certain, it will be soon, but how soon? The Court term ends at the end of June, and it would be extraordinary for the Supreme Court to hold over a decision from one term to the next. It has happened in exceptionally rare circumstances in the past, typically when there were enormous Constitutional implications, such as in Marbury v. Madison and Brown v. Board of Education. While Bilski could be earth shattering in the patent world, it doesn’t even come close to Marbury or Brown, and there is absolutely no reason to anticipate the Court will hold over the decision. So that means the end of June at the latest, but I am guessing sooner, much sooner.  My prediction: April 21, 2010.

UPDATE: Still no decision as of May 17, 2010 – for more see
Another Day Without Bilski Decision, What Does It Mean?

When embarking on a software development project it is critical to understand that in order to both maximize the chance of obtaining a patent, as well as the likelihood of developing a working computer implemented process, you need to approach the task with an engineering mind set, as well as a healthy familiarity with Murphy’s Law.  Anything that can go wrong will go wrong, and once you release the process to end users a human element will complicate what should otherwise be a predictable, linear, machine driven response.  Embrace the uncertainty and challenges because the fact that software rarely, if ever, works like it should is what makes a working process patentable.

Earlier this week, on February 23, 2010, Facebook was granted US Patent No. 7,669,123, which covers a patent on a method for dynamically providing a news feed about a user of a social network. The patent application was filed on August 11, 2006, and claims priority from a string of provisional patent applications and nonprovisional patent applications, the earliest being a provisional patent application filed on December 14, 2005.

The Background of the patent explains that social networking websites have systems for tailoring connections between various users, allowing for frequent, automatic notification of changes in the information posted by other users. Apparently as of the time the patent application was filed there were existing mechanisms that allowed a user to display information about other users, including news items, but these news items were disparate and disorganized, thereby requiring users to spend time researching a news topic by searching for, identifying, and reading individual news items that are not presented in a coherent, consolidated manner. Thus, what was needed was an automatically generated display that contains information relevant to a user about another user of a social network. Essentially, it seems the resulting “invention” was a news feed for a social network. While this may have been new to social networking sites in December 2005 through August 2006, automatically updating news feeds were hardly new even then.

I am sure it will come as no great surprise to anyone who is a regular reader of IPWatchdog.com, but let me be as clear as I can be and put my bias right out in the open. I am a true believer in the patent system and I like the US approach to patentability, which is one where practically everything is patentable. There are, of course, some notable exceptions in the US. For example, you cannot patent something that is only capable of use for an illegal purpose, but if you get a rejection based on this it shows an acute lack of imagination. You don’t patent burglar tools, you patent locksmith tools! In any event, you also cannot patent an idea, laws of nature (such as E=mc², or the law of gravity), mathematical equations or things that are merely discovered. Pretty much anything else is fair game though, including software, business methods, living matter and pharmaceuticals. Given that patent watchers and software folks are becoming increasingly impatient waiting for a decision from the Supreme Court in Bilski, allow me to focus on software and business methods.

An article I published yesterday – Praying the Supremes Get Bilski Right in 2010 – has already started quite a stir, bringing out the anti-software patent advocates.  These folks always claim to be innovators and as innovators they know best and they state with an obviously flawed confidence that as innovators they can state with certainty that innovators despise software patents.  Of course, this is utter and complete nonsense.  Those who are anti-software patent are simply pro copying.  They don’t want software patents because then they cannot copy the work of others freely and without fear of being sued.  Those in the software industry who are not interested in software patents are not innovators, they are copiers.  They steal the work of others.  They also claim to have a sophisticated understanding of constitutional law and patent law, but reading what they say makes it apparent to anyone who is knowledgeable that they don’t know the first thing about law in general, let alone constitutional law or patent law in particular.  It serves no purpose to retroactively kill patents and applications that could have satisfied the standard announced in In re Bilski, but were written to satisfy the now defunct State Street test.  That is changing the rules in mid-stream and violates all ideals of fundamental fairness and due process.

Among the thousands of patents issued by the United States Patent and Trademark Office yesterday was an interesting one granted to Apple, Inc.  US Patent No. 7,634,163, titled “Remote control of electronic devices,” gives a glimpse of what might be in store for the iPhone down the road.  The patent covers a method of using a telephony device, such as an iPhone, to remotely control various tasks associated with a controlled device, such as a personal computer.  Essentially, the iPhone or next generation smart phone will allow a user to control navigation of user interfaces associated with applications or an operating system residing on the second device. The patent explains that users wish to interact with home or office computer systems from remote locations, and that a variety of applications exist that allow for such functionality, but still require the user access the remote computer over a network, such as the Internet, using a terminal emulation program, such as Telnet, or other publicly available remote control application. But at times when a remote computer system having a display device is not be available the user is pretty much out of luck. Enter the next generation smart phone with associated method.

On Friday, December 11, 2009, two more patents bit the dust thanks to the ruling of the United States Federal District Court for the Northern District of California.  This case came to my attention through Docket Report, which provides a remarkably detailed and informative daily summary of patent litigation events.  In the matter of Fuzzysharp Technologies, Inc. v. 3D Labs, Inc., LTD (Case No: C 07-5948 SBA) District Judge Saundra Brown Armstrong granted Summary Judgment for the defendant and ruled that the relevant claims of U.S. Patent No. 6,172,679 and U.S. Patent No. 6,618,047 were invalid for failure to satisfy the machine or transformation test set forth by the United States Court of Appeals for the Federal Circuit in Bilski.  It seems inevitable that the Supreme Court will alter in at least some way the Bilski test, which Justice Sotomayor continually referred to as “extreme” during oral arguments and which also troubled Justice Breyer and others.  In the meantime, because the Patent Office and District Courts continue to churn these cases, a lot of work will be wasted and money needlessly expended only to have to start all over with a new test.  Talk about ridiculous!

A long line for Bilski Oral Argument

At 2pm ET on November 9, 2009, Chief Justice John Roberts gaveled the session to a close announcing that the case had now been submitted. The arguments were good, and the Court was most assuredly hot, peppering both sides with question after question seeking to probe the issues. It is clear that the Supreme Court did their homework and spent no time gravitating to the weak points of the parties. Representing Bernard Bilski was Michael Jakes, who was continually questioned about business methods in general and whether the framers or the authors of the 1952 Patent Act could have ever contemplated business methods being patentable. Representing the United States Patent Office, Deputy Solicitor General Malcolm Stewart was questioned repeatedly with respect to the “extreme” decision reached by the Federal Circuit, not to mention the fact that the government’s position is that an old computer running new software could somehow potentially be patented as a new machine. At the end of the day I have to think that it does not bode well for Bilski and his method, but if the questions raised by the Supreme Court are any indication it seems like the Federal Circuit will be overruled and the software and medical industries will dodge a Bilski bullet.  For more analysis be sure and check back in the coming days, weeks and months, and join me for a PLI Bilski briefing on Wednesday, November 11 at 1pm ET.

Later today the United States Supreme Court will hear oral arguments in the Bilski matter. It is not an overstatement to say that the fate of much future innovation rests squarely on the Supreme Court getting this one right, so lets hope for the best and pray that they do get this one right. There is every reason to believe that the Supreme Court will accurately and appropriately reach a sensible decision relative to patentable subject matter, but there is also at least some fear that they may get it wrong, and wrong to the point where vast amounts of innovation will cease, stall and simply never develop. Because the Federal Circuit as a whole sitting en banc decided not to demonstrate judicial restraint and completely ignored long standing judicial principles associated with answering only the limited questions presented by the case, far more was said in Bilski than necessary, and it is safe to say that those in the majority in the CAFC Bilski decision could never have known the extent of the fall-out caused by opening a patentable subject matter Pandora’s Box. But that is precisely why judges are not supposed to be activist, why they are supposed to undertake a conservative approach and only decide the narrow question before them. Too bad the majority of the CAFC missed those days in law school classes where we all cursed the Supreme Court for not addressing the issue of social importance and instead decided some narrow, inconsequential issue or simply punted it back to the lower courts as a result of some technical matter.  Had they not maybe they would have known to stick to the issue at hand.

US Supreme Court Building, Washington, DC

On Monday, November 9, 2009, the United States Supreme Court will hear oral arguments in the much anticipated Bilski case, which could well decide once and for all whether business methods and software remain patentable in the United States. I will be in attendance at the oral argument, which will take place after a lunch recess. I will be joined by John White , the creator of the PLI Patent Bar Review Course and patent attorney with Berenato & White. My intention is to write and post throughout the day on Monday, leading up to the oral arguments and then in the afternoon as soon as I an after oral arguments are completed. John and I will then participate in a PLI Hot Topic Briefing on Wednesday, November 11, 2009 from 1pm to 2pm ET. We will be joined on this briefing by Scott M. Alter of Faegre & Benson LLP and Douglas R. Nemec of Skadden, Arps, Slate, Meagher & Flom LLP, both of whom along with John White are co-chairs of PLI’s 4th Annual Patent Law Institute. The title of the PLI briefing is Bilski Supreme Court Arguments: Eyewitness Report and Expert Analysis, and CLE credit is available. As always, PLI Privileged Members may attend for free, as they may do with virtually all PLI programs. Those who are not Privileged Members can also join in the briefing for a standard fee. PLI has also decided to make this briefing and other pre-recorded Bilski presentations freely available to any members of the media who may be interested in obtaining a deeper understanding of the issues surrounding this extremely important case.