The answer to the question above may become a lot clearer next year, according to an article in the Wall Street Journal (Dec. 7, 2013). The high court has agreed to hear an appeal of a case that “has tied the lower courts in knots,” according to the Journal article.
Basically, there has long been a lack of clarity with respect to whether – and when – computer code should get patent protection.
On one side of this digital divide are “new” tech companies like Google, Facebook and Intuit. They believe too many patents have been issued lately, and would like to see courts “apply a more exacting standard when reviewing them.” These firms believe that the pace of technology and innovation are improved when patents are harder to secure.
Opposing them are “old” tech firms like IBM that have spent decades amassing troves of patents. As the Journal sums it up: “Smaller players worry tighter standards on software patents could hurt innovation by making it harder for them to get legal protection for their ideas, while the larger ones fear new standards will trigger attacks on their portfolios.”
According to at least one patent attorney, Matthew Moore of Latham & Watkins LLP in Washington D.C., “this is the biggest patent case we’ve seen in years for the technology sector, and probably the biggest we’ll see for the next decade.”
The suit being heard involves two international banks over a computer program that helps foreign-exchange buyers and sellers settle their trades. One side says that the way it’s done now – with patents that describe a process using an intermediary to settle trades – has been around a long time and doesn’t deserve protection. The other says that their patents did a lot more than just bring an old idea into the computer age, and the software serves as “an electronic intermediary in a particular way”. Interested parties are divided then on how much scrutiny a court should apply to software contracts.
Whichever way this goes, the lack of clear rules in the software industry begs for certainty. But it won’t be easy, according to legal experts. As patent lawyer Ed Reines sums up: “You basically have a ‘you-know-an-innovation-when-you-see-it’ standard. Articulating a test that divides what’s patentable and what isn’t is extremely difficult.”
No date for the high court hearing has been announced, but expect to more about this in the news next year.