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Supreme Court Makes Two Good Decisions On Patent Law
Techdirt ^ | April 30 2007 | Mike

Posted on 04/30/2007 12:17:30 PM PDT by antiRepublicrat

This morning the Supreme Court came down with two decisions about patent law that both take small, but extremely important, steps towards reigning in some of the worst abuses of the patent system. In both cases, it's disagreed with the position taken by the Appeals Court for the Federal Circuit (CAFC). This isn't a huge surprise, as many observers figured that the Supreme Court's recent interest in all sorts of patent cases meant that the justices weren't at all happy with the way CAFC was moving. This is a good thing, as the past twenty-five years or so of CAFC is a big part of why the patent system has veered out of control. For those who don't get into the details of these things, effectively CAFC was taken over by patent attorneys who pretty much felt that since patents were "good," more patents were "better." They continually expanded what could be patented and how much power patent holders had. This, in turn, meant that many more people and companies started filing for many more patents. While the Patent Office complains that it can't handle the load of patents, rather than hiring more examiners, the solution may simply be in reigning in the overwhelming power handed to patent holders by CAFC. Today the Supreme Court took another step in that direction.

(Excerpt) Read more at techdirt.com ...


TOPICS: Business/Economy; Government
KEYWORDS: broken; obvious; patents
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Good news! After years we finally get a reversal of the trend that allowed anything to be patented, no matter how obvious. Good for business, good for people, and bad for patent trolls.
1 posted on 04/30/2007 12:17:32 PM PDT by antiRepublicrat
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To: antiRepublicrat

I’ll be interested in reading that tonight. Thanks for the ping


2 posted on 04/30/2007 12:20:10 PM PDT by zeugma (MS Vista has detected your mouse has moved, Cancel or Allow?)
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To: antiRepublicrat

This sounds patently obvious...........


3 posted on 04/30/2007 12:21:01 PM PDT by Red Badger (My gerund got caught in my diphthong, and now I have a dangling participle...............)
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To: antiRepublicrat
Software should never have been covered by patents in the first place.

Software would be covered just fine by copyright law.

4 posted on 04/30/2007 12:21:57 PM PDT by TChris (The Democrat Party: A sewer into which is emptied treason, inhumanity and barbarism - O. Morton)
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To: zeugma
Links to the decisions:

Microsoft Corp. v. AT&T Corp.

KSR Int'l Co. v. Teleflex Inc.

5 posted on 04/30/2007 12:28:41 PM PDT by antiRepublicrat
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To: antiRepublicrat

The liberals and conservatives both seem to agree about this - the Federal Circuit has gotten out of had. They rank right with the Ninth Circus it appears.


6 posted on 04/30/2007 12:29:26 PM PDT by colorado tanker
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To: TChris
(A) Absolutely nothing in the patent laws prohibits patenting software.
(B) If I invent a new way to do something in software or that requires software, copyright only prevents you from copying my software. You could still develop your own software to implement it, which means I get a lot less protection.
7 posted on 04/30/2007 12:30:23 PM PDT by TexasAg1996
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To: antiRepublicrat

The system is certainly broken the way it is. But I’m a little hesitant in celebrating the implications of this ruling just yet.


8 posted on 04/30/2007 12:32:02 PM PDT by AndyTheBear (Disastrous social experimentation is the opiate of elitist snobs.)
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To: antiRepublicrat
Good news! After years we finally get a reversal of the trend that allowed anything to be patented, no matter how obvious. Good for business, good for people, and bad for patent trolls.

Forgive me if I chastise your ignorance butt....

First of all the issue of obviousness has nothing to do with patent trolls and litigation shopping.

Second of all, the USPTO doesn't let through anything and everything.

Third, what is "obvious" to so many people way too often seems to come about only after the patentee did it first.

Fourth, if all the USPTO had to do was to show the various previous elements in any number of references without a motivation to combine, then there would be no new patents (or very very few) and industry R&D would be a thing of the past.

Fifth, after completing my first pass of the KSR case, the SCOTUS changed very little.

That being said, various examiners at the USPTO will point to the KSR case to claim it stands for things it doesn't. There are some great examiners and some crappy ones, and the crappy ones will make everyone's job harder for months.

9 posted on 04/30/2007 12:34:25 PM PDT by Smedley
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To: TexasAg1996

your explaination is exactly right. My lawyer wrote a software propriety patent and it took 4 yrs til he received his patent.

As for me my patent or pending patent friday was upgraded to MONOPLOY status and holds a 20 yr protection....WOHOOO


10 posted on 04/30/2007 12:34:30 PM PDT by advertising guy (If computer skills named us, I'd be back-space delete.)
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To: All
This is an interesting opinion. You'll find it, and the concurrance and dissent linked below. I've posted the syllabus.

 

MICROSOFT CORP. v. AT&T CORP. (No. 05-1056)
414 F. 3d 1366, reversed.
Syllabus

Opinion
[Ginsburg]
Concurrence
[Alito]
Dissent
[Stevens]
HTML version
PDF version
HTML version
PDF version
HTML version
PDF version
HTML version
PDF version

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

SUPREME COURT OF THE UNITED STATES

MICROSOFT CORP. v. AT&T CORP.

certiorari to the united states court of appeals for the federal circuit


No. 05–1056. Argued February 21, 2007—Decided April 30, 2007

It is the general rule under United States patent law that no infringement occurs when a patented product is made and sold in another country. There is an exception. Section 271(f) of the Patent Act, adopted in 1984, provides that infringement does occur when one “suppl[ies] … from the United States,” for “combination” abroad, a patented invention’s “components.” 35 U. S. C. §271(f)(1). This case concerns the applicability of §271(f) to computer software first sent from the United States to a foreign manufacturer on a master disk, or by electronic transmission, then copied by the foreign recipient for installation on computers made and sold abroad.

        AT&T holds a patent on a computer used to digitally encode and compress recorded speech. Microsoft’s Windows operating system has the potential to infringe that patent because Windows incorporates software code that, when installed, enables a computer to process speech in the manner claimed by the patent. Microsoft sells Windows to foreign manufacturers who install the software onto the computers they sell. Microsoft sends each manufacturer a master version of Windows, either on a disk or via encrypted electronic transmission, which the manufacturer uses to generate copies. Those copies, not the master version sent by Microsoft, are installed on the foreign manufacturer’s computers. The foreign-made computers are then sold to users abroad.

        AT&T filed an infringement suit charging Microsoft with liability for the foreign installations of Windows. By sending Windows to foreign manufacturers, AT&T contended, Microsoft “supplie[d] … from the United States,” for “combination” abroad, “components” of AT&T’s patented speech-processing computer, and, accordingly, was liable under §271(f). Microsoft responded that unincorporated software, because it is intangible information, cannot be typed a “component” of an invention under §271(f). Microsoft also urged that the foreign-generated copies of Windows actually installed abroad were not “supplie[d] … from the United States.” Rejecting these responses, the District Court held Microsoft liable under §271(f), and a divided Federal Circuit panel affirmed.

Held: Because Microsoft does not export from the United States the copies of Windows installed on the foreign-made computers in question, Microsoft does not “suppl[y] … from the United States” “components” of those computers, and therefore is not liable under §271(f) as currently written. Pp. 7–19.

    (a) A copy of Windows, not Windows in the abstract, qualifies as a “component” under §271(f). Section 271(f) attaches liability to the supply abroad of the “components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components.” §271(f)(1) (emphasis added). The provision thus applies only to “such components” as are combined to form the “patented invention” at issue—here, AT&T’s speech-processing computer. Until expressed as a computer-readable “copy,” e.g., on a CD-ROM, Windows—indeed any software detached from an activating medium—remains uncombinable. It cannot be inserted into a CD-ROM drive or downloaded from the Internet; it cannot be installed or executed on a computer. Abstract software code is an idea without physical embodiment, and as such, it does not match §271(f)’s categorization: “components” amenable to “combination.” Windows abstracted from a tangible copy no doubt is information—a detailed set of instructions—and thus might be compared to a blueprint (or anything else containing design information). A blueprint may contain precise instructions for the construction and combination of the components of a patented device, but it is not itself a combinable component.

    The fact that it is easy to encode software’s instructions onto a computer-readable medium does not counsel a different answer. The copy-producing step is what renders software a usable, combinable part of a computer; easy or not, the extra step is essential. Moreover, many tools may be used easily and inexpensively to generate the parts of a device. Those tools are not, however, “components” of the devices in which the parts are incorporated, at least not under any ordinary understanding of the term “component.” Congress might have included within §271(f)’s compass, for example, not only a patented invention’s combinable “components,” but also “information, instructions, or tools from which those components readily may be generated.” It did not. Pp. 9–12.

    (b) Microsoft did not “suppl[y] … from the United States” the foreign-made copies of Windows installed on the computers here involved. Under a conventional reading of §271(f)’s text, those copies were “supplie[d]” from outside the United States. The Federal Circuit majority concluded, however, that for software components, the act of copying is subsumed in the act of supplying. A master sent abroad, the majority observed, differs not at all from exact copies, generated easily, inexpensively, and swiftly from the master. Hence, sending a single copy of software abroad with the intent that it be replicated invokes §271(f) liability for the foreign-made copies. Judge Rader, dissenting, noted that “supplying” is ordinarily understood to mean an activity separate and distinct from any subsequent “copying,” “replicating,” or “reproducing”—in effect, manufacturing. He further observed that the only true difference between software components and physical components of other patented inventions is that copies of software are easier to make and transport. But nothing in §271(f)’s text, Judge Rader maintained, renders ease of copying a relevant, no less decisive, factor in triggering liability for infringement. The Court agrees. Under §271(f)’s text, the very components supplied from the United States, and not foreign-made copies thereof, trigger liability when combined abroad to form the patented invention at issue. While copying software abroad is indeed easy and inexpensive, the same can be said of other items, such as keys copied from a master. Section 271(f) contains no instruction to gauge when duplication is easy and cheap enough to deem a copy in fact made abroad nevertheless “supplie[d] … from the United States.” The absence of anything addressing copying in the statutory text weighs against a judicial determination that replication abroad of a master dispatched from the United States “supplies” the foreign-made copies from this country. Pp. 12–14.

    (c) Any doubt that Microsoft’s conduct falls outside §271(f)’s compass would be resolved by the presumption against extraterritoriality. Foreign conduct is generally the domain of foreign law, and in the patent area, that law may embody different policy judgments about the relative rights of inventors, competitors, and the public. Applied here, the presumption tugs strongly against construing §271(f) to encompass as a “component” not only a physical copy of software, but also software’s intangible code, and to render “supplie[d] … from the United States” not only exported copies of software, but also duplicates made abroad. Foreign law alone, not United States law, currently governs the manufacture and sale of components of patented inventions in foreign countries. If AT&T desires to prevent copying abroad, its remedy lies in obtaining and enforcing foreign patents. Pp. 14–16.

    (d) While reading §271(f) to exclude from coverage foreign-made copies of software may create a “loophole” in favor of software makers, the Court is not persuaded that dynamic judicial interpretation of §271(f) is in order; the “loophole” is properly left for Congress to consider, and to close if it finds such action warranted. Section 271(f) was a direct response to a gap in U. S. patent law revealed by Deepsouth Packing Co. v. Laitram Corp., 406 U. S. 518 ,where the items exported were kits containing all the physical, readily assemblable parts of a machine (not an intangible set of instructions), and those parts themselves (not foreign-made copies of them) would be combined abroad by foreign buyers. Having attended to that gap, Congress did not address other arguable gaps, such as the loophole AT&T describes. Given the expanded extraterritorial thrust AT&T’s reading of §271(f) entails, the patent-protective determination AT&T seeks must be left to Congress.Cf. Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417 . Congress is doubtless aware of the ease with which electronic media such as software can be copied, and has not left the matter untouched. See the Digital Millennium Copyright Act, 17 U. S. C. §1201 et seq. If patent law is to be adjusted better to account for the realities of software distribution, the alteration should be made after focused legislative consideration, not by the Judiciary forecasting Congress’ likely disposition. Pp. 17–19.

414 F. 3d 1366, reversed.

Ginsburg, J., delivered the opinion of the Court, except as to footnote 14. Scalia, Kennedy, and Souter, JJ., joined that opinion in full. Alito, J., filed an opinion concurring as to all but footnote 14, in which Thomas and Breyer, JJ., joined. Stevens, J., filed a dissenting opinion. Roberts, C. J., took no part in the consideration or decision of the case.

11 posted on 04/30/2007 12:34:59 PM PDT by zeugma (MS Vista has detected your mouse has moved, Cancel or Allow?)
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To: Smedley

but those crappy ones get reviews daily and trends tell on them.In my case many thought a patent could constitute a monoploy and therefore was refused only to be reviewed and overturned which was my case.


12 posted on 04/30/2007 12:37:10 PM PDT by advertising guy (If computer skills named us, I'd be back-space delete.)
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To: antiRepublicrat
While the Patent Office complains that it can't handle the load of patents, rather than hiring more examiners, the solution may simply be in reigning in the overwhelming power handed to patent holders by CAFC.

This is ignorant tripe.

These issues aren't even related.

The increased number of patents have to do with more innovation and alignment of different countries' patent rules, as well as a growing sophistication of intellectual property by small and medium-sized businesses.

The examination fees paid by inventors finances the USPTO, not the taxpayers, and if more people want to file patent applications, the solution is to hire more examiners and give the examiners better search tools.

13 posted on 04/30/2007 12:40:32 PM PDT by Smedley
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To: antiRepublicrat

You could own a patent to the best product in the world, but unless you have the money to defend the patent in court, you are screwed. All a patent effectively gives a person is the right to defend their claim in court. If the Chinese decide to infringe on your patent ( whether it is a US or World patent ) , it is you versus the Chinese government. Long years of litigation and expense for lawyers.


14 posted on 04/30/2007 12:43:09 PM PDT by TheCipher
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To: colorado tanker
The liberals and conservatives both seem to agree about this - the Federal Circuit has gotten out of had. They rank right with the Ninth Circus it appears.

I'm both a conservative and a patent attorney, and while I don't always agree with the Fed Circuit, I would refute that they are comparable to the 9th.

15 posted on 04/30/2007 12:43:12 PM PDT by Smedley
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To: TexasAg1996
"If I invent a new way to do something in software"

The problem is with software patents as granted by the USPO and up till now upheld by the courts.

If you walked into the USPO and said "I'd like to patent the concept of attaching two pieces of paper together" they would laugh you out of the room, whereas a significantly new design of stapler would at least get a respectful hearing.

The software patents which are troublesome are those which have been granted to "protect" obvious concepts rather than specific methodologies.

Google US5301348 (IBM patents the progress bar) for an example.

16 posted on 04/30/2007 12:44:02 PM PDT by Lolipop Jones (Republican Liberty Caucus, Club for Growth member.)
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To: TexasAg1996
(A) Absolutely nothing in the patent laws prohibits patenting software.

I never claimed that it did. That doesn't change the fact that it was a Very Bad Idea. Legislation could have been, and should have been, passed to prohibit patenting software.

(B) If I invent a new way to do something in software or that requires software, copyright only prevents you from copying my software. You could still develop your own software to implement it, which means I get a lot less protection.

If you invent a new way of playing G-flat Minor 7th chord on a twelve-string guitar, that idea is not patentable. This fact has not stunted the development of novel music styles and techniques.

The whole point of patents and copyrights is to give the creator/innovator a reward for his efforts. That protection and reward would not be lost if software were not patentable. It would allow the basic building-blocks of software, algorithms, to be used in different ways to create ever more useful, powerful programs. As it is, patents are used to prevent and eliminate competition rather than to reward innovation.

When the question was first addressed, the entire software industry opposed software patents! That should tell you something. They all realized what a huge drain on resources and waste of time and money it would be to have to pursue, obtain and defend patents.

Once it was clear that they would be part of the game, however, survival demanded that each company jealously guard and obsessively obtain as many patents as possible.

In the end, only the lawyers benefit.

17 posted on 04/30/2007 12:44:11 PM PDT by TChris (The Democrat Party: A sewer into which is emptied treason, inhumanity and barbarism - O. Morton)
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To: Smedley

What I meant by that is that the Federal Circuit’s reversal rate the last couple of years is right up there with the Ninth. In their favor, from what I’ve seen I would say they seem to be getting the message and cleaning up their act, unlike the Ninth.


18 posted on 04/30/2007 12:48:28 PM PDT by colorado tanker
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To: advertising guy
but those crappy ones get reviews daily and trends tell on them.

I'll bet I see more about reviews on undeserving patents than 99.99% of the people here. Undeserving ones get through and amazing innovation gets turned down. Both types of mistakes are made. How many reviews do you hear on the great ideas that don't get through because of crappy examination and the $$$$ it costs.

In my case many thought a patent could constitute a monoploy and therefore was but those crappy ones get reviews daily and trends tell on them.In my case many thought a patent could constitute a monoploy and therefore was refused only to be reviewed and overturned which was my case....

Patents are legal monopolies by definition, granted in return for both the innovation and the public disclosure of that innovation.

...only to be reviewed and overturned which was my case.

Congrats - you won at the Board of Patent Appeals ... or via a pre-appeal panel?

19 posted on 04/30/2007 12:49:44 PM PDT by Smedley
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To: TexasAg1996

“(A) Absolutely nothing in the patent laws prohibits patenting software”

I always understood this to be true which is why most software is not patented it is copyrighted.


20 posted on 04/30/2007 12:51:00 PM PDT by edcoil (Reality doesn't say much - doesn't need too)
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