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The History of Software Patents

Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course
Posted: January 24, 2009 @ 2:46 pm

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Since the United States Supreme Court first addressed the patentability of computer software in Gottschalk v. Benson the law surrounding the patentability of software has changed considerably, leaving many to wonder whether software is patentable at all. Originally in Benson, the Supreme Court decided that software was not patentable, but then later retracted the blanket prohibition against patenting software. The Federal Circuit then spent the better part of two decades trying to figure out under what circumstances software (or computer related processes) should be patented. This seemed to culminate in the 1998 ruling of the Federal Circuit in State Street Bank & Trust Co. v. Signature Financial Group, Inc. Unfortunately, the waters were once again made murky as a result of the 2008 ruling by the Federal Circuit in In re Bilski.

In truth Bilski did not deal with software per se, but rather was an easy case where the Federal Circuit should have merely held that pure business methods are not patentable. The far reaching and unnecessary language in light of the issues on appeal turned back the clock to a point where the Freeman-Walter-Abele Test ruled the day. While the Bilski test is not exactly the defunct Freeman-Walter-Abele Test, it is hard to ignore their similarities and requires one to consider whether the patent laws have been reversed to a time when you could not know in any objective way whether a computer related processes would be patentable until you knew which three judges on the Federal Circuit had been assigned to hear the case.

In light of statements in Supreme Court opinions suggesting that software is just an idea, and the fact that President Obama wants open source software solutions because proprietary software costs too much money for the US government, it is worth taking a look at the sometimes strange history of patent protection for software in the US. Toward that end, this is the first in a series of articles that will explore the history of software patents and how we have gotten to the point where we are today.

The Evolution Begins – Gottschalk v. Benson

Gottschalk v. Benson was the case that started it all, and one quite frankly that the Supreme Court clearly got wrong. Whether you agree with what the Supreme Court said or ultimately ruled, it is impossible to ignore the reality that the Court just didn’t understand computers, and certainly didn’t understand the invention in question.

The invention described in the patent was related to the “processing of data by program and more particularly to the programmed conversion of numerical information” in general-purpose digital computers. The applicants for the patent claimed a method for converting binary-coded decimal numerals into pure binary numerals. “The claims in the patent application were, however, not limited to: (1) any particular art or technology; (2) any particular apparatus or machinery; or (3) any particular end use.” To the contrary, the claims of the patent application itself purported to cover any use of the claimed method in a general-purpose digital computer of any type. It seems that this fact alone lead to the ultimate decision. This invention was far too important to be patented because it had to be used in every computer; a truly ridiculous way to look at patentability.

The Supreme Court began its analysis in Benson by recognizing that “while a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.” The Benson Court also recalled the familiar and often cited language found in its decision in Funk Brothers Seed Co. v. Kalo Inoculant Co., “[h]e who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end.” Nevertheless, although the patent claims were truly related to a process that employed a mathematical formula to achieve the end goal, the Court held that the mathematical formula involved had no substantial practical application except in connection with a digital computer.

It is almost comical to read this part of the decision today. No practical application except in connection with a computer? Conclusive proof that the Supreme Court didn’t understand the technology and couldn’t appreciate where computing science was headed. This is exactly the reason why inventions should not be denied patents based on lack of patentable subject matter. Those who have no vision and lack understanding can easily kill or at least substantially delay important innovations out of complete ignorance. Such ignorance and short-sightedness does nothing but deny the Constitutional mandate, which is that the patent system as a whole should foster innovation for the betterment of society.

In any event, the decision in Benson meant that it was the opinion of the Supreme Court that if the patent was valid it would completely “pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself.” Of course, this was not at all true. The algorithm could have been used in other situations and circumstances. The patent would have merely prevented the computerized process that enabled a machine (i.e., a computer) to be functional. While this was clearly a foundational and pioneering invention, it was simply silly to have rejected the patent because the invention was too important. If we really want to foster innovation then we need to encourage leaps forward, not punish them. In any event, regardless of your opinion of this case, the Benson decision prevented the patenting of computer software, at least for the time being.

Rethinking Software Patentability – Diamond v. Diehr

Almost a decade after the Benson decision, the Supreme Court in Diamond v. Diehr first recognized that a computer program may deserve patent protection. In this case, the patent claimed a method of operating a molding press during the production of rubber articles. The inventors asserted that their method ensured that the articles would remain in the press for the appropriate length of time. In finding this software patentable, the Supreme Court explained:

[A] claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program or digital computer. . . . [A] process is not unpatentable simply *138 because it contains a law of nature or a mathematical algorithm. It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection. As Justice Stone explained four decades ago: “While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.

. . .

[The equation used in the claimed method] is not patentable in isolation, but when a process for curing rubber is devised which incorporates in it a more efficient solution of the equation, that process is at the very least not barred at the threshold by Section 101.

Consequently, the Diehr decision opened the door for the possibility that some computer programs were entitled to patent protection. Diehr also served as the first step toward the patentability of business methods and electronic commerce patents, although the dawn of the age of the Internet and the inventing of the World Wide Web was still many years away. But this Supreme Court flip-flop forced the United States Court of Appeals for the Federal Circuit to spend nearly two decades struggling with how to reconcile Benson and Diehr.

CONTINUE READING PART 2 —> The History of Software Patents II: Arrhythmia Research

JUMP TO PART 3 —> The History of Software Patents III: In re Alappat

JUMP TO PART 4 —> The History of Software Patents IV: State Street Bank

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Posted in: Computers, Gene Quinn, IP News, Articles, Patents, Software, Software Patent Basics, Technology & Innovation, US Supreme Court

About the Author

is a Patent Attorney and the founder of the popular blog, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.


Leave a comment »

  1. Gene,

    It may be of interest to specifically highlight differences in the history you present with the history presented by our friends at Groklaw (specifically, Groklaw links to the following software history article: Surprisingly (or not), the article seems a little thin on the actual development of legal thought, for example, entirely omitting Alappat.

  2. breadcrumbs-

    Thanks for the link. I will take a look at it as I write the follow on pieces. I have a lot already written and ready to launch this week. I can assure you that my Federal Circuit article will definitely mention Alappat. In my opinion that is one of the most important cases in the development. That is the case that ultimately made it possible for software to come out of the closet and actually be treated like… well… software.

    Thanks for reading.


  3. Gene man what happened to the second posting?

  4. Thanks for the useful info. It’s so interesting