A federal court hearing today could help undo the damage caused by software patents -- to the technology industry in general and open source software in particular. While experts suggest that the results of the hearing will take time to emerge, they could set important precedents that make future software patent litigation, especially by patent trolls, much harder to win. The ruling may not lead to the abolition of the patent system as some economists propose, but the results are still likely to drive change.
Patentable or not?
The case in question involves CLS Bank and Alice Corp., a patent-only company started by an Australian bank. Back in 2007, CLS could see trouble coming from some patents Alice was clearly intent on monetizing, so CLS preemptively sued for a court judgement that Alice's patents were invalid. Alice sued back for patent infringement, and it was game on.
By the time the case was heard in district court in 2009, the U.S. Supreme Court had ruled in the Bilski case, where a claim of patent infringement on business methods was rejected. That limited judgement did not finally settle the scope of the patentability of software, but it did give pause to CLS vs. Alice. Also, requests for summary judgement by both parties were declined, so the case went to court. In 2010, the district court found in favor of CLS Bank, asserting that the patents Alice Corporation were attempting to enforce were too abstract.
That was good news for most of the software industry, but Alice Corporation appealed the decision. A majority of judges on a panel at the federal circuit appeals court agreed and reversed the decision. All the same, the opinion of the court was clearly very divided, so CLS asked the court to rehear the case. A poll of the judges in the federal circuit showed a variety of opinion, so CLS's request was accepted, leading to a rare hearing of all the judges of the circuit "en banc."
That hearing is today, Friday, Feb. 8. The court asked both CLS and Alice to answer key questions for them:
a. What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible "abstract idea"; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?
b. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?
Fixing software patents
These are the critical questions for software patents, and their answers will establish case law that will affect software litigation for years to come. The first question is especially significant. The law does not permit patenting of abstract ideas, so the court is keen to be told why software does not count as "abstract." The most common way for software to be anchored to tangible reality is for it to be associated with "a computer," so the court is also keen to understand whether that device is itself abstract or whether it can be regarded as valid.
Since the questions are both complex and important for the computer industry, a wide range of third parties has offered advice in the form of friend-of-the-court (amicus) briefings. Some, such as those from patent giant IBM or from the Business Software Alliance (the voice of Microsoft and its allies), are thinly veiled attempts to assert that software patents are crucial to their businesses.
Others are more surprising. For example, British Airways speaks on behalf of an unlikely assortment of Internet companies -- Harmony, Intuit, LinkedIn, SAP, Travelocity, Twitter, and Yelp -- that has lined up against software patents.
Speaking up for open source and the digital society, we find the Electronic Frontier Foundation (EFF) and Public Knowledge. Their brief is significant because it offers the approach devised by Stanford's Professor Mark Lemley as a solution. As I wrote here in September, Lemley suggests that the patent statute of 1952 has been incorrectly interpreted concerning software.