(wrote the intro a few days ago. Opinion was given 2010-6-28)
Today, as I had hoped for months now, we have a decision in Bilski, which is about more than patents on methods of doing business. It is about software patents, the patent trolls’ delight. M$ has been using them to extort and inhibit GNU/Linux globally so it is about time they were laid to rest. I wonder whether or not the suckers that paid M$ to leave them alone will ask for their money back. I wonder how big a hit the loss of $billions of value in their software patents portfolio will have on share-price.
The decision is to affirm the lower court’s denial of Bilski’s patent. Unfortunately they also state that the “machine or transformation test” is not sufficient to deny a patent. Business methods are not categorically excluded, either…
Stevens concurred but emphasized that stating that the “machine or transformation test” was not the sole test did not suggest the Court ruled that many patentable ideas could not be identified or ruled out by it. He also stated the reasoning should have been that business methods are not patentable:“These clues all point toward the same conclusion: that petitioners’ claim is not a process, within the meaning of S101, because methods of doing business are not, in themselves, covered by the statute.”
Breyer wrote:“In sum, it is my view, that in reemphasizing that the “machine of transformation test” is not necessarily the sole test of patentability, the Court intends neither to de-emphasize the test’s usefulness nor to suggest that many patentable processes lie beyond its reach.” Scalia agreed with him.
So the Court is ambiguous on software-patents but did not shoot down the test. If a software-patent application is for some algorithm represented by code it is abstract and not patentable IMHO.
M$’s stock was down 1% on early trading but rebounded to down 0.5% on the ruling. I think we have seen the end of M$’s threats now. No one should take them seriously as the Court certainly did not.
You can read the ruling here.
Update: Other views of this opinion are all over the map. Experts keep score on the parts of the opinion:
9 justices agreed that Bilski fails to get a patent.
4 justices opine that patents may be broadened in the “information age”
5 justices opine that the “machine or transformation” test is too narrow and business methods can be patentable
My reading is that software is an abstraction and thus is not patentable. 5 or more justices not agreeing supports this. I think a lot of software patents will have to be chucked. M$ ended down 0.91% on the day, that’s down $18 billion. Whether Bilski is the reason is debatable. Down is still down. Why is a monopoly down? Because the table has been tilted against them by their own actions or changed circumstances. Perhaps it is a little of both.