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US Supremes prod software patent law

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The long-running battle to redefine what is patentable reached the US Supreme Court on Monday, and the back-and-forth between the Justices and competing counsel hinted that their decision will result in relatively minor changes to existing law - not the sweeping overhaul feared by the software and medical technology industries.

That said, attempting to predict a decision by the Supremes based on their comments during in-court arguments is a risky business.

The core of the case in question, Bilski v. Kappos, is tightly defined. But depending upon how the Court rules, it could have far-reaching consequences. At issue is a "business practices" patent put forth by a firm that had devised a mathematical algorithm to analyze weather data with the goal of hedging energy-consumption risk. The US Patent and Trademark Office rejected the patent application, claiming that it merely defined an abstract idea - solving a math problem - and that being non-physical, it was outside the scope of patent protection.

Seems simple enough. But when the United States Court of Appeals for the Federal Circuit heard Bilski's appeal, their October 30, 2008 decision (PDF) redefined the previous rule for patentability of such a claims from whether it "produces a useful, concrete and tangible result" and instead cited and affirmed a previous Supreme Court ruling that used what has become known as the "machine-or-transformation test."

Which means, as explained in the Court of Appeals ruling: "A claimed process is surely patent-eligible under [patent law] if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing."

The machine-or-transformation test has been derided by some as being a cold and unappetizing leftover from the Industrial Revolution no long applicable to the digital complexities of the Information Age, but praised by others as being a practical guide to whether an idea is more than a mere abstract concept and instead an actual, verifiable, and practical process.

In support of the first group, for example, came an amicus brief (PDF) from a group of self-described "Entreprenurial Software Companies" which cited a study that argues: "Patents in this context afford a unique opportunity to the small startup. The patent system grants the small firm an automatic stay of competitive activity that remains in force long enough for the firm to attempt to develop its technology."

In other words, it keep competitors at bay until the company can develop a patentable concept that could survive the more-stringent machine-or-transformation test.

From the second group, however, came an amicus brief (PDF) in support of the Court of Appeals ruling. This brief, from the Bank of America, Google, and others, claimed that to not use a strict definition of patentability leads to a condition in which companies can file patents "not to make productive use of them, but to extract licensing fees from businesses that apply and improve those ideas and methods in real-world products and services."

The number of amicus briefs was striking in itself - 68 in total - but even more interesting was the fact that 26 of them were not in support of either party in the dispute, but which instead simply argued that the patent system is broken and needs the Supreme Court to help fix it.

And so on Monday the case had its day in court - the Supreme Court, to be exact. The arguments and the Justices' questioning make for interesting reading (PDF), not only for the matters discussed but also for a peek into the personalities of the Justices themselves.

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