Thursday, July 1, 2010

Business Method Patents: Some Important News...Kind Of

Those of us who play in the software and innovation world have been waiting for a loooong time for the US Supreme Court to decide a case called Bilski v. Kappos. Well, the decision finally come out Monday, all 100+ pages of it. And it says...?

Well, on the issue, it says Mr. Bilski doesn't get a patent on his idea. However, the bigger question at issue here - can ideas be patented?> - basically gets a wave. According to the analysis over at Groklaw, the court acknowledges that the tests used to determine whether a business method is patentable don't really work for conceptual methods (think software or, even more extremely, bioengineering intellectual property). The problem with the decision is that, even though the court acknowledges the need for a standard to determine what ideas can be patented, it doesn't create that standard.

There's a LOT of discussion out there on this subject (search "software patents" and "VC" or "innovation" to read folks like Fred Wilson and Brad Feld on the subject, or explore Groklaw's collection of materials on the case, including the amicus briefs from companies like Google and Bank of America). The lack of a clear standard creates costs that a company must bear to defend its IP position. That slows innovation. That doesn't seem very just.