Goodbye to Most Business Method & Software Patents?

by on October 30, 2008 · 11 comments

The Federal Circuit significantly limited the patentability of software and business methods today.  Mike Masnick at TechDirt summarizes the holding of the case as follows:

the court has said that there’s a two-pronged test to determine whether a software of business method process patent is valid: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. In other words, pure software or business method patents that are neither tied to a specific machine nor change something into a different state are not patentable.

I’m sure several of my TLF colleagues will have a great deal to say about this.   Tim Lee has already written about this on Ars Technica:

The Bilski decision, then, is a clear signal that the pendulum has begun to swing back toward tighter limits on software and business patents. However, it remains to be seen how far the court will go in this direction. Bilski was a relatively easy case. The applicant made little effort to hide the fact that he was seeking to patent a mental process, something the Supreme Court has clearly said is not allowed. Therefore, the Federal Circuit’s rejection of this patent doesn’t tell us how it will rule when confronted with software or business method patents that are tied more directly to a physical machine or a transformation of matter. And indeed, the Federal Circuit reiterated that some software and business method patents are valid, so we are unlikely to return to the near-prohibition on such patents that prevailed until the early 1980s.


  • Richard Bennett

    I doubt this ruling is nearly as significant as the populist press imagines it to be.

  • Bob

    OK, copyrights do not seem to be affected by this – what does patent protection provided that copyright protection does not?


  • Steve R.

    Hopefully, the pendulum is swinging back to rationality. An inconvenient truth that has not received the public spotlight that it deserves: is that those who advocate so-called intellectual property have been aggrandizing their so-called property right. at the expense of the public domain. The public perception, unfortunately, has been that the advocates of so-called intellectual property have been protecting a private property right. This property right does not really exist.

    Pantently-O writes “In Dissent, Judge Mayer thought the decision did not go far enough: “Affording patent protection to business methods lacks constitutional and statutory support, serves to hinder rather than promote innovation and usurps that which rightfully belongs in the public domain.” Citing work by Professors Dreyfuss and Pollack, Mayer argues that business method patents have the overall effect of stifling innovation by restricting competition.”

    TechDirt had an article “CAFC Judge Regrets Decisions That Resulted In Software Patents” In terms of unintended consequences Greenspan referring to the financial crisis is quoted by the NY Times as saying “humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.” Unlimited patentability would have unintended self-destructive consequence of stifling free enterprise.

    TechDirt also writes: “Nobel Prize Winning Physicist Explains How Intellectual Property Damages Innovation” While no one likes to deprive anyone of an income, there is a point where unfettered greed is destructive to society. Patents and copyright were never meant to guarantee anyone an unlimited income. They are meant to foster innovation by providing a limited benefit to the creator and to provide society with a benefit too. We need to return to that concept.

  • Don Marti

    Patents give the holder the right to attack independent innovation. If I write a program that does the same thing as an earlier copyrighted program, without copying it, the copyright holder doesn't have an infringement case against me. If I implement a patented technique, even if I had never heard of the patent, I can get shut down for infringement.

  • JAmes

    I had a patent pending in 19 countries – but it failed after 5 years

  • JAmes

    I had a patent pending in 19 countries – but it failed after 5 years

  • JAmes

    I had a patent pending in 19 countries – but it failed after 5 years

  • Pingback: business method patents -

  • Pingback: barclays premier league()

  • Pingback: Dentist Camberley()

  • Pingback: payday loans yucaipa ca()

Previous post:

Next post: