Software Patents-New Word On The Street?
November 10, 2009
It was the year 1998, and you probably bought Chumbawamba’s album at Best Buy for $9.99. Web-surfers across the nation were happily logging in to the sound of “You Got Mail” as the Supreme Court deliberated the case of State Street Bank & Trust Co. v. Signature Financial Group, Inc.
Thus, what began as a business model morphed into a landmark decision that has since rocked the business, legal and software worlds. State Street, for the first time, rendered, “a mathematical algorithm, formula, or calculation” eligible for patent protection where it could be applied practically to, “produce a ‘useful concrete and tangible result.’” [1] Although the Supreme Court in State Street maintained that mathematical formulas alone were not eligible for patent protection, since computer algorithms are nothing more than the math upon which all software is based, the State Street decision essentially rolled out the red carpet for the age of software patents – An era that may well be nearing its close.
Math has always been applied practically in a multitude of ways that produce, “useful, concrete and tangible results.” However, before software, math has been specifically excluded from patent protection, and the fairly recent determination that software algorithms are a patentable medium represents a highly criticized departure from a fundamental concept of intellectual property law upon which the patent system was once based.[2] Nevertheless, as a consequence of State Street, software patents have become an industry standard.
Fast-forward to 2009, and in a shaky economy value is king. For a tenth of the price online shoppers can download the meatiest portions of the now “retro” Chumbawamba album for a mere $.99/track. In the spirit of these bleaker economic times – Eleven years and perhaps twice as many billions of taxpayer dollars later – the Supreme Court may be set to reverse the very precedent it set in State Street.
The legitimization of software patents that resulted from State Street caused a literal tidal wave of patent applications. The current backlog at the U.S. Patent Office is greater than 600,000, and patent litigation now totals more than $2 billion per year. [3] Each new software patent granted to Silicon Valley giants is one less algorithm available to open source software developers, and every new online product or service is now estimated to infringe thousands of existing software patents. All of these dilemmas have given Today’s Supreme Court cause to reevaluate the reasoning behind the State Street decision.
By granting certiorari to the case of Bilski v. Doll on June 1, 2009, the Supreme Court will soon decide whether the types of patents enabled by State Street will remain as such in the next decade of the 21st Century. While this issue remains in flux, it will be interesting to see whether the Supreme Court will reverse precedent in favor of substantial practical and economic concerns. Moreover, the fate of the software development industry hangs in the balance, as any modification from State Street may ultimately shape the course of software development in the foreseeable future.
[1] State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368, 1373 (Fed. Cir. 1998).
[2] Id.
[3] http://www.thebigmoney.com/articles/judgments/2009/11/09/can-you-patent-cat-and-laser-pointer
