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October 30, 2008 6:17 PM PDT

Patent ruling good or bad for tech?

by Erica Ogg
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Now that the U.S. Court of Appeals has ruled that abstract processes, or business methods, cannot be patented, it's important to look at how this could affect the tech industry.

The case in question was rejected because the patent at issue was a process not tied to a "machine," which is one standard for patentability.

Overall, it seems like a ruling that should favor companies that make hardware and software because while it narrows the types of patents that can be filed, in return should protect them from the frivolous patent suits that have flooded the industry in the past few years.

"We've seen a rise in the number of lawsuits against tech companies in the IT area specifically. Many are very questionable patents, and the patent office is overwhelmed," said Jason Schultz, acting director of The Samuelson Law, Technology & Public Policy Clinic at UC Berkeley. "It will reduce the number of patent applications which are filed in the IT space--especially by these questionable entities or companies trying to patent trivial things."

"Trivial things" like broadly defined behaviors, or obvious ideas, such as credit-card processes for e-commerce, or shopping carts for Web sites--things that some companies have attempted to patent that have more to do with a process and less to do with a machine.

One of the advantages of this type of decision is "it allows the patent office to make quick and easy rejections instead of deep, technical rejections, which are intense substantive analytical decisions," added Schultz.

In other words the entire patenting process could be sped up because there would be fewer patents filed over time.

The nonprofit Washington, D.C.-based Computer and Communication Industry Association agreed it would be a boon to the companies it represents.

"The Federal Circuit's opinion implicitly recognizes that an out-of-control patent system was not promoting progress, but rather impeding it," said CCIA President Ed Black. "The standard articulated in this case should limit the outrageous business method and software patents that we have recently seen without undermining the incentive to innovate in these areas."

Some tech companies worried the ruling could go too far, but it doesn't appear that's what happened. It doesn't necessarily mean that more patents on higher-quality hardware or software will be rejected right away, it will just require a little finesse. Most tech companies should be safe, as long as the process they're trying to patent it tied to a computer, which definitely counts as a machine, according to Brent Yamashita, partner in the patent litigation group for DLA Piper.

The decision "may be adverse for some business method patents that already exist, but in most cases a skillful patent attorney would be able to still get a patent for his or her client...by making sure the process being described is tied in with the actual machine or tangible such as a computer," said Yamashita.

"There are already are many patents drafted that way. In the future, practitioners just need to be careful to make sure they don't just describe a process in the abstract," he noted.

That means instead of giving a broad description of a product (like listening to music from a remote device) they have to be much more specific and narrow about what they claim to have invented (how the process of listening remotely is tied to a specific device or service).

In all, "I think (it) will be good for everybody," said Schultz.

Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur. E-mail Erica.
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by nicmart October 30, 2008 7:11 PM PDT
Does this mean that Amazon's ridiculous patent on "one-click" ordering is toast?
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by victor_sf October 31, 2008 1:41 AM PDT
sure hope so
by sanenazok October 31, 2008 10:02 AM PDT
Just read the opinion:
Purported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances.
One click patent is completely "representative of physical objects or substances" so no this decision doesn't seem to impact that at all.
by nicmart October 31, 2008 2:29 PM PDT
What physical object or substance does one-click represent?
by sanenazok November 1, 2008 9:11 AM PDT
@nicmart - are you kidding? Geez what could an online checkout process represent....I dunno...maybe a STORE CHECKOUT process! Hey and one-click represents having a "personal cashier" who remembers the customer and knows their payment preferences.
by someguy999 October 30, 2008 7:14 PM PDT
thank god, someone finally grew a brain in the patent office!
Reply to this comment
by sanenazok October 31, 2008 10:02 AM PDT
It's the federal circuit court (pres. Regan's idea) not the Patent Office that is narrowing these rights.
by smallvoice October 30, 2008 8:27 PM PDT
People "discover" a new pharmaceutical formula, or a new mechanism.
They don't "invent" stuff, because, the only one who invented any thing is God.
"In the beginning, God created the heaven and the earth."

It is wrong to steal somebody's discovery or idea.
But, what's wrong with helping others even if they don't come and ask for it, as long as
they are thankful for it?
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by billmosby October 31, 2008 2:14 AM PDT
So does every idea that combines an unpatentable algorithm with an unpatentable generic computer concept now not almost automatically become patentable? Sounds like perhaps so! What becomes of all the trivia granted patents on this basis since the 90s now?
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by daves_done October 31, 2008 11:17 AM PDT
I can't see how you could combine 2 un-patentable things and make something patentable. If there is some proprietary code that when run on a computer performs certain tasks that doesn't suddenly make it a patentable invention. I can go out and buy the same 'un-patentable' hardware and write my own code to reach the same end. That's why there are a lot of programs out there that do the same thing (ie: send email, run a web server, etc...).
by thetarget October 31, 2008 3:45 AM PDT
Patents should be abolished in my opinion. I just don't like, what is mine should be mine theory.
Reply to this comment
by nicmart October 31, 2008 6:50 AM PDT
If you would please post your address I'm sure a lot of people will be happy to show in fact that they share your distaste for "what is mine should be mine" by carrying away what is presently yours in theory.
by ausernamenoonehaschosen October 31, 2008 4:31 AM PDT
It wasn't the USPTO's fault, they have been screaming about this for years (on top of many other things, including the patenting of living organisms). They couldn't do anything since higher government controls what they do, and how they do it.
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by DrollTroll November 1, 2008 4:06 AM PDT
People, I think we're not clear on how the branches of government function. THe Federal Circuit decides the legality of laws (or Agency regulations derived from laws)--judiciary branch. The patent laws were passed by the Congress -- legislative branch. If there's any dislike of these patent laws, make it known (via lobby groups) to your Congressperson and they'll pass better patent laws that comply with legal requirements. The Federal Circuit might've been Pres Regan's [sic] idea (judicial branch) but neither the concept of the court nor its appointees represent Reagan nor any subsequent president.'s specific patent policy. Blame the Congresspeople who just doled out billions of your bucks to those least deserving.
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