The US Court of Appeals for the Federal Circuit (CAFC) in Washington DC has decided that in the future, instead of automatically granting a patent for a business practice, there will be a specific testing procedure to determine how patentable is that process. The decision is a nearly complete reversal of the court's controversial State Street Bank judgment of 1998, which started the stampede for patenting business practices.
Many people say the problem with a lot of business and software patents is that they describe simple things that many people consider normal daily procedures.
The ruling is likely to hit certain industries very hard, especially insurance, banking, accounting, and software. The decision is great for open source advocates. But it could mean a permanent change in the value of intangible assets, which comprise approximately 70 per cent of the average high-tech company’s market capitalization. With the world's economy sliding downhill at an increasing pace each day, this decision could cost US companies billions of dollars. Pamela Jones at Groklaw told the Examiner that because Microsoft doesn't make many machines, much of its patent portfolio just went up in smoke.
There is a speculation going on about if there will be an appeal in the US Supreme Court. Some legal experts say yes; others say it's not very likely because of the way the decision was worded.
So, many high-tech companies like Microsoft, Oracle might not earn as much money from software patent sector as they used to do. But, at the same time this decision will save a lot of companies cash by removing the need for endless patent protection schemes.
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4 comments:
As stated, intangible assets are the core of most technology companies. While the current patent process needs to be reviewed, the new process needs to have input from the companies who rely on it so heavily.
As stated, companies like Microsoft and Oracle stand to be greatly impacted by a change. With companies such as these involved, an appeal to the Supreme Court is almost certain.
Business patents should be reviewed to insure these are valid patents. Companies do not need patents on simple processes only to attempt to gain a competitive advantage. Only processes and software that is absolutely unique to a certain company should be allowed. This revised practice of patents should help to increase competition and level the playing field a bit in the technology sector.
Group 1
The decision that the US Court of Appeals has just taken is not something new in many countries as in the rest of the world, many countries do not grant patents on business pratices. Patents are usually granted on new inventions which are prefered to be useful to businesses and the society.
When it comes to software patents, many debates such as whether the software is patentable or not or whether granting a patent to a sofware will discourage futher innovation are raised. These are important concerns because in today's high tech environment some people create stuffs just to play around with their computer while others invent something that is really useful to the society. Therefore the need to differentiate what is patentable or not in the software industry is very important and should be enforced.
In conclusion, in either case, tangible or not tangible goods, and in this case of software patents, the need to define if the good is really patentable or not, is very important. It does not make any sens to grant a patent on any single good or practice just because nobody else has created it or done that before. We think that authorities in charge of granting patents should take in considerations many criteria beside just the newness of the good or practice and this is what the US Court of Appeals is enforcing.
Some of the patents today are getting a little ridiculous. People are putting a patent on anything these days it seems like. I think that the government should put up some sort of testing protocol for considering patents for businesses or individuals for software. This way the patent would be for a process or a program that is unique and not readily copied by another business or individual. This can save time and money for both businesses for not having to purchase patents and protect them from potential threats. The only downfall, would be that certain software that should be patented may not be due to new legislation. This would lose money for a business or individual who could not redeem royalties for the patent. But, I certainly think that the government should test these patents before it grants them.
Group 1 said it perfectly, "the current patent process needs to be reviewed, but the new process needs to have the input from the companies who heavily rely on it." This could be a good thing if there are tests done to see if the process is patentable and if so it will help eliminate those that should not be patented such as normal daily procedures. The big concern that has been brought up is that processes that really should be patented may no be due to the testing and new laws that were passed. Defining what is patentable or not will be very important because we do not want to lower competition and this law should actually increase competition if it is executed correctly. If the endless schemes for patent protection are removed then, many companies should be able to save money.
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