09.06.16

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The US Supreme Court Cemented the End of Software Patents by Rejecting Them and Refusing to Revisit the Subject After Alice

Posted in America, Courtroom, Patents at 11:31 am by Dr. Roy Schestowitz

Turning a blind eye to the highest court in the United States is unwise

Blind leading the blind
Blind leading the blind

Summary: An update regarding the sordid state of patents on software in the US, where one has to rely on examiners and/or judges ignoring the US Supreme Court in order to have these granted/upheld

Software patents have always been the primary topic here. Longtime readers can attest to that. Thankfully, after Alice (2014), no imminent resurgence of software patents is expected, at least not in the near future. Several months ago when it was predicted that the SCOTUS (US Supreme Court) would deal with low-quality design patents of Apple we noted that no SCOTUS case was bound to reconsider the patentability of software. There wasn’t even another Bilski in the pipeline.

“Thankfully, after Alice (2014), no imminent resurgence of software patents is expected, at least not in the near future.”According to this new SCOTUS preview from Patently-O, only design patents would be questioned. Nothing would change when it comes to software patents, at least not at SCOTUS. To quote Patently-O: “When the Supreme Court’s October 2016 Term begins in a few weeks, its first patent hearing will be the design patent damages case of Samsung v. Apple. In Samsung, the Court asks: Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component? The statute at issue – 35 U.S.C. § 289 – indicates that, someone who (without license) “applies” the patented design (or colorable imitation thereof) to an article of manufacture, “shall be liable to the owner to the extent of his total profit.” Up to now, courts have repeatedly held that the “profits” are profits associated with the product (i.e., the article of manufacture) being sold, but Samsung is asking that the profits be limited only to components of the product closely associated with the patented design. Although Apple’s position is supported by both the text and history and is the approach easiest to calculate, I expect that many on the Court will be drawn to the potential unjust outcomes of that approach. Apple wins in a 4-4 split. Oral arguments are set for October 11, 2016.”

We previously explained why design patents are similar if not overlapping software patents (the user interface angle in particular). We therefore hope that Apple will lose this case — a case which we wrote about nearly half a dozen times so far this year.

“When it comes to software patents, empirical evidence typically shows that their existence harms innovation and causes more harm than good.”“Professors Feldman and Lemley are well-known for their skepticism about the current form of the patent system,” wrote Neil Wilkof yesterday in IP Kat. It’s not a bad post and here is what it says about the seminal/cited paper: “The authors make a basic distinction between ex ante and ex post with respect to technology transfer and licensing. A significant amount of meaningful technology transfer is “ex ante”, namely it takes place before the patent issues, and sometimes even before it is filed. To the contrary, licensing demands and litigation leading to payment for freedom to operate, occurs “ex post”, after the patent is issued, sometimes long after grant. Even in the life sciences field, where one might expect more evidence that technology transfer would be taking place, the authors found that the “modal license” was primarily for payment for freedom to operate rather than technological transfer of the underlying technology.”

When it comes to software patents, empirical evidence typically shows that their existence harms innovation and causes more harm than good. “Despite Alice,” Benjamin Henrion wrote yesterday, “specialized patents courts keeps issuing software patents in the US” (known issue), but as long as the Supreme Court repudiates such nonsense we’re probably OK in the long run. Upon appeals, e.g. to CAFC (a bit pricey), software patents almost always die. Lower courts need to heed the warning and stop ignoring policies imposed (or handed down) from above.

“Suffice to say, “open source software” as the above names it (Free/libre software) is not compatible with software patents.”Dropbox, according to this page, has “4 new DROPBOX patent applications,” to quote Fresh Patents. They are pursuing software patents (the titles suggest so) on all sorts of basic Web operations. Will USPTO examiners be negligent enough to grant in spite of prior art and Alice? We shall see. One sure thing is, the courts (the higher, the better) won’t tolerate these.

We recently wrote about Blockstream making a patent pledge despite having no patents. This new report suggests that Blockchain technology faces patent-related problems. To quote IP Watch: “Blockchains, such as the well-known bitcoin, are not yet well-defined but are creating a lot of hype, speakers at a 23 August Intellectual Property Owners’ Association webinar said. Two things are clear so far, they said: the technology is in its infancy, and there are lots of unresolved questions about what is patentable and how IP laws intersect with the mostly open source software used in the systems.”

“If the Supreme Court was to be respected rather than ignored for convenience (or maximisation of profit), there would no longer be trials over software patents, let alone new grants of software patents.”Suffice to say, “open source software” as the above names it (Free/libre software) is not compatible with software patents. Neither are APIs (lesser form of “open source”), yet according to this new patent survey, there are more than 23,414 API patents. To quote D-Zone: “After looking through the 23,414 API related patents from between 2005 and present day from 4,283 companies, it is clear that the API patent game will be all about which companies decide to litigate using their “intellectual property.” There is definitely a lot of education that could occur across all industries where these patents will be put to work, and hopefully we can see some reforms at the USPTO regarding how important it is to the economy that the APIs themselves to remain open and reusable, but I think that ultimately the world of API patents will be hammered out in courts across the United States, and other countries around the world.”

Oracle now claims copyrights on APIs, in a case which involves a mixture of software patents and copyrights inherited from Sun upon acquisition. We hope that readers are able to see just how profound an impact all these efforts to apply ‘IP’ to code can have. When can developers go back to coding in peace? Well, hopefully when all courts and patent examiners pay attention to Alice and apply the corresponding test. If the Supreme Court was to be respected rather than ignored for convenience (or maximisation of profit), there would no longer be trials over software patents, let alone new grants of software patents.

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