Intellectual property has become an area taut with tension. On the one hand, it’s seen a crucial pillar of economic growth. On the other, current protections are seen as overbroad, anticompetitive, and prone to frivolous lawsuits-so much so that they’ve spawned an entire industry that makes money by enforcing patent claims.
These companies (aka trolls) have been particularly active in the IT world, where software designers configure very common ideas into a computer based format.
Turn now to the Supreme Court, which on Monday heard arguments for Alice Corp. vs. CLS Bank International, a patent dispute over software that reduces “settlement risk” in financial transactions.
Commentators have routinely criticized the software’s premise as too abstract to warrant a patent and believe that the dispute provides an opportunity to curtail abuse. As the LA Times notes,
In recent years, all nine Supreme Court justices have voiced concerns about the expanding use of patents, saying at one point that “abstract ideas” are not eligible for patents.
They unanimously voided patents for human genes, for mathematical formulas that help companies save on energy, and for systems that help doctors decide on the right dosage of a particular drug for an individual patient.
In their attempt to clarify rules to distinguish true inventions from useful ideas that rely on a computer program, justices on Monday sounded more determined than ever to call a halt to patents for computer-driven formulas that hedge risks or predict outcomes.
However, as Roger Parloff cautions, the desire to reform may not be enough unless the Court can agree on an articulable and enforceable standard.
Though dozens of companies and trade groups and law professors have submitted or joined so-called friend-of-the-court (“amicus”) briefs in the case — including IBM (IBM), Google (GOOG), Microsoft (MSFT), Macy’s, Facebook (FB), and Twitter (TWTR) — and most of these commenters appear to be deeply skeptical of the validity of these patents, they can’t agree about precisely why they’re invalid. And that’s crucial. If the Supreme Court invalidates these patents for the wrong reason, patent examiners will be forced to deny, and lower courts to invalidate, tens of thousands of perfectly appropriate patents, which could damage what the Framers of our Constitution envisioned as the nation’s principal engine of innovation: the patent system.
Put simply, the Court agrees that the current system is unworkable but may, nevertheless, defer to the status quo for fear that a revised standard could cause unintended mischief. We’ll see if pressure built up from years of patent abuse will override the Court’s fear of an unknown hazard.