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Transcript version 2.0 by Martin Karlsson.
 
Transcript version 2.0 by Martin Karlsson.
 
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Revision as of 11:12, 20 April 2010

1 00:00:08,776 --> 00:00:14,314 Queste persone si sono riunite per assistere alla discussione della prima causa di brevetto software portata dinanzi alla Suprema Corte in quasi 30 anni

2 00:00:14,564 --> 00:00:16,990 - Potete presentarvi e scandire i vostri nomi?

3 00:00:17,882 --> 00:00:21,729 - Certo, uh, uh, Bernie Bilski. B - I - L - S - K - I

4 00:00:24,180 --> 00:00:30,302 - Rand - R - A - N - D, Warsaw - W-A-R-S-A-W

5 00:00:30,552 --> 00:00:33,268 - Potete dirci in breve cosa avete inventato?

6 00:00:33,318 --> 00:00:39,498 - L'invenzione è una fattura dell'energia garantita, che è come un bilancio senza aggiustamenti,-

7 00:00:39,748 --> 00:00:46,768 - ed è un metodo per tutelare entrambe le parti di una transazione. Così, anziché dare ai consumatori,-

8 00:00:47,018 --> 00:00:50,518 -consumatori di energia, una fattura energetica garantita. Ci sono un sacco di meccanismi.

9 00:00:50,768 --> 00:00:54,468 E questi coinvolgono transazioni finanziarie tra consumatori d'energia,

10 00:00:54,718 --> 00:00:58,218 o clienti, e fornitori di energia.

11 00:00:58,468 --> 00:01:03,830 QUEST'UOMO SPERA DI ACQUISIRE UN BREVETTO SU UN METODO FINANZIARIO PER LA TUTELA DEL RISCHIO

12 00:01:04,066 --> 00:01:08,994 E questa è l'invenzione in breve. E' un metodo per generare fatture garantite-

13 00:01:09,244 --> 00:01:12,744 -per i clienti e, anche, per proteggere i guadagni delle aziende di energia.

14 00:01:12,994 --> 00:01:16,743 Il risultato della causa avrà profonde ricadute nel software

15 00:01:17,020 --> 00:01:22,190 - The Bilski Case itself is someone applied for a patent on a business method or software,-

16 00:01:22,440 --> 00:01:27,396 -and patent office rejected it. And now this is that person suing the patent office, saying-

17 00:01:27,396 --> 00:01:30,390 -"You have to grant me that patent."

18 00:01:30,640 --> 00:01:34,140 This case is about what does it mean to be a patentable process.

19 00:01:34,390 --> 00:01:38,913 And so, since software patents fall under the category of processes, because they are not-

20 00:01:39,163 --> 00:01:43,166 -the machine, and they're not a composition of matter, which are some of the other categories-

21 00:01:43,413 --> 00:01:47,357 -of things that are patentable. This case will define what it means to be a patentable process.

22 00:01:52,257 --> 00:01:54,276 - What about justice Roberts? He said, you know,

23 00:01:54,468 --> 00:01:57,452 basically your patent involves people picking up the phone and calling other people.

24 00:01:57,770 --> 00:02:03,065 - It could be reduced to that level, as the certain acts that are performed, but it's much more than that.

25 00:02:03,365 --> 00:02:08,438 It has to do with selling commodity that effects price to one party, selling to a different party

26 00:02:08,738 --> 00:02:12,706 at a different fixed price, identifying counter risk positions.

27 00:02:12,956 --> 00:02:18,668 If you look at claim four in the patent, we have things called claims which describes what the invention is, -

28 00:02:18,668 --> 00:02:25,318 -there's a long mathematical formula in there, that didn't exist in nature or anywhere in the literature,

29 00:02:25,502 --> 00:02:28,110 that these very inventive folks come up with.

30 00:02:28,352 --> 00:02:32,052 - Once upon a time math was not patentable. And nowadays we can have someone -

31 00:02:32,302 --> 00:02:37,812 -like Bilski coming in and saying: "You know, I worked hard on this mathematical equation -"

32 00:02:38,012 --> 00:02:41,564 "- and therefor I should have a patent on this information processing method here."

33 00:02:41,814 --> 00:02:45,249 - You mention in your claim that there's a very long calculation shown there.

34 00:02:45,464 --> 00:02:50,710 Do you think a strong calculation or good math is a basis for a patent?

35 00:02:50,910 --> 00:02:51,714 - It can be.

36 00:02:51,964 --> 00:02:57,710 - The basic process of writing software is that you take a broad algorithm of some sort, you know, -

37 00:02:57,960 --> 00:03:01,760 -some means of doing something with abstract data, and then you apply variable names.

38 00:03:02,010 --> 00:03:05,910 - So for our first derivation let's start with a simple matrix, a matrix of values.

39 00:03:06,160 --> 00:03:11,830 And we'll find the mean of each column, mu one, mu two, mu three.

40 00:03:12,030 --> 00:03:21,184 And we're gonna define Y to be X minus mu for each column.

41 00:03:21,434 --> 00:03:29,468 Now if we have some other factor, X, we can take X dot S and find the projection of X onto this space.

42 00:03:29,718 --> 00:03:31,950 This is called the singular value decomposition (SVD).

43 00:03:32,200 --> 00:03:41,609 Now, here's the trick. Here's the great part. Let's say that this first row, X1, equals sexuality.

44 00:03:41,859 --> 00:03:45,359 Let's say X2 equals "Do you own cats?"

45 00:03:47,126 --> 00:03:51,836 And X3 equals, I dunno, affection.

46 00:03:55,022 --> 00:04:05,502 Ok, so, now we'll also say that, let's take a factor J1 equals Jane's responses on this survey.

47 00:04:05,752 --> 00:04:10,086 Let's say J2 equals Joe's responses.

48 00:04:10,336 --> 00:04:21,308 Now let's do the same projections as we did before. We're gonna take J1 dot S subtract J2 dot S.

49 00:04:21,558 --> 00:04:27,062 We're gonna find the distance between these two points, and we're gonna call that compatibility.

50 00:04:28,414 --> 00:04:35,901 And in that simple step, we've derived patent number 6 735 568.

51 00:04:37,750 --> 00:04:44,286 The trick of our derivation was that before with the SVD, we had abstract numbers.

52 00:04:44,536 --> 00:04:49,974 What the guys at eHarmony did to get this patent, was to assign names to our variables.

53 00:04:50,224 --> 00:04:55,870 So instead of an abstract X1 we have sexuality, instead of X2 we have a preference for cats.

54 00:04:56,120 --> 00:04:59,948 And by making those assignments, by setting variable names in this matter, -

55 00:05:00,198 --> 00:05:05,390 -they were able to take an abstract concept and turn it into a patentable device.

56 00:05:06,440 --> 00:05:13,569 - What we want to do according to the heads of our patent institutions, is take mathematics and

57 00:05:13,819 --> 00:05:18,246 slice it up into as many slices as possible, and hand those slices out. And, say, if you do a

58 00:05:18,496 --> 00:05:26,238 principle component analysis, if you multiply matrices for dating sites, we'll give that to eHarmony.

59 00:05:26,488 --> 00:05:31,532 If it's for equities we'll give that to State Street. And so on and so forth.

60 00:05:31,782 --> 00:05:39,718 And what we're giving out is basically exclusive rights to use mathematics, -

61 00:05:40,083 --> 00:05:44,883 -to use a law of nature, in whatever context. And what we get in return is basically nothing.

62 00:05:45,733 --> 00:05:52,121 - The patents is a government grant, in the US it arises out of the constitution.

63 00:05:52,471 --> 00:05:58,721 - The Framers included the provision for granting exclusive rights to inventors in our constitution,

64 00:05:58,971 --> 00:06:06,093 and the belief was that that was important in order to reward people who had made technological -

65 00:06:06,243 --> 00:06:09,343 - advances that would benefit society.

66 00:06:13,272 --> 00:06:18,156 - The rights that they are granted are not the rights to do the things that they invent, -

67 00:06:18,406 --> 00:06:21,409 -but the right to exclude others from doing that thing.

68 00:06:21,659 --> 00:06:28,345 - So the idea was you have a machine or a thing, which is not previously described in any literature, -

69 00:06:28,595 --> 00:06:34,449 -and which no skilled mechanic could figure out how to make given what is described in literature, -

70 00:06:34,699 --> 00:06:36,457 -and for that you get a patent.

71 00:06:36,707 --> 00:06:42,550 - The basis for determining what is patentable subject matter has continued to evolve -

72 00:06:42,800 --> 00:06:46,300 - over the last 200 years of our national existence.

73 00:06:46,550 --> 00:06:54,588 - In 1953 the Patent Act was modified by Congress, to add the words "or processes" to the word -

74 00:06:54,838 --> 00:06:57,697 - "product" in describing what could be patented.

75 00:07:04,760 --> 00:07:10,833 The Congress which did that was plainly thinking of processes of industrial manufacture. Processes -

76 00:07:11,083 --> 00:07:19,481 - that produced something at the other end. Float glass on molten tin, and it'll become flat, or whatever.

77 00:07:19,731 --> 00:07:25,065 - And it's unlikely that anybody thought of process at that time in terms of computer software, -

78 00:07:25,315 --> 00:07:33,748 -because we didn't have applications on computer software for many years after that last revision -

79 00:07:33,998 --> 00:07:36,998 - of the Patent Act.

80 00:07:46,267 --> 00:07:52,282 - Back in the late 70s the patent law was interpreted such that you couldn't patent software. It was -

81 00:07:52,532 --> 00:07:55,449 - considered a mathematical algorithm, a law of nature.

82 00:08:01,821 --> 00:08:09,430 The legal world changed. The environment was quite different starting with some decisions by-

83 00:08:09,649 --> 00:08:11,254 - the Supreme Court, like Diamond v. Diehr.

84 00:08:11,504 --> 00:08:17,905 - The patent applicant was coming in with a new process for curing rubber. The temperature, and-

85 00:08:18,155 --> 00:08:23,873 - the preciseness of the temperature is essentials in curing rubber well. And the innovation -

86 00:08:24,123 --> 00:08:30,753 -that was being patented in this case was an algorithm to monitor a thermometer -

87 00:08:31,003 --> 00:08:37,038 - that was basically in the process and determined when the rubber needs to be released and cooled.

88 00:08:37,288 --> 00:08:42,505 - And they said "Processes for curing rubber are patentable, there's nothing new about that, -"

89 00:08:42,755 --> 00:08:47,526 "- the fact that they use a computer in implementing it shouldn't change anything."

90 00:08:55,602 --> 00:09:00,070 - The Supreme Court makes it clear that you can't patent software, because it's only a set of -

91 00:09:00,320 --> 00:09:09,300 - instructions, or an algorithm. Abstract laws of nature, algorithms, are unpatentable in the US itself.

92 00:09:09,550 --> 00:09:17,209 However, then there was the creation of the Court of Appeals of the Federal Circuit.

93 00:09:17,459 --> 00:09:24,657 - The problem being solved, in some sense, begins with the fact that trial court judges always -

94 00:09:24,907 --> 00:09:27,180 - hate patent cases.

95 00:09:27,430 --> 00:09:35,310 And the reason they hate patent cases is, for a single trial judge, a lawyer who has spent his/her life-

96 00:09:35,560 --> 00:09:43,914 -doing litigation, a patent case in which she/he is going to be required to find detailed facts about how paint is-

97 00:09:44,164 --> 00:09:52,713 -made or how computers work or how radio broadcast- ing operates, is an opportunity just to made into a fool.

98 00:10:00,133 --> 00:10:05,369 - Congress is attempting to change the system in which patent cases are litigated.

99 00:10:05,619 --> 00:10:11,934 But instead of changing who tried patent cases, Congress left a non-specialist district judge-

100 00:10:12,184 --> 00:10:17,326 -in charge of the trial. And then created a new court of appeals called the Federal Circuit,-

101 00:10:17,576 --> 00:10:22,081 -who's job it was to hear all appeals from patent cases.

102 00:10:22,331 --> 00:10:25,313 Rapidly, of course, this court filled up with patent lawyers.

103 00:10:25,563 --> 00:10:32,622 And the patent lawyers then made the law in the court of appeals that applied to all those district judges-

104 00:10:32,872 --> 00:10:37,556 -who were still making non-specialist decisions of which they were afraid.

105 00:10:37,806 --> 00:10:42,721 Naturally the Federal Circuit turned out to be a place which loved patents.

106 00:10:42,971 --> 00:10:49,537 And it's chief judge, Giles Rich, who lived to be very very old and died in his late 90s,-

107 00:10:49,787 --> 00:10:53,068 -was a man who particularly loved patents on everything.

108 00:10:53,318 --> 00:11:00,273 The Federal Circuit court under Giles Rich sort of broke Diamond against Diehr lose from it's original meaning,-

109 00:11:00,523 --> 00:11:05,068 -and came to the conclusion that software itself could be patented.

110 00:11:05,318 --> 00:11:09,609 - The Supreme Court basically left everything to this court to decide.

111 00:11:09,859 --> 00:11:16,473 - The PTO actually used to reject patents on software, like in the early 1990s, and they did not allowed them.

112 00:11:16,723 --> 00:11:20,223 And the applicants would appeal those rejections to the Federal Circuit.

113 00:11:43,280 --> 00:11:46,798 - In the world of machines you show the Patent Office the machine,-

114 00:11:47,048 --> 00:11:51,697 -and you've got a Patent Office who's claims were "I claim this machine."

115 00:11:52,946 --> 00:11:56,636 In the world of computer software there was no way of defining what the unit was.

116 00:11:56,886 --> 00:12:03,777 I don't claim a program, I claim a technique that any number of programs doing any number of things could-

117 00:12:04,027 --> 00:12:11,492 -possibly use. The consequence of which is very rapidly we began to build up as real estate that somebody-

118 00:12:11,742 --> 00:12:19,014 -owned and could exclude other people from a whole lot of basic techniques in computer programming.

119 00:12:19,314 --> 00:12:24,516 - What happened was, starting in the mid-90s, the number of patents on software started soaring.

120 00:12:24,766 --> 00:12:27,806 An industry attitude started changing too.

121 00:12:28,056 --> 00:12:32,558 So you had Microsoft, which originally didn't deal with software patents very much at all,-

122 00:12:32,808 --> 00:12:36,885 -I guess they got sued in the early 90s by Stac and lost a, uh,-

123 00:12:37,085 --> 00:12:40,817 -significant judgment against them, they started patenting.

124 00:12:41,067 --> 00:12:43,932 - They're gonna have their own set of patents.

125 00:12:44,182 --> 00:12:49,116 So that if a major patent holder threatens them, they can fire back.

126 00:12:49,366 --> 00:12:55,382 - Gradually companies like Oracle were forced to set up patent departments just for defensive reasons.

127 00:12:55,632 --> 00:13:00,481 They had to patent their stuff so that they had some- thing to trade with the companies that had patents.

128 00:13:00,731 --> 00:13:10,945 Mark Webbink: - And so the arsenal started to develop. By year 2001 Microsoft now holds thousands of software patents.

129 00:13:11,195 --> 00:13:15,350 Oracle was probably approaching a thousand software patents. Adobe...

130 00:13:15,600 --> 00:13:19,713 James Bessen: - All of them become more and more aggressive. Patenters and some of the ones who were against-

131 00:13:19,963 --> 00:13:25,516 -software patents ended up suing other companies, and so what you had is an explosion of patenting first-

132 00:13:25,766 --> 00:13:27,729 -and then an explosion of litigation.

133 00:13:32,484 --> 00:13:37,404 By the late 90s about a quarter of all patents granted were software patents.

134 00:13:38,551 --> 00:13:44,233 About a third of all litigation, patent litigation, involves software patents.

135 00:13:44,483 --> 00:13:50,329 About 40% of the cost of litigation is attributable to software patents.

136 00:13:50,579 --> 00:13:52,631 And those numbers have been going up.

137 00:13:52,881 --> 00:13:59,270 So Charles Freeny invented a kiosk that goes in retail stores, and the idea is you'd come in,-

138 00:13:59,520 --> 00:14:05,306 -you could select the music selection, swipe your credit card, put in a blank 9 track tape,-

139 00:14:05,556 --> 00:14:10,917 -and this is is how long ago this patent was, and it would write that music selection onto the tape-

140 00:14:11,167 --> 00:14:13,988 -and you could go away with it.

141 00:14:14,238 --> 00:14:21,649 The patent was drafted in a very vague language so there were terms like "point of sale location",-

142 00:14:21,899 --> 00:14:25,060 -and "information manufacturing machine".

143 00:14:25,310 --> 00:14:32,902 And Freeny eventually sold this patent to somebody who wanted to interpret those terms very broadly.

144 00:14:33,352 --> 00:14:36,652 To basically cover e-commerce.

145 00:14:36,902 --> 00:14:44,956 So here was this very limited invention for this kiosk, and he wanted to interpret those terms in such a-

146 00:14:45,206 --> 00:14:50,102 -broad way so that it would cover transactions that took place over the Internet,-

147 00:14:50,352 --> 00:14:56,228 -you could make them in your office, in your bedroom, in your house, anywhere.

148 00:14:56,478 --> 00:15:00,817 And so it covered virtually all of e-commerce.

149 00:15:01,067 --> 00:15:08,382 The courts initially didn't agree with that interpretation but they appealed it, and the appellant court largely-

150 00:15:08,632 --> 00:15:16,254 agreed with them, and they were able to extract some settlements out of well over a hundred companies.

151 00:15:16,504 --> 00:15:23,452 But the significant thing is, here is this patent you can't tell what it's boundaries were until you get to-

152 00:15:23,702 --> 00:15:29,236 -the appellant court. What most people thought it's boundaries were turned out to be wrong.

153 00:15:29,486 --> 00:15:32,644 - One of the key properties of programming languages is they're very very precise.

154 00:15:32,894 --> 00:15:39,292 You can look at any program language in any language, in C, Python, any language like this,-

155 00:15:39,542 --> 00:15:43,910 -and you know exactly what it's doing. You can look at two pieces of service code and you can say-

156 00:15:44,160 --> 00:15:48,662 "Are this doing the same thing or different things?" And we do this because computers are very picky-

157 00:15:48,912 --> 00:15:53,801 -and we need to tell the computer exactly what we need to do in order to accomplish some task.

158 00:15:54,051 --> 00:15:57,551 The language of patents is almost the opposite.

159 00:15:57,801 --> 00:16:03,001 There's an advantage in being vague, and being broad, being non-specific, because the broader your language-

160 00:16:03,251 --> 00:16:06,751 -the more things you, sort of, catch in your net.

161 00:16:07,001 --> 00:16:12,361 - So it is a large problem in our patent system just defining simply what is the context or the borders-

162 00:16:12,611 --> 00:16:16,148 -of the patent. And what does it cover, and what does it not cover.

163 00:16:16,398 --> 00:16:21,658 And that ambiguity causes a lot of chilling effects, because people are going to avoid doing anything-

164 00:16:21,908 --> 00:16:27,013 -that could possibly be covered by the patent, even if in reality the patent wouldn't cover what they wanna do.

165 00:16:27,263 --> 00:16:33,406 - Let's imagine that in the 1700s the governments of Europe had decided to promote the progress of-

166 00:16:33,656 --> 00:16:41,162 -symphonic music, or as they thought, promote it. Will a system of musical idea patents, meaning-

167 00:16:41,412 --> 00:16:48,306 -anybody who could describe a new musical idea in words could get a patent which would be a monopoly-

168 00:16:48,556 --> 00:16:54,998 -on that idea and then he could sue anybody else that implemented that idea in a piece of music.

169 00:16:55,248 --> 00:17:09,121 So a rhythmic pattern could be patented, or a sequence of chords, or a set of instruments to use together,-

170 00:17:09,371 --> 00:17:17,212 -or any idea you could describe in words. Now imagine it's 1800 and you're Beethoven, and you want to write-

171 00:17:17,462 --> 00:17:23,748 -a symphony. You're gonna find it's harder to write a symphony that you won't get sued for, than write-

172 00:17:23,998 --> 00:17:29,102 -a symphony that sounds good. Because to write a symphony and not get sued you're gonna have to-

173 00:17:29,302 --> 00:17:34,638 -tread your way around thousands of musical idea patents.

174 00:17:34,888 --> 00:17:40,388 And if you complained about this, saying it's getting in the way of your creativity, the patent holders would-

175 00:17:40,638 --> 00:17:44,484 -say "Oh, Beethoven you're just jealous because we had these ideas before you."

176 00:17:44,651 --> 00:17:46,873 "Why should you steal our ideas?"

177 00:17:47,123 --> 00:17:52,634 - People has been making music for thousands of years. There were never any need for patents in-

178 00:17:52,884 --> 00:18:01,148 -the field of music. And since the computer industry has made programming possible, people have been-

179 00:18:01,398 --> 00:18:07,054 -developing software as well, since right from the beginning, there was never a need to have patents-

180 00:18:07,304 --> 00:18:10,516 -in this field in order for the activity to happen.

181 00:18:10,766 --> 00:18:20,582 - Almost everything we were doing back before 1980, 1981, those things, patent played no role in it.

182 00:18:20,832 --> 00:18:30,324 Cut & paste, the embedded ruler in a word processing, word wrapping, a lot of the things that are real-

183 00:18:30,574 --> 00:18:37,566 -important and we take for granted, and that are much more innovative in many ways than patents we have-

184 00:18:37,816 --> 00:18:44,198 -today, 'cos patents can be on some very minute things, that's the way the law works.

185 00:18:44,448 --> 00:18:49,841 Those things happened, we had great advances without patents.

186 00:18:50,091 --> 00:18:54,100 - One of the worlds most respected computer scientists,

187 00:18:54,350 --> 00:19:02,422 Donald Knuth, has said that if software patents had been available in the 1960s and 70s when he was-

188 00:19:02,672 --> 00:19:07,084 -doing his work, that it's probably the case that computer science wouldn't be where it is today.

189 00:19:07,334 --> 00:19:15,164 There would be blockades on innovation that could've seriously prevented the kinds of technical solutions-

190 00:19:15,414 --> 00:19:17,942 -that we take for granted today.

191 00:19:18,192 --> 00:19:24,137 - The programmer writing a long program might conceivably need to check whether 500 or-

192 00:19:24,387 --> 00:19:28,622 -thousand different techniques are patented, and there is no way that she possibly could.

193 00:19:28,872 --> 00:19:35,590 - The Patent Office issues hundreds of software patents all the time. Every Tuesday they issue 3,500 patents-

194 00:19:35,790 --> 00:19:41,032 -and a large number of those relate to software. It's just impossible to review all those patents every week-

195 00:19:41,232 --> 00:19:43,580 -to make sure you're not doing something that could infringe them.

196 00:19:43,830 --> 00:19:53,505 - So there's a provision in the US patent laws that basically holds patent infringers, ahem, at I guess-

197 00:19:53,755 --> 00:20:01,117 -a greater liability if they are shown to willfully infringe. So basically the idea is that if you knew-

198 00:20:01,367 --> 00:20:07,094 -about a patent and you infringed on it, you should have a stricter penalty than if you didn't know about it.

199 00:20:07,344 --> 00:20:14,356 But what this results in is a situation where there is a real disincentive to follow what patent has been made-

200 00:20:14,606 --> 00:20:21,228 -and what new inventions there has been through the patent system, because if you read every patent or-

201 00:20:21,478 --> 00:20:28,070 -there's evidence to show that you have read patents, then you are liable for willful infringement, you knew-

202 00:20:28,320 --> 00:20:32,737 -about the patent and you infringed it anyway, and the penalty is triple damages.

203 00:20:32,987 --> 00:20:39,137 - A number of people suggested that software should be removed from the-

204 00:20:39,387 --> 00:20:40,760 -scope of patentability. Can you comment on that?

205 00:20:41,010 --> 00:20:45,894 - Yes, well, I obviously disagree with that. And I don't believe that software should ever be removed.

206 00:20:46,144 --> 00:20:51,441 It's one of our greatest sources of technical innovation in this country. And to come up with a test that would-

207 00:20:51,691 --> 00:20:55,230 -somehow eliminate software would, I think, be a disaster for the economy.

208 00:20:55,480 --> 00:21:01,852 WOULD IT THOUGH? - Mike and I estimate that outside of pharmaceuticals and chemicals the patents, sort of, are acting like-

209 00:21:02,102 --> 00:21:10,454 -10 or 20 percent tax. You know, the small developer developing something, down the road he has to pay-

210 00:21:10,704 --> 00:21:18,892 -that tax. And every small company I know in software, as long as they've been around a few years and hit-

211 00:21:19,142 --> 00:21:26,950 -the market, somebody is asserting a patent against them, they're running into some potential difficulties.

212 00:21:27,200 --> 00:21:31,609 They very frequently feel obligated to get patent themselves for defensive purposes.

213 00:21:31,859 --> 00:21:40,646 So all of that activity is a tax. It's not something that's helping them innovate, it's an unnecessary activity.

214 00:21:40,896 --> 00:21:47,313 - The primary thing we do is an issue tracking system called RT, or Request Tracker, so it's customer service,-

215 00:21:47,563 --> 00:21:53,506 -help desk, bug tracking, network operations, anything were you've got a whole bunch of tasks that need to-

216 00:21:53,756 --> 00:21:58,089 -get kept track of. And you need to know what happened, what didn't happen, who did it,-

217 00:21:58,339 --> 00:22:04,609 -who didn't do it, when. It's kind of a to do list on steroids designed for a whole organization.

218 00:22:04,859 --> 00:22:10,297 Pretty much everything is open source or free software, under one license or another.

219 00:22:10,547 --> 00:22:18,009 We'll get consulting customers or support costumers who add indemnification language to our standard-

220 00:22:18,259 --> 00:22:27,038 -contract or need us to sign theirs. And it says, in the standard legalities, it's gonna say something like-

221 00:22:27,288 --> 00:22:34,324 -we indemnify and hold them harmless and agree to pay their legal fees and sacrifice our firstborn, if-

222 00:22:34,574 --> 00:22:41,468 -something happens and someone discover that our software is violating a somebody else's patent.

223 00:22:41,718 --> 00:22:46,276 It's very very rarely the case that we end up signing something that has that kind of language in it.

224 00:22:46,526 --> 00:22:48,476 But it eats up a lot of legal fees.

225 00:22:48,726 --> 00:22:59,648 - Look at the innovative people in software in ICT, and ask "Would they be better of if the patent system-

226 00:22:59,898 --> 00:23:03,161 -was abolished?" The answer is probable "Yes".

227 00:23:03,411 --> 00:23:11,472 - Who's benefiting? Patent lawyers is number one. Number two, you've a small number of so called-

228 00:23:11,722 --> 00:23:17,822 -trolls who are benefiting, but it's not clear even most of them is making much money.

229 00:23:18,072 --> 00:23:25,580 You're seeing more recently, in the last 4 or 5 years, companies like Intellectual Ventures and-

230 00:23:25,830 --> 00:23:32,364 -hedge fonds who are acquiring large volumes of these trash patents and using them to extract hundreds-

231 00:23:32,614 --> 00:23:38,129 -of millions of dollars from companies. They're benefiting, they maybe the biggest beneficiaries.

232 00:23:38,379 --> 00:23:42,872 - There's a lot of bad press in the last few years about the harm that's caused by software patents.

233 00:23:43,122 --> 00:23:49,268 And we think that's had a political influence on the PTO to get them to slow down their issuance and start-

234 00:23:49,518 --> 00:23:51,444 -rejecting them, and that's what has resulted in the Bilski case.

235 00:24:00,270 --> 00:24:07,630 - Well the biggest, first bad press story was the Blackberry patents, where all the Congressional-

236 00:24:07,880 --> 00:24:12,228 -representatives have their Blackberrys and there was a company called NTP that sued the manufacture of-

237 00:24:12,478 --> 00:24:17,425 -Blackberry saying that all Blackberrys infringed it's patent. Well, NTP was this company which is just a-

238 00:24:17,675 --> 00:24:22,532 -one person holding company, they didn't make any products or services themselves, and so-

239 00:24:22,782 --> 00:24:29,764 -this got a lot of attention in the Wall street Journal and Washington Post, and Congress persons were really-

240 00:24:30,014 --> 00:24:34,039 -upset that they may lose their Blackberrys and they may not be able to communicate efficiently.

241 00:24:34,289 --> 00:24:40,950 So that caused a lot of attention, then you had all these patents on banking methods and imaging for checks,-

242 00:24:41,200 --> 00:24:44,188 -those patent holders were asserting against the banking industry, and the banking industry has-

243 00:24:44,438 --> 00:24:47,686 -a lot of influence on Capitol Hill, and so they've been going down there and saying "Look, these types of-

244 00:24:47,936 --> 00:24:52,553 -patents are causing us lots of harm." Then you add into that the whole patent troll phenomenon in-

245 00:24:52,803 --> 00:24:58,457 -Eastern District of Texas, with small patent holders suing large IT companies like Google, Microsoft-

246 00:24:58,707 --> 00:25:04,293 -IBM and Hewlett Packard. And all these companies also have legislative influence, and they've said-

247 00:25:04,543 --> 00:25:08,612 -"These types of patents are causing real harm to our business, they're costing us jobs, they're increasing-

248 00:25:08,862 --> 00:25:13,881 -the price of products and services that we offer to our customers, and you need to do something about it."

249 00:25:21,620 --> 00:25:27,428 - The situation we find ourselves in is that the lower court, the Court of Appeals of the Federal Circuit,-

250 00:25:27,678 --> 00:25:32,140 -is essentially a court for patents, for hearing patent cases.

251 00:25:32,390 --> 00:25:40,741 And this is the first time the Supreme Court has taken up that scope of patentability.

252 00:25:40,991 --> 00:25:47,852 And specifically this test that was implemented by lower court, does talk to software patents.

253 00:25:48,102 --> 00:25:55,724 And so, it's basically a 20 year history of software patents being granted due to the lower court.

254 00:25:55,974 --> 00:26:01,286 And so, we're hoping that the Supreme Court will clear up the mess that the lower courts created.

255 00:26:01,536 --> 00:26:06,065 And restamp it's authority which basically said that you cannot have software patents.

256 00:26:06,315 --> 00:26:12,078 - When you saw the arguments that where brought by Bilski's lawyer, the patent bar is in some sense-

257 00:26:12,328 --> 00:26:21,238 -an organized lobby. And an expansive subject matter that's available to be patented is in their interest.

258 00:26:21,488 --> 00:26:26,406 And it's clear that that was frustrating to some of the justices. Some of them were frustrated by how-

259 00:26:26,656 --> 00:26:28,685 -expansive patentable subject matter has become.

260 00:26:28,935 --> 00:26:34,553 - They seem somewhat dismissive of the idea that you could patent this particular idea.

261 00:26:34,803 --> 00:26:40,169 - I think people has a hard time getting over the idea that you can get a patent on hedging commodity-

262 00:26:40,419 --> 00:26:45,580 -risk. But if you actually look at the claims and look at what's in there, it is a process and it's no-

263 00:26:45,830 --> 00:26:50,080 -different than any other process. It just may be that it's not the way that they thought of patent-

264 00:26:50,330 --> 00:26:51,817 -law in the past.

265 00:26:52,067 --> 00:26:56,321 - We were encouraged by the comments by the justices which showed that they were skeptical-

266 00:26:56,571 --> 00:27:02,630 -and which suggested that they understood that software is little more than a series of steps,-

267 00:27:02,880 --> 00:27:08,441 -that could be written out as mathematical formula, or written out on a piece of paper, or, as was-

268 00:27:08,659 --> 00:27:11,638 -mentioned by one of the justices, typed out on a typewriter.

269 00:27:11,809 --> 00:27:17,117 - Software patents on a general purpose computer have never been explicitly endorsed by this court.

270 00:27:17,367 --> 00:27:23,798 And this court has also shown no compunction about reversing rules that've held for a very a long time.

271 00:27:24,048 --> 00:27:27,662 They clearly thought that the petitioners here was trying to get a patent on something very basic,-

272 00:27:27,912 --> 00:27:29,924 -some basic forms of human activity.

273 00:27:30,174 --> 00:27:34,861 MORE THAN 200,000 SOFTWARE PATENTS HAVE BEEN GRANTED IN THE U.S.

274 00:27:35,611 --> 00:27:42,489 PROGRAMMERS FIND IT INCREASINGLY DIFFICULT TO WRITE SOFTWARE THEY WON'T BE LIABLE TO BE SUED FOR

275 00:27:42,739 --> 00:27:46,239 NOW IMAGINE...

276 00:28:39,908 --> 00:28:46,257 Transcript version 2.0 by Martin Karlsson. Licensed under CC-BY-NC-SA