Feeds

US court blocks Amazon-style patent trolls

Back to reality

The essential guide to IT transformation

A US court has made the task of getting patent protection for software and business methods a la Amazon's "One-Click" a whole lot more difficult.

The ruling means businesses and individuals with a penchant for patenting trivial or abstract concepts, and suing over infringement, may soon receive a swift kick to the intangibles.

The Court of Appeals for the Federal Circuit on Thursday upheld a earlier decision by the US Patent Office that rejected a patent application for a method of hedging risks in commodities trading.

The 9-3 decision rejects the court's own earlier landmark State Street Bank ruling of what can be patented. Instead, it favors earlier Supreme Court guideline that maintains a stricter, two-pronged standard.

The court decided in order for software or a business method to be eligible for patent protection, it has to either be tied to a particular machine or apparatus, or transform a physical object into something else.

That compares to State Street's much more lenient "useful, concrete and tangible result" inquiry, which first opened up business methods as something patentable.

The risk-hedging strategy in the case therefore can't pass muster because nothing it can arguably "transform" is material. From the majority opinion, penned by Chief Judge Michel Newman:

Purported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances... Given its admitted failure to meet the machine implementation part of the test as well, the claim entirely fails the machine-or-transformation test and is not drawn to patent-eligible subject matter.

For software patents, it's theoretically much easier to get by the standard on virtue of it requiring computer or device - which counts as a machine. But the decision could leave many business method patents open to attack.

Possibly the most notorious of these is Amazon's "One-Click" patent, where the bookseller effectively claimed exclusive rights to storing customer records in order to skip the step of using an online shopping cart. Another example is Netflix suing Blockbuster in 2006 for getting into the subscription movie rental business.

The court's decision still may raise some tricky questions about what's acceptable. For example, could Amazon's website be considered a "machine?" Is simply saying the patent is "for a computer", "particular" enough?

The case is also widely expected to be appealed to the Supreme Court, so we've definitely not heard the last of this. A full copy of the decision is available here (PDF). ®

5 things you didn’t know about cloud backup

More from The Register

next story
Hello, police, El Reg here. Are we a bunch of terrorists now?
Do Brits risk arrest for watching beheading video nasty? We asked the fuzz
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
NBN Co claims 96 mbps download speeds for FTTN trial
Umina trial also delivers 30 mbps uploads, but exact rig used not revealed
True fact: 1 in 4 Brits are now TERRORISTS
YouGov poll reveals terrible truth about the enemy within
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
Felony charges? Harsh! Alleged Anon hackers plead guilty to misdemeanours
US judge questions harsh sentence sought by prosecutors
This'll end well: US govt says car-to-car jibber-jabber will SAVE lives
Department of Transportation starts cogs turning for another wireless comms standard
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?