The Volokh Conspiracy

Bilski, Business Method Patents, and the Problem of the Second Step:
Last week the en banc Federal Circuit heard argument in Ex Parte Bilski, an important case on the patentability of so-called "business method" patents. You can read the many briefs in the case here, and find links to the oral argument here.

  Back before I started teaching, I was very interested in patent law and wrote a short essay on the topic of business method patents. In light of Bilski, I decided to post it on SSRN: Computers and the Patent System: The Problem of the Second Step, 28 Rutgers Computer & Tech. L.J. 47 (2002). From the introduction:
Why have computers created such a headache for the patent system? My argument is that the invention of the general purpose computer has baffled the patent system by breaking down the traditional one-step analytical framework of new inventions into two analytical steps. Unlike traditional machines and processes, general purpose computers divide the brains of the operation (the algorithm) from the brawn (the hardware). Patent law is ill-equipped to respond to this bifurcation. Instead, patent law's one-step conceptual framework forces us to confront an all-or-nothing choice between two unsatisfying alternatives: either we can grant computerized algorithms too much protection, or too little. Either every algorithm is patentable subject matter, or none are.
  I haven't dabbled in patent law since writing that essay, but I figured it might be of possible interest to those following the Bilski case.
CSBaad:
Orin, thanks for posting your article, I found it interesting.

As a non-lawyer and a computer programmer, I have to say that I have a very big problem with software patents. Part of the problem is that covered in your article.

The perhaps bigger issue is that the patent office seems completely overloaded, and utterly without the technical knowledge or ability to evaluate software patents, thus we get a lot of obvious patents, patents with clear prior art, and a lot of general patents that cover far more than they should. I don't know how this is fixable.

Also, do I understand correctly that software patents do not exist in the EU?
5.12.2008 5:44pm
Adam J:
CSBaad: "I don't know how this is fixable." Hopefully the next generation is smarter? It's a huge skillset one must learn to be an effective patent examiner.
5.12.2008 5:57pm
Paul Milligan (mail) (www):
As another programmer, I also have a problem with software patents.

IMO, there should be no such thing. Software should be governed by copyright only, not patent.

Software is words and numbers, written. As such, it should be treated as any other written work.

The idea that someone can patent the idea of 'click this button to check out' on a computer screen is insane.
5.12.2008 6:06pm
Kazinski:
As a computer programmer I second the notions that algorithims or business models should not be patentable. Perhaps microcode should be patentable, or software that works hand in hand with patentable hardware, but for the most part software just piggy backs on real inventions, and while it adds value it is innovation not an invention.
5.12.2008 6:38pm
MLS:
Bilski et al. pertains to what interpretation should be given to Section 101 to Title 35. It presents the important question whether or not "process/methods" can be patented if they are not tied to a piece of "hardware" or do not change a "physical thing" into another "physical thing". In this regard it is a more difficult case than what has to date been associated with "business methods" and "software".

The problem here is that the courts have had foisted upon them the responsibility of determining policy (what type of subject matter should qualify under Title 35 and what type should not) that should be defined by Congress. At best, congressional shirking of its responsibility has led to ad hoc policy choices by courts ill suited to decide such matters.

In the final analysis, one must ask the question if 101 should even be a consideration under our patent laws? There are many who believe that it the absence of congressional action the tried and true 102, 103, 112 analysis should rule the day.
5.12.2008 7:09pm
Fub:
Kazinski wrote at 5.12.2008 6:38pm:
As a computer programmer I second the notions that algorithims or business models should not be patentable.
I'll secondjoin the rising chorus here. Amen.
Perhaps microcode should be patentable, or software that works hand in hand with patentable hardware, but for the most part software just piggy backs on real inventions, and while it adds value it is innovation not an invention.
I've seen somewhat the opposite done where the code is the heart of the invention -- patent everything but the detailed code. Disclose software function, but not the code itself. So the (otherwise patentable) hardware is patented, but the software is not patented or its detailed code disclosed. Duplicating the device's function would be difficult without the original code.
5.12.2008 8:11pm
Kirk:
YAPASP*!

----------------------------------------------------

*Yet Another Programmer Against Software Patents


And yes, of course I'm against business process patents too.
5.13.2008 12:13am
Soronel Haetir (mail):
I must add a contrary voice in the software patent direction. While I agree with the "click here to check-out" or "buy it now" examples as being obvious business models. I do not feel the same way about fields such as compression and encryption.

Do we really want to force the latter into special purpose hardware that is thus made more expensive? Couple that with the attendant loss in actual security experienced when encryption algorithms are not published and examined.
5.13.2008 10:37am
MLS:
Apparently software and business method patents cause a great deal of consternation because they are relatively new to industries that have not hitherto paid them any heed. As expected, such patents generate a significant amount of suspicion and a general reaction that they will hamper innovation. Experience informs me that such reactions are completely understandable given a general lack of familiarity with what a patent actually entails and the fact its breadth is limited by what a patent actually claims, which is certainly much, much more circumscribed than many appear to believe.

One point that may be worth mentioning is that should these two types of subject matter be deemed outside the embrace of our patent laws, the virtually assured response by inventors will be to seek refuge under trade secret law, as well as the control of such trade secrets, to the extent they may be shared with others, under very restrictive licensing agreements. Importantly, patents are solely creatures of civil law, and no criminal penalties attach. The same cannot be said about trade secrets, both under state and federal law. Certainly this is not an insignificant difference.

While reasonable minds can differ on whether or not patents actually fulfill one of their underlying purposes of encouraging public disclosure, I do have to wonder if by denying protection under our patent laws we may create a situation where disclosure is curtailed?
5.13.2008 12:39pm