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Supreme Court showdown for Microsoft and patent law

Maggie Shiels | 09:06 UK time, Monday, 18 April 2011

US patent law will be put in the dock later today (18 April) when the highest court in the land considers a case brought by the world's biggest software company, Microsoft.

But at stake is more than just the $290m (£180m) judgement that a small Canadian firm, i4i, secured against Microsoft for patent infringement.

Supreme Court, Washington DC

 

Legal experts have said that the outcome of the US Supreme Court hearing will decide how patent laws protect exclusive technology and impact innovation.

Critics have said what concerns them most is that a win for Microsoft would significantly weaken important patent protections that allow inventors to profit from their creations.

Back in 2007, i4i took the world's biggest software company to court because its popular Word programme, used by about 500 million people, infringed a patent it was granted in 1998. The alleged infringement was related to document editing.

As well as the $290m judgement, i4i also obtained an injunction that barred sales of certain versions of Word that infringed the patent.

Microsoft's claim that the disputed patent was invalid because the i4i invention was based on technology that was already in the marketplace did not persuade the lower courts or a federal appeals court to rule in its favour.

Last August Microsoft turned to the Supreme Court and later today it will consider whether or not to change the way patent law is litigated.

Microsoft has said the federal appeals court that handles patent cases is making it too hard for those accused of infringement to argue that a patent never should have been issued and is invalid.

The Supreme Court is being asked to decide the degree to which juries should be allowed to question whether a patent should have been granted at all.

In an op-ed piece for the New York Times, Doug Lichtman, a professor of law at the University of California, Los Angeles, has written that this is a "critical issue":

"The current approach, under which juries are explicitly discouraged from questioning a patent's validity, all too often means that dubious patents are nevertheless enforced. That inhibits innovation, the very thing that patent law is supposed to encourage," said Mr Lichtman.

According to i4i's chairman Loudon Owen, the case is "a turning point in patent law":

"The patent you're granted has very little meaning if it's not enforceable. Why have a patent if it's useless?" he told the Canadian Press.

"When you get a patent, you put your heart and soul into the invention, you work tremendously hard and you spend a lot of money. But if all of a sudden it becomes apparent to everybody that the patent itself is worthless, why do it?"

Microsoft has argued that bad patents are the worst of all worlds:

"Innovation is one of the great drivers, one of the bright spots of our economy," said Andy Culbert, associate general counsel for Microsoft. "If you have a really bad patent that shouldn't have been issued, what happens? It stops innovation."

Some heavy hitters have lined up on both sides of the argument.

On i4i's side are the likes of General Electric, Johnson & Johnson, 3M, Procter and Gamble, and BP. In a brief to the court the companies said: "Inventors and society would suffer from such a rule, which would simultaneously reduce the rewards of innovation by weakening property rights while increasing the costs of innovation."

On Microsoft's side are Google, Verizon, Apple, Intel, HP and Yahoo who have said the patent system "is tilting out of balance", giving disproportionate power to people who secure patents of questionable legitimacy.

The $290m award won by i4i, which totals just 30 people, stands as the largest ever upheld by an appeals court in a patent case.

The Supreme Court verdict is expected in the summer, bringing to an end a four year long David versus Goliath fight, with serious consequences for patent law and innovation.

Comments

  • Comment number 1.

    For once I have to back Microsoft in this one. The patent law as it stands is ridiculous, Patent's can be granted for amazingly innocuous things to people/companies without any means to actually developing them into real world working goods. This then puts a block on those who do have the resource to capitalise on them from using any such innovation even if arrived at completely independently.

  • Comment number 2.

    Annoyingly, I'm forced to side with Microsoft here. Extremely broad software patents are granted willy-nilly in the US with scant scrutiny. Subsequent developers coming up with a similar application to a patented solution find themselves on the wrong side of a patent suit for the heinous crime of thinking patented thoughts!

    This means that a group of developers and engineers could be locked in a room, develop a product and software independent of any outside influence and still find that the end result breaches a dozen patents.

  • Comment number 3.

    I'm happy to say that I can't see any merit in Microsoft's position. Assuming that a patent has been wrongly granted, surely the right thing to do is to appeal against its having been granted in the first place, not simply to behave as if had never been there?

    With respect to Hackerjack's point, I thought that a large part of the point of patent law was to protect innovation, even (perhaps especially) if it originated from people who didn't have the resources to get it to market as quickly as a behemoth like Microsoft.

  • Comment number 4.

    I once worked with an inventor, who came up with a gadget that, whilst not revolutionary, would have made life a lot easier for certain people (I'm being deliberately vague to protect his idea). Sadly, he couldn't afford to patent it, and without a patent, couldn't secure investment. To date, the gadget languishes in his shed...

    The only people who benefit from the patent system, as it currently stands, are the lawyers. Patents need to be rigourously issued, global, and most importantly CHEAP. In fact, they should be integrated with the copyright laws (also due for overhaul), rather than be separate entities.

  • Comment number 5.

    When thei story was first developing, I went and read the i4i patent. I couldn't believe how incredibly simplistic and unoriginal it was. I myself had been using similar techniques (in a different sphere) that I developed myself, and that I never once even considered patenting (or even patentable).

    It looks like I too have to side with Microsoft on this one - although they themselves seem to have patented huge numbers of similarly incredibly obvious ideas.

  • Comment number 6.

    As for Graphis's idea of integrating patent and copyright - I'm all for it. Then we can have a sensible limit on copyright.

    25 years on the patent for a lifesaving drug that cost £150m to develop, and you lose the first ten years during clinical trials.

    And Jonathan King gets his entire lifetime plus an extra 70 years for "Una Paloma Blanca" that he wrote in the back of a taxi.

  • Comment number 7.

    The patent system, at least as far as software patents in the US are concerned, is entirely broken.

    Rather than promoting innovation they stifle it.

    Why? Because patents are frequently granted on almost any innovation, even where prior art exists, or where the innovative step is trivial.

    That shouldn't happen, but it does - the US patent office is simply overwhelmed by highly technically worded patents, often phrased in such a way as to cover any remotely similar technique. Since they can't check in detail every patent application (doing a detailed search for prior art or having sufficient expertise to know for sure if the innovative step is trivial is beyond their available resources), the default position is to grant the patent (they can only turn it down if there's a good reason to).

    Once a patent is granted it's very hard to have it overturned (and this is the nub of Microsofts action, not to prevent patents but to make it easier to have bad patents nullified).

    The result? Large companies have teams of patent lawyers to patent anything vaguely innovative. A lot of this is purely defensive in nature (if they don't patent it someone else will).

    You even get companies whose sole purpose is to create or buy patents in the hope they can then sue anyone who uses one of their patented techniques.

    It's almost impossible for anyone to create any new software without their being a significant risk of breaching someones patent. Large companies can to a large extent avoid this problem by cross-licensing their patent portfolios.

    Small companies rarely have the time, energy or expertise to patent software, and even when they do it's unlikely be sufficient to allow cross-licensing with the larger players should it later be discovered that some other part of their software breaches someone elses patent.

    So we get masses of litigation and threats of litigation - the lawyers win and innovators lose.

    Microsoft isn't going far enough. Software patents should be banned.

  • Comment number 8.

    Interesting that Apple has joined Microsoft. Apple files silly patents itself. I saw one patent where they "invented" a way to hook up bicycle sensors to an ipod/iphone as if there is no such thing on the market anyway.

    Of course when it is someone else infringing your stuff you want the court to apply strict standards and when you are the infringer you want the court to apply lax standards.

    I think the best policy would be that no foreign company can sue any US company.

  • Comment number 9.

    bobby50th's point would be ok if US companies could not sue companies from other countries. however, the multinationals have companies in many countries so deciding who is "foreign" would be challenging. You might have to do a country demographic of the shareholders of the companies to see the vested interests - it would get very messy.

    Banning patents on software - which amounts to patents on applied maths - would be easier.
    Even this web blog probably breaks more than 15 patents just to display itself on your browser, which shows how farcical it is.

    Software patents should be refused as idea originality can usually be disproved easily - a quick google search finds already existing examples of most "patentable software ideas".

  • Comment number 10.

    I must disagree with Graphis, when he suggested that patents and copyrights should be merged. Next he'll be suggested that trademarks should also be merged. I suggest that he spend some time reading wiki or any other source for a brief introduction into the idea of copyrights, patents, and trademarks, and the differences therein. They should not be combined. That would be just silly.

    However, as a professional code monkey, I do agree that patent law as practiced in the US is beyond ridiculous, software and otherwise. Patents ought to go back to what they were originally - they protected a new, novel, and non-obvious algorithm, machine, or process which can be implemented now and which has commercial benefit. The standard in the past was "If you give the list of mechanical or procedural requirements to a bunch of /experts/ in the field, and if any of the experts can figure out how to do it, you don't get a patent." When Alexander Graham Bell invented the telephone, (almost) no other expert in the world could have made a similar invention given the same mechanical requirements, and that's why it's patentable. That's the standard which needs to be applied.

    Unfortunately, the current standard is whether an overworked patent clerk with basically no training in the patent's area can find prior work in published journals - assuming he even knows where to look.

    AFAIK, in the first administration of the US, only three patents were granted, and to grant a patent required the support and permission of at least two of the the Secretary of State, the Secretary of War, and the Attorney General.

    I am perfectly fine and supportive of software patents which pass this non-obvious test. However, I want the likes of Alonzo Church, Dijkstra, Bjarne Stroustrup, and other eminent people to be the standard of when to grant a patent. Perhaps you could get a patent for the first windows/Mac style GUI, but I find any further patent of a purely GUI concept to be bunk. On the flip side, the Amazon one click patent is a total farce. Any competent college grad could have implemented exactly Amazon one click without previously having heard anything about it, which is why that patent is a total joke and an affront to the very idea of innovation.

  • Comment number 11.

    I wonder if Microsoft, Apple etc could sue the state of Delaware for issuing most of the patents in question - being the US I guess they could.

    The integration of IP types is an interesting idea if you're just referring to a consistent way to approach each rather than making too many of the rules uniform. Copyright being automatically generated by creative work (and not preventing independent creative work) probably needs to be substantially different from something protecting inventions, given that from a final product it'd probably be possible to reverse engineer the original invention in a lot of cases (thus potentially 'independently' creating it) etc.

    I disagree with ConcernedReader's strict preferred definition of patentable material though - for example Graphis' inventor chap might not have broken massive scientific ground when developing whatever it is that's in his shed (i.e. a bunch of experts could do the same if they really thought about it) but to deny him any protection could give him no reason to bring the product to market, prove its worth and then be swamped by a sea of clones.

    Where the US patents seem to go wrong is that a broad idea can be patented without the mechanics of how it's achieved being needed. If the underlying technology already exists and is easily applied (e.g. Apple's recent challenge against Samsung's rounded icons) then there are no new mechanics and minuscule changes in how they're used (e.g. based on how a touch screen interface works for the user, rather than how a touch screen works) then it ought to be hard to do much. I guess that might be at least slightly contrary to my argument about the shed invention - maybe one is process/interface/cosmetic design rather than technical work on a product. If the shed invention were something like sticking a light on a lawnmower for nighttime mowing, there'd be not much reason to allow the chap with the shed to prevent other manufacturers putting lights on their lawnmowers given that it's blinking obvious how it'd work. Maybe I don't disagree entirely with ConcernedReader after all.

    Maybe have the patent system run a sliding scale of protection, with loose protection giving some limited protection (say a maximum possible charge for use plus no right to prevent usage) but large innovations getting stronger protection.

  • Comment number 12.

    Patents "protect" ideas - but why should they? The whole idea of patents was to provide a financial incentive for thinking up good ideas and putting them into practice, as if ideas would not flow otherwise. It is about time this outmoded means of "encouraging" ideas was scrapped: most patents now are awarded to companies, not individuals, who then go on to make excessive profits while squashing any competition (and, hence, source of further new ideas). Was that the original idea behind patents to kill ideas before they can get off the ground? Surely the money for a "good idea" should come not from the idea, but its application in the market place, in which case why should those trying to apply the idea be unduly penalized just because someone "thought it up first" (which is a nonesense in itself - people don't "think things up" but rather recognize possibilities that were already there, so why should someone benefit inordinately just for doing that?) Its about time we recognized that the patent system is slowing up and destroying ideas, not creating and accelerating them. Ideas people will always be ideas people and hence always in demand: adding patents into the mix is just a way of adding nasty toxins to the system to slow the rate of change down while lining the pockets of those already bloated on wealth. At the end of the day, it is not small inventors generally benefitting from patents, but large multinationals, banks and lawyers, who simply use patents to further fleece an already impoverished world.

  • Comment number 13.

    It's really only in the US that patents are hinderances. It's considerably more difficult to get a patent on software in the UK/EU - you have to show that you've created something technical (and non obvious) that is new, rather than cosmetic changes or implementing manual/business processes. Which to my mind means that it's not going to be profitable to invest in a software patent in the UK/EU because if it's non-obvious then your competition will take a while to catchup, whereas if its patented they can easily implement your published idea and hope you can't afford the legal costs.

  • Comment number 14.

    So what exactly is this going to mean for ordinary users of Word? Am I going to be stopped from writing and editing all my work because of two groups of morons arguing over a bunch of code? Most likely, because neither of them care about what this will mean for the rank and file!!

  • Comment number 15.

    @Alice, it means that the custom xml feature that was in Office 2007 isn't in Office 2010. Not a problem for most people since it was a niche feature mainly aimed at developers (so that they could embed information into a word document).

  • Comment number 16.

    Patent Infringement and Validity cases should be dealt with entirely separately.

    Of course Validity should be able to challenged, but not after the offence of infringement, patents are a matter of public record. Challenging Validity should be a matter dealt with by the issuing authority (the Patent Office).

    Infringement may be a criminal or civil matters, but should not become a Validity Challenge which is simply a form of defence after the crime.

    Microsoft has a long history of wilful infringements of others rights as historic settlements over 3 decades show.

  • Comment number 17.

    The patent system needs to be overhauled, in particular software patents. There are companies that trawl other peoples work and then patent the code. Others are granted for work that has not an iota of innovation, instead it is used to block competitors. If Microsoft win, a patent will be of no help to smaller companies who could not afford to fight in court defending the validity of their patent. What we need is a patent system that works correctly.

  • Comment number 18.

    I might have been tempted to agree with Microsoft's position.

    But steady on. Take a deep breath, this is Microsoft we are talking about.
    Of the thousands of patents they hold - just how many of them are bad? The phrase "people who live in glass houses shouldn't throw stones" comes to mind.

    For example, and this is sickening, they hold a patent which protects the act of double-clicking a mouse button to launch an application (US Patent #6,727,830 filed in 2002). What nonsense!

    Take US patent RE33802 which protects the idea of putting a serial number on a document in order to make it unique. Okay, so does this mean that printing firms can't print raffle tickets?

    It seems that traditionally most patents protect stupidly trivial ideas such as these.

    But there is method in their madness. Patents are a useful tool for large corporations with deep pockets. They protect the corporation's interests and deter their competitors, while continually adding patents to their portfolio.

    Issuing patents only stifles innovation and should be stopped, software patents doubly so. Patents help well-funded corporations create and maintain monopolies. If you are a small company with a patent that gets in the way of a large corporation, the outcome is simple. He who hath the deepest pockets wins. Justice is expensive.

    On closer examination it seems to me that given the rotten state of the patent system, the truly useful question is 'Why are trivial or invalid patents issued in the first place?' Well perhaps if large companies did not patent every nut and bolt, the patent office would have more time to better carry out their duties.

    I'm off to patent my new idea for 'a method for venting a frustration by writing it down.'. I'll just use my Word processor... double-click...

  • Comment number 19.

    The large companies are making a mockery of the whole system aided by the US patent office.

    Their sole aim is to build huge numbers of patents purely so that when another large company sues them, this happens all the time, they just counter sue since somewhere in their huge pile is something that the other party is using.

    See the current situation with Apple and Samsung.

    I know the Korean situation well having worked with them for many years. In the large company I worked with all engineers had to produce so many new patents per year.

    During my time with that company a Japanese big company sued for infringement and bingo were hit back with a counter claim. The Japanese just gave up.

    Patents must be fully checked or the system is useless unless you have the pocket to match.

  • Comment number 20.

    Great example ConcernedReader...
    Antonio Meucci invented the telephone, but Bell got the credit and the money, because Meucci could not afford to develop the idea.
    (no relation)

  • Comment number 21.

    @10 ConcernedReader

    I didn't say copyrights and patents should be "merged". I said they should be integrated.

    Integrate = to bring together or incorporate (parts) into a whole.

    Merge = to combine, blend, or unite gradually so as to blur the individuality or individual identity of the parts.

    Two entirely different things: Integrating the copyright and patent systems would be useful, and simpler. Merging them would not.

  • Comment number 22.

    I'm in two minds about this case. There are certainly very many bad software patents and I believe Microsoft is as guilty as any other large corporation in this respect. On the other hand, there have been some truly non-obvious inventions which have been patented --- the RSA cryptosystem being a well-known example.

    At this point I should declare an interest. Some years ago I worked for MS Research and am the principal inventor of (what I still believe to be) a non-obvious algorithm. Specifically,
    http://www.google.com/patents/about?id=YLadAAAAEBAJ&dq=5,635,979

    On balance, I tend to the view that software patents are no longer a helpful way of advancing the state of the art because their lifetime is so much longer than the present rate of progress.

  • Comment number 23.

    Would you make patents more like copyright or vice versa?

    The current copyright system is probably more broken than the patent system (at least there *is* a system there). There are some good points - no need to file copyright, it's assumed to exist. And you can't copyright a recipe, just a particular expression of it (plenty of implications for software, which is just lists of instructions).

 

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