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New Patent Laws Impact the Software World

Excellent article from The Wall Street Journal explaining how new patent laws will make it tougher to receive software patents and how creators may look to other intellectual property's such as trademarks and trade secrets.

These are hard times for software patents.

Months after the Supreme Court ruled on whether—and when—computer programs can qualify for intellectual-property protection, software patents have been dropping like flies. Reports WSJ’s Ashby Jones:

Since the country’s top court struck down patents on a computer program that reduces risk in financial transactions, federal trial courts have rejected software patents in nine cases, according to Lex Machina, which supplies patent data to lawyers. The U.S. Court of Appeals for the Federal Circuit, which sets much of the nation’s patent law, has nixed software patents in three others.

Among the invalidated patents was one involving an online dieting tool, another for a computer bingo game, and yet another for using a computer to convert reward points from one company’s loyalty program to another’s.

The trend represents a worst-case scenario for patent-licensing firms, which their detractors call “patent trolls.” In recent years, such firms have bought up masses of patents on software and other technology, hoping to make money by licensing those patents to other companies or suing them for patent infringement.

Patent experts say knocking down flimsy software patents helps to keep licensing firms in check. But the Supreme Court’s unanimous ruling in CLS Bank International v. Alice Corp.could have a wider impact, affecting patents in other fields, such as biotechnology and medical diagnostics.

“This is only the beginning of the fallout,” Mark Lemley, a patent lawyer and law professor at Stanford University, told WSJ.

Justice Clarence Thomas, who wrote June’s high-court opinion, said that for a software patent to be valid, it must describe more than an old idea simply applied to a computer.

William F. Lee, a leading patent litigator at Wilmer Cutler Pickering Hale & Dorr LLP in Boston, said he thinks the CLS Bank ruling might ultimately prompt some inventors and “endlessly creative lawyers” to rely on trademark or trade-secrets law to protect their ideas, rather than patent law.

Some, like Google Inc. senior patent counsel Suzanne Michel, think software patents are facing a long-overdue reckoning. Others, though, fear a wider erosion of legal protections for inventors if courts start invalidating patents on other ideas, like ones requiring costly research-and-development.

“You need strong legal protections to spur invention, bring ideas to market,” said Timothy Holbrook, a patent expert and law professor at Emory University.

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