Friday, July 02, 2010

Patenting business methods: Bilski v. Kappos

Just started following Stephen Forte when I ran into his take on the Supreme Court decision re business method patents.

> I could go and patent my implementation of Scrum since it is a business process and then turn around an sue all of you since I think you are using it.

This is a common misperception. There are some important hurdles to clear before you can patent something; they keep 99% (though clearly not all) of the frivolous stuff out. You can't hold a valid patent on something you didn't invent yourself (or in collaboration with all named inventors), and you have to conceive of it (and then claim it) before others had already begun practicing your invention.  In fact, once you've been practicing your invention in public for a year, even YOU can't patent it.  That's the US; in many countries, the moment you go public, you've lost your chance to patent.

Thus, even if you manage to find a Scrum style you can claim as yours, and patent it, and go to court, if the party you're suing demonstrates that they were already practicing your method before your "claim date", then not only do you lose the suit, but your patent gets invalidated.  An invalid patent is worthless.  You can't collect license fees on it, and you can't sue anyone else ever again with it.

So, there are some reasonable limits to the system, and that's one of my favorites.  Every time you take your patent to court, there's a risk you might blow it up.

> [Bilski] did not invent anything, just a creative way to hedge commodities.

Well, the case turned on the fact that he did not invent any thing.  Methods of doing things are entirely patentable, if they have a tangible output.  The problem with a business method is that its components and output are too "meta": it's a way of organizing and running an abstraction (which is basically what a business, certainly a corporation, is).  Bilski apparently had a new, useful, and original method, since all of those are required to obtain a patent; but there was no physical component, so it was not patentable. 

Patent law is historically all about tangible products, or methods of doing things to tangible products.  Software was considered unpatentable until someone hit on the idea of claiming them as instructions coded for a tangible machine to perform.  In other words, you don't claim the algorithm; you claim the execution of the algorithm by a machine.  Business methods are still trying to find their breakthrough angle into the realm of the patentable.  The Bilski decision was a setback, and a moment of sanity, but it hasn't really settled much.

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