Apple Starts ‘Nuclear War’ in Patent Fight With HTC - "Apple filed a patent-infringement complaint against Taiwan’s HTC Corp. yesterday, seeking to prevent U.S. imports of phones that run Google Inc.’s Android operating system. The decision to take the case to the International Trade Commission signals that Apple wants to curb HTC’s market share gains as quickly as possible, said an expert."

The Prior Art: Inside Google's first patent trial - "Google's hard-nosed strategy for dealing with patent-holding plaintiffs gets put to the test -- and proves successful: late last month, Google won its first patent infringement lawsuit to go to a jury trial, in the Eastern District of Texas. The plaintiff was Function Media LLC, a patent holding company."

Economist: An end to frivolous patents may finally be in sight - "For society, however, the loss of competition through the granting sole rights to an individual or organisation is justified only if it stimulates the economy and delivers goods that change people’s lives for the better. [...] Instead of stimulating innovation, such [business method] patents seem more about extracting “rents” from innocent bystanders going about their business. [...] If truth be told, few inventions are really worth patenting. Time and again, surveys show that in both America and Europe companies rate superior sales and service, lead time and secrecy as far more important than patents when it comes to profiting from innovation. [...] Pursuing patents aggressively for cross-licensing agreements has little to do with encouraging innovation, though. Indeed, by increasing transaction costs, such deals are in effect a tax on innovation."

SD Times: USPTO likely to adopt 'peer-to-patent' - "Kappos said that the project “got a good level of interest. It got positive responses from examiners and the public. [The project's participants] found significant prior art, especially in non-patent literature. That's important in software, where so often it's not patented prior art. Our mission as an agency is to get the best prior art in front of examiners. There clearly is value [in the project].""

Kalow and Springut: Patentable Subject Matter After 'Bilski' - "The machine or transformation test is the current analysis that the courts and the Patent Office will take when considering whether subject matter is patentable. As both Bilski and Prometheus show, this question is not industry specific, but it is particularly important when an inventor is trying to obtain patent rights directed to processes. Because of the changing landscape, and the likelihood that whatever the Supreme Court does, there will remain unanswered questions about where the boundaries lie, the patent practitioner should always consider trying to claim processes both broadly and as tied to devices and/or causes one or more transformations."

The H: New Microsoft patent may put Linux security components at risk - "Microsoft has been granted a patent on a privilege escalation system which appears to cover the functionality of PolicyKit, which is used for fine grain authorisation on Ubuntu, Fedora, openSUSE and other Linux systems."

Groklaw: Microsoft Patents Sudo?!! - "It appears that Microsoft has just patented sudo, a personalized version of it. Here it is, patent number7617530. Thanks, USPTO, for giving Microsoft, which is already a monopoly, a monopoly on something that's been in use since 1980 and wasn't invented by Microsoft."

Ciaran O'Riordan: Bilski’s hearing and software patents - "At Monday’s hearing, neither party had the objective of abolishing software patents. The Bilski case is about a business method patent, so there was Mr. Jakes arguing that business methods should be patentable, and Mr. Stewart arguing that they shouldn’t. For software to be excluded, we’re relying on the judges (to whom we wrote an amicus brief, as did many others). There’re a few worrying statements, but there’s also a lot of hope."

Minutes of the Bilski Hearing - "Official transcript of the hearing Bilski vs. Kappos before the US Supreme Court, Nov 9 2009"

IPWatchdog: Bilski Arguments Complete at the US Supreme Court - "At 2pm ET on November 9, 2009, Chief Justice John Roberts gaveled the session to a close announcing that the case had now been submitted. The arguments were good, and the Court was most assuredly hot, peppering both sides with question after question seeking to probe the issues. It is clear that the Supreme Court did their homework"

IPWatchdog: Argument Day in Bilski at US Supreme Court - "The Supreme Court will hear oral arguments in the Bilski matter. It is not an overstatement to say that the fate of much future innovation rests squarely on the Supreme Court getting this one right. [...] In a to the point dissent Judge Rader of the Federal Circuit said virtually all that needs to be said about Bilski: "This court labors for page after page [...] to say what could have been said in a single sentence: 'Because Bilski claims merely an abstract idea, this court affirms the Board’s rejection.'" Instead [Federal Circuit] seemed to dust off an opinion that had been previously written to be unveiled when the time was right, regardless of the facts of the case. [Why else] didn’t address the single issue presented by the Bilski patent application, but rather opined about methods in general."

Business Method Patents: Technological Change, Not Judicial Activism - "The last two decades have seen an extraordinary growth in the number of patent applications for business technologies and methods. Critics of business method patents tend to assign responsibility for this development to judicial activism by the judges of the Federal Circuit especially those responsible for the decision in State Street [...] The judicial activism thesis may have a superficial appeal. [...] Yet the judicial activism thesis suffers from multiple glaring problems and plainly cannot account for the timing of the rise in business method patenting, which plainly began well before State Street."

USA Today: Software patent case arrives at Supreme Court - "With the tech industry looking on, the Supreme Court today will explore what types of inventions should be eligible for a patent in a pivotal case that could undermine such legal protections for software. A ruling that sides with the Patent Office could bar patents on processes and methods of doing business, such as online shopping techniques, medical diagnostic tests and procedures for executing trades on Wall Street. And it might even undercut patents on software."

Rob Tiller (Red Hat): Patent law must not stifle innovation - "In a world of constantly accelerating technological change, economic prosperity depends on innovation. To support such innovation, it is vital that our patent system be well-calibrated, so that overly broad patent monopolies do not choke innovation. In the last several years, patent standards have been relaxed by the courts, which has created a patent system that hinders innovation in the software industry. The Supreme Court now is considering a case, Bilski v. Kappos, that may address this critical problem."

High Court Must Lower Bar For Patents - "In upholding a lower court ruling, the federal circuit wrote that a business process (like online banking) must be `tied to a machine' or transform `a substance into a different state or thing' in order to qualify for patent protection. This `machine or transformation' test, as it is called, is too rigid to incite innovation. If the circuit court ruling is upheld, it could have a negative effect on Connecticut technology companies where the ability to patent innovations in business systems is critical to be competitive and maintain customers."

Eben Moglen: An Important Patent Law Precedent Approaches - "The SFLC and I recently filed a brief in Bilski v. Kappos, along with plenty of other lawyers, and I gave a talk about the case, and the future of patent law, this morning at Cardozo Law School. The outpouring of amicus briefs in this case, which will be heard by the Court on November 9, must be particularly noticeable to the Justices and their law clerks: a stack of dozens of third-party briefs seeking attention would have been the lunchtime talk of that inner core of the Court back when I worked there, and I'm pretty sure that hasn't changed. A high stack of amicus briefs [...] means people outside the Supreme Court think the case is important. Bilski is very important indeed."

A Math Geek's Ride to the High Court in Landmark Patent Fight - "Bernie Bilski and Rand Warsaw were just a couple of "math geeks for hire" from Pittsburgh when they applied for a patent in 1997. They had an idea for making the unpredictable predictable for utility companies: a way to make energy bills consistent, month to month, no matter what Mother Nature had in store, weatherwise. WeatherWise USA Inc. is the name of their company, in fact. What Bilski and Warsaw did not predict is that their patent application would be rejected and, on appeal, would make its way to the U.S. Supreme Court 13 years later."

Finnegan Lawyer Challenging 'Machine or Transformation' Patent Test Says He's Ready - "If the Litigation Daily were prepping for our first Supreme Court argument--no snickering, please--in a case that's considered one of the critical business controversies of the Court's term, we would be a damn sight more nervous than J. Michael Jakes of Finnegan, Henderson, Farabow, Garrett & Dunner. On Monday, Jakes is arguing Bilski v. Kappos, a closely watched IP case that will help decide whether business methods are patentable. But last Thursday afternoon, when we called him, Jakes was at his desk, sounding decidedly unfazed about his first U.S. Supreme Court argument."

Christian Science Monitor: Supreme Court to decide: What kind of innovations get a patent? - "The US Supreme Court on Monday takes up the most fundamental question in patent law: Which innovations deserve the protection of a patent? The answer holds billion-dollar implications for the American economy. At issue is whether US patent protection must be limited to inventions involving machines and transformative processes, or whether patent law also embraces nonphysical inventions like improved business methods and software innovations."

Considering that

1. Software patents are too slow. Examination takes 4 years or more. Patents limit competition for up to 20 years. The software life cycle and amortization of investments are much shorter.
2. Software patents ruin investment. A typical software can violate hundreds of patents. Established players shoot down emerging competitors with a single patent and delay creative destruction of their markets. Entrepreneurs refrain from the risk of entering a 'mined' market. Legal ambushes deter investment in the next generation by the market leaders of tomorrow.
3. Software patents are overly broad rights, as opposed to precise rights such as software copyright. Broad, intricate and clumsy rights are damaging for the market while at the same time more valuable for their holders. 'Inventors' may deliberately phrase their applications very broadly and negotiate with the patent office over breadth of the grant.
4. Software patents deprive authors of the fruits of their work. Patent regimes dilute your ownership over copyrighted works because they overlap with the realm of copyright. Software patenting closes an alleged copyright 'protection gap', which was preserved by the legislator for reasons that advise against patenting, too.
5. Software patents are not economically justified. Insufficient economic evidence supports an application of the patent system on software. On the contrary, most studies hint that software patent regimes restrain innovation.
6. Software patents reward 'hot air'. Ideas are not scarce but cheap. Their disclosure barely justifies to grant rights to prevent them happening. Developers who read software patents consider them an offence: they disclose nothing useful.
7. Software patents are difficult to research. Patent databases, software and patents are complex. Patent attorneys can do unreliable research for you. Only courts can decide if you infringe a patent. You take all risks and bills. Patent Offices admit it is impossible to find prior art in source or binary code.
8. Software patents are useless for defensive purposes. Your own patents are useless against 'patent trolls', since they do not have any product which could infringe a patent of yours. When your business bankrupts a troll will buy your 'defensive' patent and terrorise your competitors.
9. Software patents discriminate small players. They are forced to bow into cease-and-desist letters about questionable patents or settle out of court as litigation is too expensive and takes a long time. As a small player you can either pull or cut your software or take a license if available. You are excluded from fair cross-licensing deals, since you do not have enough patents to cross-license.
10. Software patents are like 'cold war' for large companies. Large companies view positively the potential to nuke competitors from the market. With cross-licensing deals they recreate a level playing field that resembles the situation without a patent system for members of the club. But weight in trolls, litigation costs, damages, royalties, product removal risks, and a shift of resources from the R&D (Research&Development) to the P&L (Patents&Litigation) department.
11. Software patents do not fit for service-oriented markets. The software market is about providing services. Patenting suits service markets badly. Patents were designed for the classic industrial sector.
12. Software patents are not written by (and for) developers. 'Inventors' can write patent applications without skills in software development and sue software developers who independently 'recreated' their 'inventions'.

We ask our parliaments and governments to do the following:

1. Pass legal clarifications to substantive patent law. Such clarifications comprise negative and positive tests for patent examiners to assess what is eligible to merit a patent. We made proposals and remain open to alternatives that contribute to the end of software patenting worldwide. Two major ones are:
   1. A claimed object that consists only of instructions for use of generic data processing hardware (universal computer), also called “program for computers” or “computer-implemented solution”, is not an invention in the sense of patent law, regardless of the form in which it is claimed.
   2. A claimed object can be an invention in the sense of patent law only if it contributes knowledge to the state of the art in a field of applied natural science.
2. Overcome a patent reform discussion trapped into "non-obviousness" The 'American disease' of patent law requires a return to real steering instruments. The patent community has been using that obviousness filter to distract reforms and to get industry backing for dismantling of more meaningful examination filters.
3. Apply sound economical justifications and impact assessments in a democratic legislative process.
4. Apply democratic reforms of patent institutions. Patent offices have to stay neutral and abstain from lobbying. They must let patent examiners contribute their first hand experiences. Persuasion for patenting based on the assumption that small enterprises just lack awareness puts preconceptions over the rationale of market choice.
5. Provide for non-infringement declarations which override enforcement of patents. Rather than you taking the risk to research patents, patent holders should declare upon you request if your product or standard infringes one of their patents. Such estoppal provides legal certainty and standard confidence.
6. Get patent professionals out of policy making. Increase the influence exercised by economists on the governance of innovation policy. The quality of professional judges cannot be exchanged for 'technical judges' without legal training and eligibility to a judicial office or administrative 'case law'.
7. Keep substantive patent law harmonisation away from Free Trade Agreements.
8. Start an open debate about the patent crisis aimed at finding solutions. Economists can easily explain to you why free rider effects make patent opposition suboptimal. Other institutional unbalances pressure patent examiners to grant permissively. Let's review the institutional incentives and start reform.

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