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IP, Patent

Chief Judge Of Patent Appeals Court Resurrects ‘State Street’ And Approves Software Patents

Patent eligibility (sometimes confusingly referred to as patentability) seem to have come full circle.  In decades past, a series of decisions from the US Supreme Court raised doubt about patent eligibility of business methods and computer software implemented inventions.  Then, in 1998, the court responsible for all appeals in patent cases wrote the now infamous decision in State Street Bank v. Signature Financial, allowing broad patent eligibility for any invention that produces a “useful, concrete and tangible result.”

This was the rule for more than a decade until the same court issued a dramatic reversal by rejecting Bernard Bilski’s patent application and instructing the patent office and courts to strike down patents that were not sufficiently tied to a machine, or did not transform an article into a different state.  While the Supreme Court sympathized with the court’s animosity toward the specific patent application at issue, it found this so-called “machine or transformation” far too rigid and re-emphasized those decades old decisions.  Like a gift-wrapped bone to patent litigators, the Supreme Court’s rejection Bernard Bilski’s patent left thousands of others in legal limbo, with follow-on decisions both approving and rejecting software-implemented inventions.

The latest installment in this saga resurrected a lawsuit filed against Hulu for a patent related to internet-based copyrighted content distribution.  Chief Judge Randall Rader disagreed with a lower court ruling dismissing the patent owner’s case, and made remarks strangely reminiscent of the State Street “useful, concrete and tangible” test, saying:

The application of an abstract idea to a “new and useful end” is the type of invention that the Supreme Court has described as deserving of patent protection.

In the process, the Chief Judge also took the time to stress that software implemented inventions cannot be categorically excluded:

In this context, this court examines as well the contention that the software programming necessary to facilitate the invention deserves no patent protection or amounts to abstract subject matter …

The digital computer may be considered by some the greatest invention of the twentieth century, and both this court and the Patent Office have long acknowledged that “improvements thereof” through interchangeable software or hardware enhancements deserve patent protection. Far from abstract, advances in computer technology—both hardware and software—drive innovation in every area of scientific and technical endeavor.

As long as patent eligibility is indeterminate, patent owners and licensees alike pay the price in the form of legal fees, delays and (potentially) years and money wasted on “paper” patents that courts yank away at will.  But the Chief Judge clearly stakes out his position–not only in this decision, but in his previous opinions as well–that software and business methods are by no means excluded from the patenting process, preferring those inventions to stand (or fall) on the merits of their disclosure and the quality of improvements made to the prior art.

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Discussion

4 thoughts on “Chief Judge Of Patent Appeals Court Resurrects ‘State Street’ And Approves Software Patents

  1. “But the Chief Judge clearly stakes out his position–not only in this decision, but in his previous opinions as well–that software and business methods are by no means excluded from the patenting process, preferring those inventions to stand (or fall) on the merits of their disclosure and the quality of improvements made to the prior art.”

    Except where, in his subjective opinion there is something abstract about the method (see his opinion in Bilski).

    Face it, he called down the thunder and now he’s trying desperately to not reap whirlwind.

    In other words, Rader would prefer it if 101 is simply a subjective inquiry subject only to his whims and not held ot any objective standard.

    Posted by 6 | September 16, 2011, 12:31 pm

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  1. Pingback: The Future Of Patent Licensing In Europe « Gametime IP - October 17, 2011

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