11.24.08

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Bilski Case Working Against Patent Trolls and Against Software Patents — Already

Posted in Courtroom, IBM, Microsoft, Patents at 12:52 pm by Dr. Roy Schestowitz

Supreme court
U.S. Supreme Court, March 2008

TODAY’S NEWS is encouraging because there are finally signs of resistance rather than cowardly settlement. The Facebook case that we mentioned the other day is summoning re Bilski [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33] as precedence to fend off the patent trolls.

Nick O’Neill of AllFacebook thinks Facebook might have to pay up (and he has a copy of the patent up on his site, for the curious). I’m not sure. A top patent court has recently ruled against the validity of patents that don’t involve some sort of “machine or transformation” — I wonder what “machine or transformation” Leader has to offer here? I’m no legal expert, but it’s not clear to me, after reading through the patent. I’m guessing Facebook, if not the rest of the web-based tech industry, won’t be losing too much sleep over it tonight.

Holders of software patents are already warned that their patents might be worthless and that they may require revision.

Clients with issued software patents, medical method patents, and other similar patents may want to run a “Bilski test” on the claims of those patents, particularly if there is a likelihood that the patents will be asserted in the future. If those patents raise any concerns, it may be advisable to correct potential problems or insure against them (e.g., by adding new, more-patentable claims) via reissue proceedings or continuation practice. However, clients should understand that amendments made in a reissue proceeding can provide competitors with additional defenses against a patent. As for patent applications that are still pending, applicants should develop strategies for adding the sorts of elements identified by the Federal Circuit to the claims – in most cases, we expect this can be done without significantly affecting the strength of the claims. For patents currently in litigation, defendants should re-check their defenses, but should be careful not to over-read Bilski, and plaintiffs may really want to look into correcting suspect patents.

As we showed back in May, even the pharmaceuticals are beginning to question the notion of intellectual monopolies as they decide to collaborate instead. Irrespective of this, there’s some fear there of the Bilski ruling.

In re Bilski: Trouble Ahead for Biotech?

[...]

While Bilski purports to clarify the test for analyzing the patent-eligibility of processes, many key questions remain unanswered: When is a process sufficiently tied to a particular apparatus or machine? When is the use of a recited machine more than “insignificant extra-solution activity”? When is the claimed transformation “central to the purpose of the claimed process”? When does a claimed invention foreclose substantially all uses of a fundamental principle, such as an algorithm or natural phenomenon? Does Bilski have implications for method of treatment claims? And what about non-process claims, such as claims to a peptide or polynucleotide that was isolated and purified from nature?

Those companies ought to concentrate on bringing drugs to markets in urgent need. Patents encourage overpricing and isolation, i.e. slow progress. They often lead to death and make a morbid society, even literally speaking. So whatever the outcome of re Bilski may be, it’s a clearly step in the right direction, which is rare.

On the downside, IBM and Cisco seem to be playing ball with the patent trolls of Intellectual Ventures, claiming that they do so in order to battle other trolls.

Now, two former executives of Myhrvold’s Bellevue patent licensing firm are striking out on their own with support from IBM and Cisco to serve as a counterweight to patent holding firms like Intellectual Ventures. Today, RPX Corp. is launching what it dubs “defensive patent aggregation” — a membership club of sorts where large and small technology companies pool capital in order to order to protect themselves from patent litigation.

What about small companies? Fighting fire with fire is not a solution. It only leads to burning. IBM should just step up and end software patents already.

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5 Comments

  1. Z-man said,

    November 26, 2008 at 11:53 am

    Gravatar

    “Patents encourage overpricing and isolation, i.e. slow progress.”

    Imagine you are at a company struggling to make a vaccine to HIV. You devote substantial resources to creating this vaccine and finally after millions of dollars of investment you are successful.

    You put the drug on the vaccine on the market and of course it sells very well. Then big generic drug company purchases the vaccine and reverse engineers it in about a month. Then they produce it at about half the price as your company due to their massive infrastructure.

    They sell it at price far less than yours and people stop buying from you. Your borrowers come to collect and your company goes bankrupt.

    The moral of the story: wait till someone else does the work then copy.

    The end result? Why invest in innovation when someone can easily copy you? Everyone ends up waiting around until someone else does it.

    You are so right, the patents slows progress.

  2. Roy Schestowitz said,

    November 26, 2008 at 12:01 pm

    Gravatar

    You seem to have missed this link about the notion of collaboration, which drug companies harness.

    Going by the logic you present, IBM, Intel and other companies are foolish to invest in Linux because others ‘steal’ their ideas (and code).

  3. Jose_X said,

    November 26, 2008 at 4:56 pm

    Gravatar

    Z-man,

    Very clever. Spend money by yourself without collaborating so that you can complain how you need a lucrative monopoly.

    Without patents, more companies would have to collaborate.

    As for software patents, the cost to invent, mass-produce, market, distribute, etc, in the field of software is very low. This is different from some other industries. If I wanted to invent a drug and take it to market in an attempt to profit, I would have to sit on the sidelines forever perhaps. Z-man, you are speaking about vultures who have money to put on R&D but would rather not. You are not speaking about the many that want to invent but only can when the overhead costs are very low.. as is the case in software when you enable collaboration over the Internet or otherwise.

    Imagine giving out patents for joke-telling. [Wow, that was such a creative approach.. patent it!]

    Imagine if the practice and creation of law was hampered by patents. [Hey, you just won a case, now go defend your gains from everyone holding patents on the tactics you used to win the case.]

    Every job/profession has methods and processes that can be patented if limits are not imposed (the “machine or transformation” limits).

    Note that while useful drug compounds get invented sparingly. Useful chunks of software get invented daily many times through. There is no shortage of software inventors because the costs to effectively participate and/or make money with it are so low.

  4. Roy Schestowitz said,

    November 26, 2008 at 5:08 pm

    Gravatar

    Reductions in patents maximise reach (more people access software, literature, media, or life-saving medicine), development (more people working alongside), and profit (related to reach, scarcity), unless profit is treated as selfish gain. This means that both ends of the spectrum win.

  5. stuart said,

    December 7, 2008 at 12:56 pm

    Gravatar

    But — computers are devices but not machines.

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