Supreme Court agrees to tackle software patents again

Supreme Court agrees to tackle software patents again

Summary: Once more the Supreme Court is going to have a shot to kill off software and business-practice patents. Hopefully they'll get it right this time.


The Supreme Court of the United States (SCOTUS) is taking on another patent case, Alice Corporation Pty. Ltd. v. CLS Bank International (PDF Link), which has the potential to rock our software patents. Whether SCOTUS will or not join the movement toward patent reform is another question entirely.


In this case, Alice International, an Australian company, has a patent, Systems and computer program products for exchanging an obligation, Patent No. 7,725,375. It describes a method for two parties to safely exchange currency or other financial instruments. Alice was also granted other related patents. In May 2007, Alice was sued by CLS Bank International. CLS claimed that the patents were invalid and unenforceable. A related argument was that all the patents only codified ancient business practices on a computer, hence there's no patentable invention here.

In the resulting patent battle, one side after the other has been on top. The U.S. Court of Appeals for the Federal Circuit (Fed. Cir.), which covers patent litigation, then took upon itself the Herculean task "of issuing clarifying standards on computer-implemented inventions — the task at which it ultimately failed because it could not assemble a majority for a single approach."

Now, SCOTUS is going to attempt to untangle the knot. Why this case matters to people outside the lawsuit, according to the Electronic Frontier Foundation (EFF), is that SCOTUS is being asked to decide "whether an abstract idea (such as using an escrow agent as part of a financial transaction) can be patented if, instead of claiming the idea itself, the applicant claims it's a computer system that implements the idea." The broader issues are whether software or business methods can be patented.

SCOTUS has made decisions on this before in recent years, notably in SCOTUS's 2010 Bilski decision, where the Court essentially punted on these vital issues. This lead to Software Freedom Law Center chairman Eben Moglen aptly observing at the time that the decision made, that it set patent reform back by a decade.

Of course, SCOTUS may not make a firm decision this time either. Certainly Fed. Ctr. didn't come to any broad conclusions. On one side, Judge Alan Lourie argued that "appending generic computer functionality" to an otherwise abstract concept was not enough to make it non-abstract, or somehow patentable.

On the other side, Judge Kimberly Moore, argued that "Let’s be clear: if all of these claims, including the system claims, are not patent-eligible, this case is the death of hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications patents."

To Judge Moore that would be a bad thing. Opponents of software and business practice patents, and the patent trolls that go with them, would welcome such a good result.

We'll see in 2014 how SCOTUS will untie this knot, or whether the court will just issue a narrow, cutting decision to the Gordian knot of intellectual property patents. I'm hoping that SCOTUS will rid of software patents once and for all, but they've disappointed me before, and I fear they'll do so again. 

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Topics: Enterprise Software, Government US, Legal, Patents

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  • One phrase tells what the outcome will be:

    "this case is the death of hundreds of thousands of patents"

    The USCOTUS is not going to invalidate U.S. software patents. Remember, this is same court that ruled corporations are people, except that people go to jail for breaking laws, while corporations just have to pay pennies on the dollar to buy their way clear.
    • Not necessarily

      The Supreme Court has made very disruptive decision in the past, and the members of the court that first held that corporations are persons for the purposes of the 14th Amendment are long dead.

      Since the Bilski decision said that abstract concepts are not patentable, it looks like the patent in question is an obvious candidate for voiding, but the devil is in the details as usual. May the Justices decide well.
      John L. Ries
    • Yeah but that's a pretty assinine assertion. They could and probably

      should just rule that software codifying an existing business method in unpatentable as the business method codified serves as prior art. That doesn't in any way invalidate the hundreds of thousands of software patents that are out there for things that are novel. This would be the rational move. This way you invalidate bonehead crap apples slide to unlock switch because it's just a gui representation of pre-existing physical slider switches, and amazons "shopping cart" crap, but not invalidating a unique sort algorithm or a compression algorithm.
      Johnny Vegas
    • People Corps

      All the rights and none of the responsibilities.
    • Right. Because no one at Enron went to Jail.

      If you argue that corporations aren't people, then neither are unions.

      Patents are specifically mandated in the U.S. Constitution.
      • Wrong

        Congress is allowed to authorize the issuing of patents "for limited times", but an act of Congress to scrap the whole system and void all existing patents would be completely constitutional. Patent and copyright legislation are permitted, but not mandated.

        And unions are corporations too; their members have rights, but the organizations don't.
        John L. Ries
        • We are agreed, then. Corporations should have the same

          ability to make political contributions, endorse candidates, etc. that unions do.
          • No, quite the opposite

            Neither corporations, nor unions should be able to contribute to political campaigns. If employees or members/stockholders want to do so then they can do it on their own. And I've stated publicly and still believe that money spent on political activity (to include lobbying) should never be treated as a business expense.
            John L. Ries
        • True. An act of congress can scrap the patent system.

          The courts cannot.
      • re: Right...

        > If you argue that corporations aren't people, then neither are unions.

        I would argue that, certainly. Clearly, corporations and unions are not people. The founders declared that the rights of people are "endowed by their creator." Well, people create corporations (unions are corporations) so people can decide what rights they're endowed with. Make sense?
        none none
        • People create corporations...

          ...but governments charter them, grant them legal recognition, and most importantly, confer on them identities distinct from those of their members/owners (the most important one being limited liability). And legislatures can impose whatever conditions on these acts that they think proper, or prohibit them entirely. While it is convenient for governments to do these things and it may be in the public interest, they're not required; if they don't, nobody's rights are violated.
          John L. Ries
          • Pretty please let me edit my posts

            "...but governments charter them, grant them legal recognition, confer on them identities distinct from those of their members/owners, and grant them privileges not accorded to random groups of people (the most important one being limited liability)."
            John L. Ries
          • Ditto labor unions.

            All the Supreme Court essentially did was say that corporations can have the same political powers as unions.
          • There is a difference, though

            Corporations, whether they are for profit or not, operate under state-issued charters and properly have no rights apart from those of their members (bad Supreme Court precedent aside), but only the privileges granted to them by law. But people don't need corporate charters to organize; unincorporated businesses and associations have existed from time immemorial and can do whatever their individual members can do as long as they can't be classified as criminal conspiracies.

            So if a group of individuals want to cooperate with each other for lawful purposes (to include petitioning their employers for redress of grievances), there is no law to stop them anywhere in the free world.
            John L. Ries
          • Forgot to mention...

            ...governments are not obliged to recognize entities created by means other than those provided by law. A group of people can form a club or other organization, but unless it follows legally established procedures for securing legal recognition, it doesn't exist as far as the law is concerned (it's just a group of people).
            John L. Ries
      • They aren't...

        Corporations have no voting power. Corporations have no ability to hold a government office. A Corporation does not have the right to bear arms, nor does it have a physical body with which to do it. You can't send a Corporation to jail. You can't send a Corporation to go get you lunch, or to take your sick relative to the hospital. A Corporation is NOT A PERSON. It's a legal grouping of people, you twit. They didn't send "Enron" to jail, they sent some of their lawbreaking employees to jail.

        The same is true of Unions. You don't talk to the whole Union as one person and then expect everyone to speak to you in perfect unison as one person. No, you talk to a representative...
        Stephen Dycus
        • Not true

          What you are saying is simply not true.

          1. Corporations have no voting power? Yes, they do. They pretty much own the government. Funnel millions of dollars into their pockets and get pretty much whatever they want (even anonymously thanks to Citizens United). That sounds like voting power to me.
          2. Corporations can't hold government office? Yes, they do. How many ex-execs now hold government office, and pretty much vote in favor of corporations at the expense of the people? A lot. That's pretty much the same as holding a government office.
          3. Corporations don't have the right to bear arms? But, they have whole armies at their disposal to do their bidding. Look at the NYPD army protecting Wall Street criminals at the taxpayer expense, no less. Countless cases all over the place of people bullied and arrested by police forces at the request of Corporations. Pretty much the same thing as 'bearing arms'.

          Corporations can't directly do any of the things you state, so they do it indirectly. It's pretty much the same thing.

          4. Corporations can't go to jail? Ok...finally you got one right. They can do pretty much whatever they want, and no one goes to jail. But, protest against them? Off to jail.

          The Corporations own the government. This is why SCOTUS will not kill off hundreds of thousands of patents unless the largest Corporations deem it necessary, for some reason. Like, they are the ones being attacked by these patent trolls. Once the largest Corporations become targets, then you will see the patents disappear.
          • Semantics

            1. Semantics. You know that I was referring to the ability to actually cast a vote.
            2. Semantics. You can't vote for Google for President.
            3. Semantics. Bank of America can't "aim" a physical gun at you.

            You're referring to how the GOVERNMENT treats corporations. They are giving them these rights. I'm saying that they *shouldn't* have these rights because they are NOT PEOPLE. Just because the government gives them rights does not suddenly make them human.

            You're arguing with the wrong person, you idiot.
            Stephen Dycus
          • Bank of America can't point a gun at you, yet

            The courts, fortunately, have not held that corporations have the right to raise and maintain standing armies (apparently, that's not part of the right to keep and bear arms). In this country, only the US government can do that.
            John L. Ries
          • And...

            ...while corporations can't go to jail, their officers sure can. Just ask Bernie Ebbers about that one. And corporations can be dissolved, but usually that only happens if one flagrantly violates its own corporate charter (to include paying the requisite taxes/fees to the chartering state).

            I figure a federal law barring corporations convicted of federal felonies from engaging in interstate commerce for the amount of time an individual convicted of the same offense would be imprisoned would have a beneficial effect. And states should be allowed to bar out of state corporations with felony convictions from doing business in state (directly or indirectly). The state issuing the charter, or course, could simply provide for the charters of such corporations to be revoked (by the sentencing court, of course).
            John L. Ries