If you haven't been following this story it may (hopefully) turn out to be a milestone in the history of software patents: The story concerns a US financial institution, CLS Bank, and an Australian software company that holds a patent on software used to mediate escrow for financial transactions. CLS argued that the process of escrow is centuries old and therefore not patentable while Alice argued that computerizing the process met the criteria for patentability.
The case went before the US Supreme Court and this week it was adjudged that the patent was invalid. Yayy! The ruling was, however, a narrow one as it wasn't expanded so as to cover anything other than the case in hand. Boo.
For excellent and more detailed coverage of the case see Grant Goss's article Supreme Court could limit software patents in Alice case.
The issue of software patents has been dear to me for a long time and no patent brought the insanity of software patents into sharper focus than Amazon's 1-Click patent:
1-Click, also called one-click or one-click buying, is the technique of allowing customers to make online purchases with a single click, with the payment information needed to complete the purchase already entered by the user previously. More particularly, it allows an online shopper using an internet marketplace to purchase an item without having to use shopping cart software. Instead of manually inputting billing and shipping information for a purchase, a user can use one-click buying to use a predefined address and credit card number to purchase one or more items. (Wikipedia)
Yep, it's a button that performs an obvious function. There's no magic to it, it's not original, it's just a button.
A criterion for patentability in most countries is that the invention must be non-obvious to one skilled in the art. For example, in the US:
A patent for a claimed invention may not be obtained ... if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. (USPTO 35 U.S.C. 103)
When you consider a feature like 1-Click you have wonder how any professional (one skilled in the art) in the computer world wouldn't think that the concept was obvious. Indeed I think it's so obvious that it would require someone with the mind of a patent lawyer to even consider patenting something so staggeringly obvious as 1-Click.
So it was that when I heard about Alice v. CLS Bank I sought the advice of lawyers; specifically the fine people at Dorsey & Whitney LLP, a very large law firm headquartered in Minneapolis, Minnesota, with over 500 lawyers and a similar number of staff located in 19 offices in the United States, Canada, Europe, and Asia. Jennifer Spaith, a partner, commented:
In holding the claims at issue in Alice ineligible for patent protection today, the Court failed to articulate a broader standard for how to identify an unpatentable 'abstract idea’ in a claim.While we now know that implementation of a 'fundamental economic principle’ on a computer will likely be insufficient to confer patent eligibility, we are without guidance as to how to apply this to other significant industries developing intangible innovations today - collection and analysis of Big Data that is poised to revolutionize the wearable tech, security, and systems control spaces, cloud computing services, social media applications that are changing how people communicate, collaborate, and work. The Supreme Court did not offer tools for identifying patentable subject matter in these other intangible areas, so patentees will continue to battle uncertainty in these spaces.
I asked Ms. Spaith is this could lead to a broader decision that could strike down patents such as Amazon's 1-Click to which she replied:
It is difficult to predict what the impact of today’s decision will be on online technology innovations – such as that represented by Amazon’s “One-Click” patent. The decision did not go so far as to invalidate all software patents. Instead, the Court more narrowly found that the subject matter at issue in Alice was patent ineligible because the claims recited nothing more than a general computing implementation of a fundamental economic principle – in that case, intermediated settlement.
Because the Court declined to provide broader guidance on what may constitute an “abstract idea” that would require something more in the claims to render them patentable subject matter, the decision is not necessarily definitive as to existing patents or pending patent applications in other areas – including social media, mobile applications, big data analytics, and the like, which themselves may not hinge on fundamental economic principles. Moreover, patent claims may recite elements that effect an improvement in a technology or technical field, which, under today’s decision may render them patentable subject matter.
One of Ms. Spaith's colleagues, John Kennedy, had a slightly different take on the topic:
The one-click patent (claim 1) requires operations that occur based upon using a customer and product identifiers to order an item. The concept of using a customer identifier (e.g., a vendor number) to retrieve customer information is well known as is the concept of using a product identifier.
The claim does recite that the order occurs “without using a shopping cart ordering model.” So, non-patentability would likely rest on whether it using an ordering model that does not use a “shopping cart” is an abstract idea. My guess, is the answer is yes. As the purchase of a single item in the physical world typically would not entail the use of a “shopping cart.” Thus, the fact that a “shopping cart” is not used in a computerized system does not render the claim patentable in and by itself.
So, it's not certain just how the law pertaining to software patents and their obviousness and applicability will evolve but with the judgement in Alice v. CLS Bank a small but important step forward has been made. This will hopefully bring some much needed rationality to the current supremely irrational patent system that will prevent large companies with deep pockets and lots of lawyers from continuing to extort money from smaller companies and, at the same time, stifle innovation.