Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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Federal Court on Bilski

Big victory today at the CAFC! (Finally)

Via Slashdot, the Court of Appeals for the Federal Circuit, which reviews all patent disputes in the U.S. now, has ruled in the In Re Bilski case that the U.S. Patent Office's rule that patents must meet the "machine or transformation" test -- i.e. ideas must be embodied in an actual product (a machine) or engender an actual physical transformation (as, for example a chemical or biological process) -- in order to receive a patent.

In practice, what this means is that business method and software patents are probably done for.


You beat me to the post. I was just reading the decision. This seems like good news.

I think you overestimate the effect of Bilski. The CAFC said that software and business method patents can still be issued, but only if they meet tests set forward by the U.S. Supreme Court.

What this will mean is that software patents on anything that can also be done purely by the human brain (any sort of analysis or decision-making program whose only output is an answer) are most likely worthless, and future patents on this subject matter will likely be rejected on paragraph 101 (patentable subject matter).

This decision will likely be tested again over the next couple of years, but the CAFC's analysis was very careful and pointed back to the Supreme Court numerous times. The meaning of the decision is clear. If the Supreme Court does not take up the case (assuming Bilski appeals), then they are essentially affirming the analysis, and Bilski will provide a powerful tool and limit on the scope of patentable subject matter. If the Supreme Court takes up the case, then they wish to modify their previous analysis. Given that there has been a clear swing toward weaker IP protection for some years now, my guess is that if Bilski appeals, the Supreme Court will either let the analysis stand, or they will take up the case and further enforce the limits established by their previous decisions and affirmed by Bilski.

Patents on abstract ideas, such as business plans, should be prohibited. Patents on software, should be prohibited. Patents on Genes, DNA etc., should be prohibited.

Over at The Technology Liberation Front, I wrote:" 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."

Patents on abstract ideas, such as business plans, should be prohibited.

I am unaware of any patents on "business plans." Do you mean "business methods"?

Patents on software, should be prohibited.

If that software is not tied to doing something with a specific set of hardware, i.e, if the software is a program that can be loaded on any general purpose computer and function equally well, I agree. Especially if the only purpose of the software is do to digitally when a human brain can do in the analog. See also Leapfrog v. Fisher-Price.

Patents on Genes, DNA etc., should be prohibited.

There are no patents on genes, naturally occurring DNA, etc. Patents on naturally occurring substances and living substances are prohibited under the patent statutes.

The words "Patents on naturally occurring substances and living substances are prohibited under the patent statute" don't mean what they seem to mean. The human genome project has a page that explains the matter in considerably greater detail. For example, there are patents on genes: "Since Diamond v. Chakrabarty, patents have been issued on whole genes whose function is known. More recently, inventors began to seek patents on sequences of DNA that were less than a whole gene. The Patent Office has developed guidelines on how to deal with these fragments since they often do not have a known function."

I was in a bit of a hurry, and was seeking to prompt Steve R. to be a little more precise rather than giving him all the questions and answers (though I too was a little imprecise).

Yes, you are correct that all is not as it seems with gene patents. I am unaware of any patents that are on naturally occurring genes alone, which I believe is against the statute. Now, when a naturally occurring gene is couple with other features (diagnosing, treating, etc.), then a patent may be issued under current rules.

I am unsure of how Diamond v. Chakrabarty comes into play with gene patents, because the teaching from Diamond was that engineered genetic material (genetic material that does not occur naturally) is patentable. I was a bit imprecise in my original comment because I neglected to append "naturally occurring" to gene, though my second sentence made that clear.

I tend to be somewhat "liberal" with my language at times (plans versus methods). In many respects we are dealing with slippery slope language where we don't really know how the words are being defined. Nevertheless, I way too many undeserving patents are being issued.

As a side issue, some of these biological patents may have been funded by our tax dollars. To me the results of research that was paid for through public funds should be in the public domain. Unfortunately the Bayh-Dole Act allows this stuff to be patented. TechDirt Article How Patents Have Harmed University Research

Part of what got me frothing on this was a patent for a medical diagnostic test. University of Colorado Health Sciences Center Faculty Patent Upheld by Federal Circuit Court I would agree that the researchers who discovered could market a patented device to detect patients with vitamin B12 or folate deficiency by assaying homocysteine levels. However, others should be allowed to develop their own methods of using that medical test. (The articles I have read don't detail whether LabCorp simply "lifted" the test or if they actually developed their own test (reverse engineered))

Thank-you for your comments. In the meantime, I will get back to working on my patent for a faster-than-light propulsion device.

Steve R.:

I agree with you whole-heartedly regarding patents paid for by public dollars. It seems to me that those patents should either be dedicated to the public, or licensed to anyone by the government (recoup our tax dollar investment). To limit practice to one company is nonsensical.

As for the patents to Metabolite, I am struggling for several reasons. One, the "invention" is a discovery, and the treatment is what would have been prescribed had the discovery been found through another technique. So, if you suspect a vitamin B12 or folate deficiency, you can treat for it, but if you test for elevated levels of homocysteine, then you infringe the patent. Sigh, I think there are a lot of benefits to patents, but this patent seems ridiculous. Indeed, why it was not rejected under paragraph 101 as non-statutory matter is beyond me. I wonder if In re Bilski might affect this one?

I look forward to your faster-than-light drive patent. Hurry up. I want to go on one of the ships after the collapsing containment field problem, which leads to a localized black hole and complete immolation of all nearby matter, is solved.

"It seems to me that those patents should either be dedicated to the public"


"or licensed to anyone by the government (recoup our tax dollar investment). To limit practice to one company is nonsensical."

No. That's double-dipping: we pay once in taxes, then pay again in licensing fees.

"Sigh, I think there are a lot of benefits to patents"


Go to jail, you bad bad man.

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