Patent Absurdity/Italiano (Italian)

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NOTE: The first 1 minute 16 seconds has a licence problem. We can't use a non-commercial CC licence. That would probably block the film from being shown at film festivals. It might even block the film from being linked to by websites that have advertisements.

(Ciaran, I think the licence is for the English transcript that is being translated, not for the Italian translation of it that is being made in this page. I've raised the issue in http://en.swpat.org/wiki/Talk:Italiano too. --Calmansi 16:02, 20 April 2010 (UTC))

1 00:00:08,776 --> 00:00:14,314 Queste persone si sono riunite per assistere alla discussione della prima causa di brevetto su 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

NOTE: The "non-commercial" licence problem ends here. (see "NOTE" at top of page). For the remaining translation, please us the CC-BY or CC-BY-SA licence.

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 2.2 by Martin Karlsson. Licensed under CC-BY 3.0