{"id":24585,"date":"2014-04-10T09:49:03","date_gmt":"2014-04-10T13:49:03","guid":{"rendered":"http:\/\/www.iposgoode.ca\/?p=24585"},"modified":"2014-04-10T09:49:03","modified_gmt":"2014-04-10T13:49:03","slug":"the-hard-decision-about-software-patents","status":"publish","type":"post","link":"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2014\/04\/10\/the-hard-decision-about-software-patents\/","title":{"rendered":"The Hard Decision about Software Patents"},"content":{"rendered":"

On Monday, March 31st, the United States Supreme Court began hearing oral arguments in the case of\u00a0Alice Corporation Pty Ltd v CLS Bank International<\/a><\/i>. Many hope<\/a> that this ruling will help bring clarity to the patentability of software and business processes under US patent law.<\/p>\n

<\/p>\n

Are computer-implemented inventions patentable subject matter?\u00a0 <\/strong><\/p>\n

This case between Alice Corporation Pty Ltd (Alice) and CLS Bank International (CLS) is one of many recent disputes stemming from the ambiguity of the patentability of software and business processes in the United States. (The IPilogue has previously covered a similar issue\u00a0in\u00a0Ultramercial v Hulu<\/a><\/i>\u00a0here<\/a>.) The patents in question all involve a computerized system for processing financial transactions.\u00a0A particularly contested area\u00a0in the\u00a0dispute is the scope of patentable subject matter, and the various legal tests involving abstract ideas and inventive concepts in patent claims. The question Alice's petition for a writ of certiori<\/a> poses is:<\/p>\n

Whether claims to computer-implemented inventions \u2013 including claims to systems and machines, processes, and items of manufacture \u2013 are directed to patent-eligible subject matter within the meaning of 35 U.S.C. \u00a7 101 as interpreted by this Court<\/i>.<\/p>\n

Title 35 U.S.C. \u00a7 101 is a provision of US patent legislation<\/a> that provides:<\/p>\n

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.<\/i><\/p>\n

Alice is essentially asking the court if computer implemented inventions are patentable subject matter as processes, machines and items of manufacture under US patent law. Many viewed<\/a> this appeal to the Supreme Court as inevitable after\u00a0the decision in the\u00a0appeal to the Federal Court\u00a0resulted in 6 separate decisions spanning\u00a0125 pages<\/a>, all applying different legal analyses to the issue of patentability.<\/p>\n

Who is interested?<\/strong><\/p>\n

This case has generated an extraordinary amount of interest<\/a>, including 11 briefs filed at the petition stage where the court decides if it will hear the appeal, and 41 briefs at the merits stage where the court makes a decision. In addition, the US Solicitor General was granted permission to participate in the oral arguments. The amount of interest is indicative both of the ambiguity in the current law, and the extent of the interests at stake.<\/p>\n

Software and business process patents in general have garnered much attention recently, particularly in the US which is one of the most lucrative intellectual property markets<\/a> worldwide. Much of the debate over these kinds of patents stems from the overriding concept in patent law about the difference between implemented inventions and abstract ideas. All patent law systems share the common feature that abstract ideas and scientific principles cannot be patented. Only novel inventions that actually perform a real-world function are patentable. There are numerous areas where this distinction comes up, but it is most notable in software patents.<\/p>\n

In many jurisdictions, including the US, pure software algorithms are not patentable subject matter<\/a>. Written software code is protected by\u00a0copyright, but this only protects against verbatim reproduction. Copyright does not protect the underlying ideas, or against independent invention. As such, many software companies have looked for ways to patent software, thus expanding their monopoly beyond the literal code.<\/p>\n

One way to achieve this is by incorporating the software or business process into a larger invention, which builds upon other patentable subject matter. This has lead to the \"do it with a computer\" argument, where some criticize<\/a> patents granted for otherwise\u00a0ineligible\u00a0subject matter simply through the addition of an integrated device.<\/p>\n

What is on the line?<\/strong><\/p>\n

Much has been written recently about the scope of patent protection, particularly in light of non-practicing\u00a0entities<\/a> (NPE), some of which are pure innovation\u00a0companies, and others who obtain patent rights with the sole intent of enforcing them against infringing parties. These NPEs have been\u00a0criticized\u00a0by some industry members and\u00a0governments<\/a> [see 16:02-18:39<\/em>] alike for\u00a0taxing\u00a0innovation, and abusing the patent system without adding any benefit. This\u00a0phenomenon\u00a0has been particularly pronounced in\u00a0software\u00a0patents, which are often criticized<\/a> for being broad, ambiguous, or obvious.<\/p>\n

Conversely, many industries are increasingly deriving competitive advantage<\/a> and business value<\/a> from their business processes and software algorithms. As industry increasingly shifts to a knowledge economy, businesses have more incentive to pursue monopolies through intellectual property law for their processes and algorithms.<\/p>\n

What is the answer?<\/strong><\/p>\n

As with many areas of intellectual property law, the best decision will balance the needs of all stakeholders involved. The very nature of intellectual property is granting a time-limited, state-enforced monopoly in exchange for innovation and investment. The overriding policy goal is to encourage future developments by balancing the economic incentives of a monopoly with the need to avoid making that monopoly so broad that it stifles innovation. Hopefully the US Supreme Court, assisted by volumes of supporting briefs from a wide spectrum of parties, will be able to strike that balance for software and business process patents.<\/p>\n

 <\/p>\n

Alex Buonassisi is an IPilogue Editor and a JD Candidate at the University of British Columbia.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

On Monday, March 31st, the United States Supreme Court began hearing oral arguments in the case of\u00a0Alice Corporation Pty Ltd v CLS Bank International. Many hope that this ruling will help bring clarity to the patentability of software and business processes under US patent law.<\/p>\n","protected":false},"author":2140,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","footnotes":""},"categories":[60,141,10],"tags":[2052,2457,2458,140,11,555,2459,58],"class_list":["post-24585","post","type-post","status-publish","format-standard","hentry","category-ip","category-patentability","category-patents","tag-alex-buonassisi","tag-alice","tag-cls","tag-patentability","tag-patents","tag-software","tag-subject-matter","tag-us"],"yoast_head":"\nThe Hard Decision about Software Patents - IPOsgoode<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2014\/04\/10\/the-hard-decision-about-software-patents\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Hard Decision about Software Patents - IPOsgoode\" \/>\n<meta property=\"og:description\" content=\"On Monday, March 31st, the United States Supreme Court began hearing oral arguments in the case of\u00a0Alice Corporation Pty Ltd v CLS Bank International. 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