US appeals court asks whether to limit software patents

Should an abstract idea written into software and run on a computer be patentable? That's one question a U.S. appeals court will consider Friday when it hears arguments in a case with broad implications for software patents for companies as diverse as Google and Red Hat.

The U.S. Court of Appeals for the Federal Circuit is unlikely to invalidate all software patents in the CLS Bank v. Alice Corp. case, but it could force tech companies to narrow their claims when applying for software patents, some patent experts said.

The case, which has generated briefs from Google, Facebook, Newegg and software trade group BSA, could "set the stage" for limiting what kinds of software patents can be issued, said Julie Samuels, a lawyer with the Electronic Frontier Foundation.

"There's a really big problem with software patents that doesn't tend to exist with most other patents," she said. "Patentees tend to claim a problem ... and then they get a patent on any way of fixing it, as opposed to claiming a specific method, a specific invention accomplishing their goal."

If software patent claims were limited to a specific invention, "we'd all be a lot better off," added Samuels, who wrote a brief in the case for the EFF and Public Knowledge. "If software patents were more narrow, then they wouldn't be such a powerful tool for the trolls."

In the case, defendant CLS Bank argued that Alice's four software patents covering a computerized trading platform for exchanging obligations was too abstract to be patentable. A district court agreed, but the appeals court reversed the decision.

Still, the appeals court scheduled Friday's hearing to examine whether an abstract idea combined with a computer is patentable, and whether some software patent claims involving methods, systems or storage should be grounds for granting a patent.

Google, Facebook, Red Hat and some other tech companies argued that the Alice patents should be invalid in a joint brief. BSA argued the Alice patents should be invalid, but more broadly defended software patents.

The case could determine the line between a "true invention that uses a computer" and a process that can happen on a computer or by other means, said Leigh Martinson, a partner in the McDermott Will & Emery law firm. The case could chip away at the longtime legal assumption that software, because it's loaded on a machine, is patentable, he said.

The case could give tech companies a clearer picture of what kinds of software patents are allowed, Samuels said. The appeals court has issued a "bunch of inconsistent opinions" on software patents, and the U.S. Supreme Court didn't provide specific guidance in its 2010 Bilski v. Kappos ruling, she said.

"It's really hard to know what the law is," she added.

The EFF has been a leading critic of software patents, but Samuels said she doesn't see the Federal Circuit abolishing them. "In a perfect world, we'd probably not have these patents at all," she said. "But I don't have much hope that's where the Federal Circuit is going to come down."

Martinson said he doesn't believe the court will invalidate software patents. "Think about the policy implications of that," he said. "Look at all the companies that write software and protect their ideas. That's sort of what [U.S. businesses] do now on some level."

If the court invalidates software patents, "I'd have to find a new gig," he added.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.