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Looking out for Bilski: software patents v. FOSS

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Users of free and open source software (“FOSS”) have little to gain and much to fear from the patent system. The patent system poses two major threats to users: First, the software itself can be burdened or extinguished altogether by “software patents', that is, claims over basic techniques used in computer programs or common features of programs. Second, the use of computers to perform basic business functions traditionally performed in other ways, can be monopolized as a result of patents on computer enabled “business methods”.

Before 1990, neither the features of software nor the use of computers in “business methods” could be patented anywhere in the world. But the creation of a specialized patent law court in the United States, all of whose judges were patent lawyers, changed the landscape of U.S patent law. The tremors were felt in the rest of the world. The U.S Supreme Court, in a famous 1981 case, held that a computer program used to control the industrial process of rubber vulcanization could not be patented standing alone, because facts of nature, mathematical formulas and algorithms are outside the realm of patent protection. However, after 1982, the Supreme Court largely left patent law to the newly created Court of Appeals for the Federal Circuit (“CAFC”), and soon the CAFC had changed the rules completely while pretending that nothing had changed at all.

The CAFC's decision in 1998, in the case of State Street Bank v. Signature Financial Group, expanded patent's scope to include any ”practical application” of an algorithm, formula, or calculation that produces ”a useful, concrete and tangible result.” Thus injecting patents into areas where they were neither needed nor desired. These included, for example, financial strategies, auction techniques, accounting, and management, training and instruction.

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