The article notes an unexpected by-product of the U.S. Supreme Court's Bilski decision: apparently, it has caused examiners to become more aggressive in rejecting software patents that represent purely abstract ideas. Of course, the line between what constitutes patentable "method" and unpatentable "idea" is murky. Nonetheless, before Bilski, the governing rule was pretty much that any method can be patented if it leads to a "useful, concrete, and tangible result," a highly liberal standard first adopted by the Federal Circuit in its State Street decision in 1998. State Street had opened the floodgates to unprecedented grants of software patents, both in number and in looseness of quality. It was precisely this idiotic outpouring of dubious patents that the Federal Circuit court itself tried to stem when it adopted the highly arbitrary "machine or transformation" test that was ultimately rejected by the Supreme Court on further appeal in Bilski. Though the Supreme Court rejected the machine-or-transformation test as a definitive standard for patentability of methods and also specifically affirmed the patentability of methods, it pointedly rejected the ultra-loose State Street test while stating that machine-or-transformation can be used to provide an important "clue" to patentability, thus signaling that the USPTO and the courts were to be much stricter in evaluating method patents in the future. In addition, four justices (in dissent) would have struck down method patents altogether. Taken all together, then, the Bilski case has begun to rein in the worst abuses in this area, even if the rejections now rest on calling out a method as being a mere abstract idea.
This all may be cold comfort to those who despise the effects of software patents but it is a significant step forward in reality to help prevent abuses. And, of course, the ultimate corrective in this area for all the mistakes made since State Street is that such patents will in time enter into the prior art. This does not help anyone today, or for the near future, but it does mean that between a stricter standard going forward and the eventual lapse of the more frivolous patents previously granted, sanity is likely to be restored to this area over time.
Of course, for the short term, the abuses will remain as a carryover from the last 12 years and there is not much that can be done about this short of congressional action redefining what constitutes patentable subject matter. Since such action is nowhere near occurring, the U.S. will likely remain a treacherous terrain for companies in the software patent area for some years to come (and that would include New Zealand companies trying to ship their products here).
four justices (in dissent) would have struck down method patents altogether
Actually, they were in concurrence. The decision was 9-0 but there were four votes for striking them altogether (Stevens), four votes for a much narrower decision taking an agnostic stance but rejecting Bilsky's patent, and Kennedy agreeing with half the first and half the second.
Yes, you are of course correct - thanks for clarifying (while the four disagreed with the majority on this point, they all agreed in the result that Bilski's patent itself was no good). The perils of doing a late-night post!
At last! Software patents hinder innovation and reward it unfairly. No need to worry, no end of capitalism here: this will just push everybody to wrap their treasured algorithms as services (e.g., Google, Facebook, …), but with the priceless advantage of not having to constantly worry about legal repercussions and liability. Small players such as start-ups and third-world companies (once this wonderful idea catches on) will benefit the most. Last, but not least, core applications are very likely to become joint, open-source efforts, increasing efficiency and productivity. Thank you, New Zealand! Hello, Utopia!
Invention patents cover, among other things, importation, manufacture, and use of the patented invention. So without US patent licenses, their US customers could be liable for infringement.
That leaves SaaS an open question. What if you send your data out to be processed in a software patent-free country and receive it back later? That's not the same as having a machine that infringes at all.
I'm not clear what the boundaries are, but I imagine that this is settled by existing patent law. Surely at sometime during the previous 200+ years, some patentholder has sued somebody in Detroit or New York for shipping materials to Canada for processing using a process or machine that was patented in the US but not in Canada.
Does anyone expect this to last when people start using NZ as a safe-harbor and major US corporations like Microsoft and Oracle lobby for repeal? It just doesn't seem plausible with a country as Westernized as NZ.
I'm assuming NZ didn't sign a free trade agreement with the US like Australia (the US-Australia free trade agreement ensures US copyright law applies to and overrides Australian copyright law).
the US-Australia free trade agreement ensures US copyright law applies to and overrides Australian copyright law
Where on earth did you get that? Yes, the free trade agreement has affected Australian copyright in some limited cases, but it nothing like as clear cut as you make out there.
There's been lots of rumbling about it when one of our honchos visits USA's honchos, but the application of the US Intellectual Property laws is one of the big problems I have with it.
Every New Zealand Prime Minister wants to be the one to score an FTA deal with the Americans. Helen Clark worked hard for the chance. John Key will no doubt work just as hard.
I think it's unlikely to happen any time soon. Barack Obama needs to get re-elected. To do that he needs the Iowa caucuses. He's not going to help out New Zealand farmers at the cost of the support of American farmers.
You're actually misinformed about American electoral politics. The Iowa caucuses (and caucuses in general) are only involved at the primary level (i.e., they select which candidate will get to run for each party). Since Obama is a sitting president, it would be highly unusual for anybody to even run against him for the Democratic nomination, let alone have any chance at getting it.
> the US-Australia free trade agreement ensures US copyright law applies to and overrides Australian copyright law).
Can you elaborate on this? I understood treaties to have no legal force in Australia until domestic laws were passed to give them force. I know there are exceptions to this rule (like Teoh) but AFAIK they don't involve overriding domestic law
Wow, that is really cool. The quotes in the article explain exactly why software patents are absolutely horrible for innovation. Pretty much every idea ever that can be written as software has been patented at this point. Any code you write is probably violating some fucking patent, and if you're making money from software you write, it's only a matter of time before the patent trolls come knocking. It absolutely disgusts me. Maybe I'll move to NZ. I'm really impressed by this, seriously.
The quotes in the article explain exactly why software patents are absolutely horrible for innovation.
Really? I thought the opposite-- they certainly make the case against overly broad patents, but then say "If an inventor has a really original and outstanding idea, then a patent might be merited."
It's these "really original and outstanding" ideas that the patent system is designed for, and why "non-obviousness" is supposed to be a requirement for a successful patent application.
What's wrong with deposit insurance? If I give my money to someone else to hold for me, don't I want some guarantees that they will give it back when I need it? Or do they cause problems elsewhere?
Yes, you want some guarantees. But it's the job of either you or your debtor to get those guarantees. Not the job of the general public.
The biggest problem is moral hazard. With outside guarantees you don't care about default risk. And debtor will compete solely on return, not on risk-adjusted return.
Without an external backer, you will watch your bank much more closely. And banks can't be watched closely enough.
This all may be cold comfort to those who despise the effects of software patents but it is a significant step forward in reality to help prevent abuses. And, of course, the ultimate corrective in this area for all the mistakes made since State Street is that such patents will in time enter into the prior art. This does not help anyone today, or for the near future, but it does mean that between a stricter standard going forward and the eventual lapse of the more frivolous patents previously granted, sanity is likely to be restored to this area over time.
Of course, for the short term, the abuses will remain as a carryover from the last 12 years and there is not much that can be done about this short of congressional action redefining what constitutes patentable subject matter. Since such action is nowhere near occurring, the U.S. will likely remain a treacherous terrain for companies in the software patent area for some years to come (and that would include New Zealand companies trying to ship their products here).