Microsoft and Amazon are among the technology companies taking a stand on a landmark patent case to be heard by the U.S. Supreme Court today. A decision from the court in Alice Corporation v. CLS Bank has the potential to shake up the way software patents are handled under the law.
At issue in the case are a trio of patents, held by Alice Corp., that the company claims lay out a means for performing an escrow transaction using a computer system. CLS Bank, which originally asked for a declaratory judgment against Alice, claiming that the company’s patents are not valid, argued in earlier courts that Alice’s patents amounted to explaining the process of escrow, and then adding a nebulous computer system.
In a brief filed with the court, Microsoft (alongside Adobe and Hewlett Packard) supported the most recent ruling in the case by all 10 judges from the United States Court of Appeals for the Federal Circuit. They argue that “saying, ‘perform an otherwise unpatentable idea on a general-purpose computer’ does not make the idea patentable.” But Microsoft and the other companies signed onto the brief don’t want the court to rule more broadly than to say that Alice’s patent is invalid.
“Precisely because this case does not involve a true computer-implemented invention (but rather a business method posing as one), the Court has no reason to address—or to risk the potential uncertainty and unforeseen impacts that can be created by addressing—the patentability of computer-implemented inventions and software generally,” the companies said in the brief.
Of course, those companies stand to gain quite a bit from their software patents as the current system stands. Licensing patents that Android allegedly infringes to companies that make devices with Google’s operating system is a billion-dollar business for the Redmond-based software giant, and the court creating a new test to determine the eligibility of software patents could have a negative impact on the business of getting other companies to license patents.
A brief filed by Amazon, Google, LinkedIn, Dell, and other major tech companies took a different tack. While they also argued for the continued existence of software patents, they said that the Supreme Court should do something more concrete about the “plague” of overbroad, abstract software patents that tech companies are often accused of infringing.
“Such patents are litigated eight times as often as other patents, and have accounted for about 46 percent of all patent lawsuits and 64 percent of the defendants in those suits between 2007 and 2011,” the companies wrote.
To curb patent litigation, Amazon and others want to see the court put new procedural rules into place that would require the validity of a patent to be decided as a question of law rather than rely on the defendants in a patent suit proving that the patent is invalid. That rule change would make it easier for companies defending a patent lawsuit to avoid drawn-out and costly litigation over invalid patents.
Of course, there are some in the tech world who think that software patents should be abolished completely. While neither Microsoft or Amazon argued for that (and Microsoft offered its own argument as to why software patents are the successors to mechanical patents in its brief) there’s a possibility that the court could decide that software isn’t eligible for patent protection.
However the court rules, its decision will send ripples through the tech industry as companies move to adjust to a new framework for software patents.
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The two companies’ briefs are embedded below. (Via the American Bar Association’s Supreme Court Preview)
