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What the Bilski Ruling Might Mean to Software Patents, Microsoft

Posted in America, Europe, Free/Libre Software, Law, Microsoft, Patents at 7:34 am by Dr. Roy Schestowitz

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IN previous posts about the re Bilski ruling [1, 2, 3], a cursory look at the ruling was all there was to be offered.

Now that people have taken a more careful look, discussion among experts leads to better assessment and understanding of the decision’s impact on both business methods and software patents. Are they doomed altogether? Which ones? Would they hold water in court? Will they still be possible to obtain? What happens to existing such patents which applicants spent enormous amounts of time and money on? What does this mean to companies whose patent portfolio is their main or only business? These are all interesting questions and a subject that will be debated for quite some time.

Courtesy of and thanks to the work of Digital Majority, here are some posts of interest.

Prematurely-announced Victory?

On the subject on software patents:

State Street Overruled… PERIOD

The Federal Circuit has overruled State Street and software patents are no longer available as they have come to be available over the last 10 to 15 years.

Software and business method patents take a hit

Certainly we are not at the end of this, but for the first time in a long time advocates of software patents have been put on the defensive. This is really big.

Effect on Microsoft

Microsoft has for long relied on the last resort which is software patents. It also kept itself occupied trying to expand patentability of software to the many countries which reject them (e.g. India). The ruling regarding Bilski could , but as predicted some weeks ago by Stop Software Patents people, it’s sensible to expect pro-software patents lobbyists to strike back.

Either way, here are some posts or interest:

Microsoft Has A Problem: Software Patents Go Up In Smoke

So, companies like Microsoft would have a lot to rue about as a huge portion of their patent portfolio has become circumspect. This not only would rob them of revenues in terms of royalties but would also open up a lot of space for competition as well. Special thanks to Red Hat to take up the fight and providing crucial data to the court to take this decision.

US court throws out most software patents – Microsoft has a problem

Much of the patent portfolio of some of the world’s biggest software companies has become worthless overnight, thanks to a ruling yesterday by the US patent court.

The Scariest Things in Open Source

Another scary thing for those in Open Source would be patents. Honestly, thanks to the legal work done by so many in the FOSS world (big props to you guys), patents have more or less become a huge paper tiger. They still scare a lot of people, but in the end, all the saber rattling by the big boys (Microsoft, Oracle, Apple, Intel, etc, etc) have more or less rendered patents as nothing more than dead trees splattered with ink.

Reality Check

Some more moderate analysis from Mike Masnick:

Is There Still A Big Loophole For Software And Business Method Patents?

It’s not a full rejection of software or business model patents, but I think that’s for the best in the long run. It’s better to create proper overall rules, rather than trying to carve out exemptions and creating a patchwork of rules. However, I’m still worried about the loopholes, and how quickly lawyers with tons of patents seem ready to leap through those loopholes.

As a little bit of background and historical perspective:

Federal Circuit Reins in Business Method Patents

During the 1990s, it handed down its Alappat and State Street decisions, which gave a green light to patents on software and business methods, two categories of innovation that had traditionally been regarded as ineligible for patent protection. Even as the evidence mounted earlier this decade that these patents were hindering, rather than promoting, technological innovation, the Federal Circuit showed no sign of backing down.

The decision (or clarification) which will come from EPO is important too [1, 2, 3, 4]. Suffice to say, as IPKat pointed out last week, this may have an impact on the UK as well (Nokia did some damage there [1, 2, 3]). In addition, re Bilski could affect the judgment of the EPO.

“[The EPO] can’t distinguish between hardware and software so the patents get issued anyway”.”

Marshall Phelps, Microsoft

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