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August 6, 2014

What Software Patents Have Wrought: 'A lottery ticket to a lawsuit'

 

There used to be a time when software companies were far more concerned about copyright protection than patent protection for their code. But over the last couple decades attitudes and business strategies changed as the courts changed the law.
 
In 1980 Congress added “computer program” to the copyright law, which is designed to protect creative, intellectual, or artistic forms, or "works."  Copyright protection attaches to “original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”
 
By contrast, the U.S. patent system was designed to protect items such as mousetraps and plows, tangible innovations, not expression. In 1982, because of a new patent appellate court, obtaining patents was made easier. The appeal of ease, combined with courts in the 1990s overturning rulings against granting software patents, resulted in a flood of software patents (which seek to protect a function rather than an algorithm), business methods patents. and even patents for mental processes. As a result, many more patent lawsuits were filed.
 
Given the fuzzy lines around software patents, it is no surprise that they and business method patents, and to some extent design patents, attract more legal challenges. Low-quality software patents, numbering in the thousands, seems to be the root of the increased litigiousness. And hazy definitions attract so-called “trolls” (think trial lawyers in the patent world).
 
According to data from James Bessen, Peter Neuhäusler, John Turner and Jonathan Williams, the number of patent-lawsuit defendants has more than doubled in the last few years. And almost 75 percent of patent lawsuit defendants have been sued over software patents.
 
While Congress dithers, the courts have addressed the problem at the margins. Over the last several years, the Supreme Court has challenged the patentability of abstract ideas or expressions, while never expressly ruling them as unpatentable. In June, in Alice Corp. v. CLS Bank, the Supreme Court added to this history by holding that abstract ideas are not patentable and that merely implementing them via computer was not enough to make them so.
 
While this decision provides some help, it leaves unclear the future of “computer-implemented” claims. Congress must act to clarify the situation and end the very real harm to the overall patent system. How real is the harm?
 
Elon Musk was recently quoted in the Washington Post that he was opening up all of Tesla’s electric patents, in part to spur more electric car manufacturing, but he also “described a personal shift on the patent issue. ‘When I started out with my first company, Zip2, I thought patents were a good thing and worked hard to obtain them,’ he wrote. But, Musk said, he quickly realized ‘receiving a patent really just meant that you bought a lottery ticket to a lawsuit.’”


 

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