The Canadian Patents Appeal Board has ruled that business methods are not eligible for patent protection.
Hopefully this will add some weight in the same direction to the Bilski case.
The international computer manufacturer IBM has filed an amicus brief to the Bilski case in the USA, a case which is considered decisive for the future direction of software patents in the United States and potentially larger parts of the world.
The message was very clear: IBM stated that software patents are not needed to create or protect innovation. In fact they are hindering it and damaging the overall economy: «You’re creating a new 20-year monopoly for no good reason.»
This position came as a bit of a surprise considering that IBM is part of the Business Software Alliance, an organization who promoted software patents very openly during the Software Patent debate in the European Union. However, IBM lawyers have stated repeatedly on various unofficial occasions since then that the patents have not served the wealth of the company in any way.
The problem IBM is facing with software patents is very easy. The few actors in the world who had a sufficiently large budget to equip their operations with software patents are now standing unable to use them against each other because the patent portfolios are so vast that both companies would suffer serious consequences in any dispute. The reason for this is simple: IBM, just like other large companies, has a large amount of so-called «prior art», which means pre-existing software in this case.
This prior art however offers other patent holders a chance to attack IBM in revenge, because it most likely infringes on a number of patents held by the competitor. In the sum of hundreds or even thousands of patents, this means that they cannot practically be enforced, except as a defensive measure.
The only companies which are not susceptible to this type of dilemma are companies which never actually produced anything at all — so-called «non-producing entities» (NPE), or shorter, patent trolls. These companies solely exist for the purpose of holding and enforcing a software patent. As such, they contribute nothing to the state of the art while causing damage to companies that do.
Summarizing this effect, the patent system has a very negative effect on the economy indeed: it discourages innovation and productivity as a whole while promoting litigation. Thus, it is much less surprising that IBM finally realized that software patents are damaging — even to them.
In this blog:
After their failure to introduce software patents in Europe directly through two directives, then through the community patent and then finally through the «European Patent Litigation Agreement» (EPLA), the European Commission has come up with a new way to legalize software patents: the «United Patent Litigation System» (UPLS).
The proposal displays a vast amount of similarity with the EPLA, except that the highest instance is moved to a specialized patent court. Instead of judges, this court is run by «patent judges», who, just like in the EPLA, do not have a legal degree but are only trained by the European Patent Office. The European Court of Justice (ECJ) has no role to play in this and no right to review the decisions of the patent court.
This is another attempt of the patent system to move all control over patents and their applicability to the participants.
The big problem with regard to software patents is the question of invested effort. The whole debate about software patents usually evolves around the question whether or not copyright is a sufficient protection for software. In my opinion it is, which can be shown very easily:
Surely, anybody could look at your product and clone it, but that requires that person to start at step 2 and re-do your entire investment in implementing the idea. Thus, this person has no competitive advantage of taking your idea. The investment software patents protect is essentially zero. This is a large difference from developing e.g. a machine, where a lot of material is usually invested into prototypes.
At the same time, the impact is not: software patents would forbid the competitor to implement his own variant of your idea. The idea is essentially monopolized, and the cost is carried by the community.
After a long work in that area, the Foundation for a Free Information Infrastructure (FFII) has finally succeeded to get a court to invalidate Amazon’s One-Click Patent.
In the press release, the FFII representatives explain how the patent has been invalidated in two steps: first, the current claims were invalidated on the basis of lack of an inventive step, thus allowing Amazon to postulate new claims. However, these claims were dismissed as an infringement of Art. 123 EPC, revoking the patent in its entirety.
The entire debate is a clear sign that clarification of the EPC provisions would improve the situation of legal uncertainty which we’re currently suffering.