Microsoft hasn't exactly been the best friend to FOSS, but it's hard to feel good about the company's $290 million loss to i4i. The company lost its appeal in front of the Supreme Court, which has affirmed that issued patents are presumed valid. So much for common sense.
Why is this bad news for FOSS? It's not because Microsoft has to pay a stiff fine — the software giant may not have the deepest pockets of all software companies these days, but it's not going to suffer unduly here.
It's bad news because Microsoft's proposed standard for challenging issued patents was shot down unanimously (with Chief Justice Roberts recusing himself) by the Supreme Court. The court had the opportunity to at least restore a little sanity to the whole software patent mess, and decided instead to let it ride.
Microsoft had, essentially, proposed that the patent office had failed to consider i4i's own software on the market a year before the patent was granted. In that case, Microsoft was arguing that the standard of proof required to show that the i4i patent was invalid was too high and was arguing for a lower standard when "an invalidity defense rests on evidence that was never considered by the PTO in the examination process." The Supreme Court rejected this, and upheld the presumption that the patent office is doing its job.
Clearly, this isn't the case. The U.S. Patent Office has repeatedly failed to effectively consider prior art when it comes to software patents. Leaving aside the obvious objection that software and business method patents shouldn't be valid anyway, there's a great deal of evidence that the patent office drops the ball on a regular basis and approves software patent applications that are either obvious or should not be granted due to prior art. The fact that the court chose to overlook this and uphold a standard that presumes patents should be considered valid is bad news for FOSS — not to mention the rest of the software industry.
One might hope that this would persuade Microsoft to join against software patents, but that seems unlikely. Even with a $290 million judgment against it, Microsoft seems to find more benefit in being able to wield its patent portfolio against competitors like Barnes & Noble.
Even though I have a hard time mustering sympathy for Microsoft, this is a big loss for a big swath of the software industry, including FOSS projects and companies that work extensively with FOSS.