Supreme Court Will Attempt to Clean Up Patent Mess

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The U.S. Supreme Court announced that it will reevaluate whether computer software is eligible to be protected by patent law, especially if said patents allow some tech companies to maintain a monopoly over certain kinds of software.

“Renewing its recent fascination with the kinds of inventions that can be patented, the Supreme Court on Friday agreed to clarify when an analytical method implemented by a computer or by a link on the Internet is eligible for monopoly protection,” read a statement on the Supreme Court’s blog.

The major question is whether computer code can make something like math equations, which are not patentable, eligible for patent protection. For a long time, patent law has considered an abstract idea to be ineligible for patent protection, but new technology has made the line quite blurry, and courts are left trying to decide where to draw the line between a math equation that cannot be protected by a patent and a line of code that makes a software program unique and therefore should be granted patent protection.

The highest U.S. court will explore the concept by reexamining a case in which a company called Alice Corp. developed a program to determine what two parties owe each other after agreeing to exchange cash or “other financial goods” because such agreements can take a few days to process, according to the SCOTUS blog. The program generates instructions for the parties to follow through with on their side of the agreement.

Alice wanted patent protection for its program but was sued by banks that claimed the equations Alice’s program uses are not eligible for patent protection. A federal district judge sided with the banks, but the patent-specializing Federal Circuit reversed the ruling. The Supreme Court’s decision to look back into the case acknowledges that the current patent system is highly confusing and possibly easy for companies to manipulate.

Gigaom reported that the House of Representatives passed a bill called the Innovation Act on Thursday. The bill is designed to protect legitimate patent-holding companies from shell companies known as “trolls” that hold low-quality patents and file lawsuits against businesses with legitimate patents. That fact that the a practice has become enough of a problem to warrant such attention is a sign of how broken and outdated the U.S. patent system currently is.

The news comes after Oracle (NASDAQ:ORCL) decided earlier this week to appeal a case against Google (NASDAQ:GOOG) in which the company claims Google stole code from Oracle-owned Java to write its Android smartphone operating system.

Oracle is trying to fight a judge’s decision made in the 2010 case that Java’s code isn’t copyright protected because it consists of basic functions that are used across the industry for free and are necessary to developing software. Java is an open-source code that is supposed to be publicly available. Oracle claims that Google’s use of the Java code for Android prevented Oracle from capitalizing on the smartphone movement.

Whatever the court decides will have a profound effect on the tech industry, as the companies have battled each other over software patents for years.

Follow Jacqueline on Twitter @Jacqui_WSCS

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