Late-comers guide: What is Bilski anyway?

Everyone expects the US Supreme Court to publish their decision on the "Bilski" case today (June 28^th 2010). The court has to decide on the validity of a patent on a business method, but that’s not the main issue. Everyone expects that patent to be rejected, but the main issue is that to reject a patent the court must give a general test and explain why this patent fails that test. We want to know if they’ll propose a test which will also be failed by some or all software patents.

A lower court (the CAFC) rejected this patent in 2008 and proposed the "particular machine or transformation" test. Some software patents fail that test, so we’re moderately happy with it. However, it hasn’t been subjected to harsh scrutiny. The Supreme Court‘s decision to review the case put an early end to the detailed scrutiny of that test.

At the one-hour hearing of the case in November 2009, it was clear that the judges saw little or no credibility in the patent.

Where did software patents come from?

The legal basis of this problem can be found in 1982 with the setting up of the US Court of Appeals for the Federal Circuit (CAFC). This patents-focussed court, largely filled with people connected to the patents industry, slowly wore down the limits on patenting software ideas. Their rulings were based on a selective reading of the Supreme Court’s Diamond v. Diehr case from 1981.

The problem surfaced slowly. In 1990, when Microsoft’s annual revenue was almost US$1.2 billion, they only had five granted patents. In 1991, Bill Gates wrote:

“If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today […] The solution to this is patent exchanges with large companies and patenting as much as we can. […] A recent paper from the League for Programming Freedom (available from the Legal department) explains some problems with the way patents are applied to software.”

(from Gates’ 1991 memo)

Early campaigns against software patents

Richard Stallman was a year ahead of Gates. The League for Programming Freedom (LPF) which Gates referred to was founded by Stallman and others in 1989 and adopted a position against software patents in 1990.

LPF participated in the USPTO’s 1994 Public Hearings on Software Patents, and filed amicus briefs in key court cases.

The GNU Project also took up the cause and published a new version (v2) of their key licence, the GNU General Public License in 1991 with a clause to block the most lucrative form of patent attack.

From the late 90s until around 2007, the spotlight was on campaigns in other parts of the world.

In 2007, FSF helped launch the End Software Patents (ESP) campaign, which publishes news.swpat.org and the en.swpat.org wiki. ESP has produced an economic study showing that software developers lose US$11.26 billion per year to patent holders. ESP has also submitted amicus briefs for the 2008 CAFC case and the 2009 Supreme Court case. While waiting for the court’s decision, FSF financed the independent film Patent Absurdity. In anticipation of the post-Bilski debate, this film was recently mailed to 200 key patent policy setters.