Bilski v. Kappos – SCOTUS Opinion App tesler scam trade

Bilski was just decided by the Supreme Court.  The opinion will take a while to digest.  I was honestly hoping that this case would kill software patents, but for now the opposite appears to be true software will continue to suffer under patents and  State Street could now stand for patentablity of software, here are some of the quotes from the court:

Software survives for now:

As numerous amicus briefs argue, the ma- chine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medi- cine techniques, and inventions based on linear program- ming, data compression, and the manipulation of digital signals. See, e.g., Brief for Business Software Alliance 24– 25; Brief for Biotechnology Industry Organization et al. 14–27; Brief for Boston Patent Law Association 8–15; Brief for Houston Intellectual Property Law Association 17–22; Brief for Dolby Labs., Inc., et al. 9–10.

In the course of applying the machine-or-transformation test to emerging technologies, courts may pose questions of such intricacy and refinement that they risk obscuring the larger object of securing patents for valuable inventions without transgressing the public domain. The dissent by Judge Rader refers to some of these difficulties. 545 F. 3d, at 1015. As a result, in deciding whether previously unforeseen inventions qualify as patentable “process[es],” it may not make sense to require courts to confine themselves to asking the questions posed by the machine- or-transformation test. Section 101″s terms suggest that new technologies may call for new inquiries. See Benson, supra, at 71 (to “freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology[,] . . . is not our purpose”).

But the Information Age my need to change that:

It is important to emphasize that the Court today is not commenting on the patentability of any particular invention, let alone holding that any of the above-mentioned technologies from the Information Age should or should not receive patent protection. This Age puts the possibility of innovation in the hands of more people and raises new difficulties for the patent law. With ever more people trying to innovate and thus seeking patent protections for their inventions, the patent law faces a great challenge in striking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of general principles. Nothing in this opinion should be read to take a position on where that balance ought to be struck.

Quick Comment: this paragraph is a mixed bag the language over “not granting monopolies over procedures that others would discover by independent, creative application of general principles” could be the key to throwing out a lot of bad software patents.

State Street Survives for now & stands for Software Patents, Footnote 40 – Concurrence by Stevens:

Forty years later, Judge Rich authored the State Street opinion that some have understood to make business methods patentable. But State Street dealt with whether a piece of software could be patented and addressed only claims directed at machines, not processes. His opinion may therefore be better understood merely as holding that an otherwise patentable process is not unpatentable simply because it is directed toward the conduct of doing business—an issue the Court has no occasion to address today. See State Street, 149 F. 3d, at 1375

There will be much more to come on this later. For a review of the Bilski case generally check out Bill Hiness post: Bilski v. Kappos: Background & Commentary.

Bernard Bilski developed a method for managing risk in the commodity market, like the energy market where prices may skyrocket during a severe winter. Bilski’s idea was to introduce a third-party intermediary into the transaction who would purchase the commodity (e.g., coal) from the seller (e.g., coal mining company) at some fixed price, based on a historical average, and sell it to the buyer (e.g., power plant) at another fixed price. Since the buyer and seller’s prices are fixed, they are both protected from sudden price fluctuations and are not vulnerable to the risk inherent in the market. Bilski filed an application for a patent for his method, describing it in such vague terms that it could be applied to almost any transaction.

The U.S. Patent and Trademark Office (PTO) denied Bilski’s application because, according to the patent examiner, the method that Bilski developed was “not implemented on a specific apparatus and merely manipulates an abstract idea . . . without any limitation to a practical application” and therefore was not something that could be patented. The PTO’s appeal board and the U.S. Court of Appeals disagreed as to the proper test to determine what was patentable but agreed that Bilski’s method was not something that was eligible to be patented. The case now lies before the U.S. Supreme Court, whose decision may help clarify U.S. patent law and give guidance to the PTO and the lower courts.

The patent law statute allows an inventor an exclusive monopoly right for “any new and useful process, machine, manufacture, or composition of matter” (subject to some additional conditions). Determining what those categories encompass is a matter of interpretation left to the PTO and the courts. A business method, such as Bilski’s, is clearly not a “machine, manufacture, or composition of matter” and so must fall within the meaning of “process” in order to be eligible for a patent.

The U.S. Supreme Court had previously limited the broad meaning of “process” by excluding the laws of nature, natural phenomena, and abstract ideas from patent protection, stating that they are the “basic tools of scientific and technological work” and are “free to all men.” In upholding the decision against Bilski, the U.S. Court of Appeals recognized the meaning of “process” was limited and applied the “machine or transformation” test, used in an earlier U.S. Supreme Court decision, to determine whether a particular process is eligible to be patented. Under the “machine or transformation” test a process must either be tied to a particular machine or must “transform a particular article into a different state or thing.” The U.S. Court of Appeals held that Bilski’s method did not satisfy the first branch of the test because it was not limited to a specific machine (or even a machine at all) and it failed on the second branch of the test because transformations of “public or private legal obligations or relationships, business risks, or other such abstractions . . . are not physical objects or substances, and they are not representative of physical objects or substances.” The U.S. Court of Appeals insisted that processes must have some physical connection in order to be eligible for a patent.

During oral arguments to the U.S. Supreme Court, the Supreme Court Justices were not overly receptive to the idea of patenting intangible business methods either. Chief Justice Roberts compared Bilski’s method of hedging risk with a method for maximizing wealth where one buys low and sells high, and suggested that that would be patentable if Bilski’s method was. Justice Breyer asked whether his method of teaching antitrust law would be patentable, claiming “it kept 80 percent of the students awake” and “they learned things.”

The decision by the U.S. Supreme Court could have far reaching consequences apart from business methods because software also falls within the “process” category and would be subject to the same test.

Consider IBM’s patent on changing the color in an email message based upon the email’s destination and the cultural perspective of that region (U.S. 7,529,804). This patent gives IBM the exclusive right to change lettering appearing red, for instance, in an email originating from the U.S. to a different color when the email is destined to China, because whereas red might signal a warning in the U.S. it is considered good luck in China and might not impart the same level of importance.

Note that the issue is not with someone copying IBM’s source code and using it (that would be protected under copyright law). The issue is with preventing others from using the same idea that they might have developed on their own. This is because patent law allows the patent holder to prevent others from making, selling, using, or importing the patented invention even if the other person independently came up with the invention. This is especially relevant in the realm of software development where a multitude of simple processes have been patented. Any software developer could invest considerable amounts of time and money on a project only to inadvertently infringe upon one of the 200,000 software patents and have the project grind to a halt.

Even with a clearer test for patent eligibility the issue of software patents may not be resolved. A glimpse of what is yet to come may be found in the Amicus Briefs filed by Microsoft and Redhat. While both companies argue for a test where patents are tied to something physical, Redhat argues that such a test would exclude software whereas Microsoft argues that loading software on a computer changes the physical structure of the hard drive and would be sufficient to meet the requirements of the test.

Stay tuned.

I love Miro’s new video converter! It is easy to use and cross platform. I am curious how they are dealing with the software patent issues… Here is Miro’s press release:

Creative Commons is launching a new project which can empower local organizations to engage in CC research, outreach and integrations:

the Catalyst Grants program, through which we will be awarding grants of $1000 to $10,000 to researchers, educators and technologists around the world. Grant recipients will be selected through a rigorous public review and transparent evaluation process involving representatives from CC’s affiliate institutions.

Catalyst Grants will make it possible for individuals and organizations to harness the power of Creative Commons. A grant might enable a group in a developing country to research how Open Educational Resources can positively impact its community. Another could pay for a programmer to add CC license support to tools for publishing and distributing news. A third could fund a study of entrepreneurs using Creative Commons licenses to create a new class of socially responsible businesses.

But we can’t do it without your help. Our goal is to raise $100,000 from CC supporters like you to fund the Catalyst Grants. Please donate today to help spread our mission of openness and innovation across cultural and national boundaries.

I like seeing CC experiment with grant giving.  A lot of what has made CC so successful is the actions of a community that has embraced the licenses on mass.  These grants enable the members of the community to target specific needs and draw on local experts to address these needs.

PS: this reminds me a bit of the Awesome Foundation due to the low transactional cost compared with many other grants.

Free Software Foundation, who runs some of my favorite programs including Defective by Design & End Software Patents, is looking for a new campaign manager:

The FSF is hiring a Campaigns Manager to be part of a team that directs and coordinates our campaigns for software freedom. This is an opportunity to take a senior role in the organization that sponsors the GNU project, publishes the GNU GPL and works to promote the message that  software freedom is a civil liberty.

The position is based at our offices in downtown Boston, MA. Unfortunately, because of current visa restrictions in the US, only US-based applicants can be considered at this time.

The Campaigns Manager implements the FSF communications strategy and works as part of a team to develop and implement issue campaigns and community resources, acting as a spokesperson on matters of software freedom. The Campaigns Manager handles writing, editing, speaking, and research related to these activist and program efforts. She/he coordinates the GNU Chief Webmaster and the other Webmaster volunteers to develop FSF and GNU web sites, as well as related graphic design tasks as assigned by management. The position also plans and implements proposals to increase fundraising, and serves as a main point of contact between the Foundation and the free software community.

The salary is fixed at $53,851/year and that is non-negotiable.

Requirements:

* You must be a free software activist with a commitment to computer user freedom and be able to demonstrate your knowledge of the policies and work of the Foundation.

* Have persuasive written communication and public speaking skills in matters of software and computing.

* Possess the technical skills of a Webmaster in designing, developing, promoting and maintaining a website, including ability to write valid HTML and CSS by hand, experience with web accessibility techniques, and some familiarity with version control and Web publishing systems.

* Extensive experience using the GNU/Linux operating system, including basic shell knowledge and familiarity with the process of researching and choosing free software tools for collaborative projects.

* Graphic design experience and working knowledge of free software design tools for web and print.

* Experience of organizing events and handling community relations in a diplomatic way.

* Able to demonstrate that you can work in a precise way, handling multiple campaign tasks.

Resumes and cover letters must be submitted via email to
hiring at fsf.org . The email must contain the subject line, “Campaigns
Manager”. Cover letters and resumes should be in plain text files, Open
Document Format (ODF) or PDF. Resumes not sent via email or submissions
that do not follow these instructions will be ignored.