There is no shortage of innovation in business right now; if you want to look at the banking arena there has been altogether too much “clever” innovation and all too little common sense.

“But the idea that something non-physical needs to be tied to a machine to make it patentable is a surprising (and unwise) decision.”

Not surprising in the least, given the history of patent law. There never was a law passed to allow the patenting of anything non-physical and indeed, concepts such as mathematical formulae and laws of the physical universe have been specifically excluded from patents.

“Ideally, they’re meant as an avenue through which innovators can be compensated for their role in science and technological evolution.”

No. Patents were never meant for this purpose. They were an incentive to give up trade secret protection in return for a LIMITED monopoly with the ultimate purpose of bringing technologies out for broader public access. Science has never been patentable and hopefully never will.

“Instead we’re seeing companies set up defensive minefields as a competitive strategy. Weak.”

Not weak, entirely predictable. Under the rapidly escalating quagmire of patent law, what choice do companies have? For example, IBM are one of the biggest filers of patents and almost entirely for defensive purposes because without that they would be taken to the cleaners by a thousand hopeful gold diggers.

Even RedHat have a defensive patent portfolio, and they argue strongly against the software patent system, but can’t take the risk of NOT having them.

Tel, thanks for the comments. Let’s discuss.

My first argument is one that debates the use of the “Machine-or-Transformation” test in quashing the patent. I actually think the patent should not hold, by virtue of the sprawling scope of the subsequent
claims (and in that, I echo Rader’s opinion), which like Samuel Morse’s patents, would serve to patent fundamental principles (hedging here, electromagnetism with Morse).

I am not qualified to argue the patent’s merits on obviousness or other facets, but would love some opinions from those well-versed in the area.

The invocation of the test puts the onus on the court to illustrate that no underlying is transformed or the process is tied to a machine. The machine argument was defeated in court by arguing that its use depended on a “general purpose computer”, which does not qualify as a “machine” for these purposes (See Ex Parte Langemyr, May 28, 2008). So now we’re left with a transformation, which was struck down on the basis of non-physicality.

Yes, I’m well aware that mathematical formulae and other laws of the universe are emphatically non-patentable (not only on their non-physicality, but their scope). No issue there, and is wholly not the point of post. But you ignore that the court has indeed upheld patents where the underlying was very much “non-physical” by the definition I think you’re employing. I’ll elaborate:

The decision quotes a 1982 case In re Abele in which a process converted “raw data into a particular visual depiction of a physical object on a display”. Here the transformation was on data, a non-physical article. This wasn’t shocking, in the sense physicality is determined on the following bases:

“The articles are physical objects or substances, or are representative of physical objects or
substances.”

In the Abele case, the transformation worked with data, not a physical object that was representative of the underlying object.

If you invoke the transformation test, how can you fail Bilski on physicality, if those underlying option contracts representative of money or commodities, which are very much physical (I shouldn’t, but do feel it necessary to insist we not argue money’s physicality, fiat currency etc).

To address your “patenting science” argument, perhaps I was unclear. The United States Constitution, Article I, states that government is able:

“To promote the progress of science and useful arts, by securing for limited times to authors
and inventors the exclusive right to their respective writings and discoveries”

“Science” here means the old-school definition of “general knowledge”, not a wave function. As to your comment, what is the purpose of bringing tech out for “broader public access”? Show and tell? Patent law is indeed there to facilitate progress.

Lastly, I think you miss the point again, where I’m arguing that we need to rethink whether or not the current patent regime is serving the public (and innovation as a whole). I don’t argue the merit of defensive patents under the current schema, it’s useful right now. The “predictability” of defensive patent portfolio proliferation you speak of, and its necessity in managing the “quagmire” is exactly the point. The system is attempting to cure a disease with the wrong medicine, to the detriment of the future.

The question is no longer “is the ‘patent everything’ attitude appropriate”, we’re past that. It’s “how can we shift this attitude and the system to encourage innovation”. Wikinomics can be a guidepost in that process. That’s all.

“Yes, I’m well aware that mathematical formulae and other laws of the universe are emphatically non-patentable (not only on their non-physicality, but their scope). No issue there, and is wholly not the point of post. But you ignore that the court has indeed upheld patents where the underlying was very much “non-physical” by the definition I think you’re employing.”

I happen to feel that the earlier courts were in the wrong to have ever allowed the patenting on non-physical data.

It should be reasonably self-evident that science does not benefit from secrecy. The more people who have access to information, the more alternative ideas are explored and that is the way that progress in made. So, the answer is yes, the exercise of “show and tell” is fundamentally critical to all scientific progress (and indeed, despite the childish connotations in the mind of some, being an active participant in the exchange of ideas is an important part of learning at all levels).

US patent law explicitly excludes laws of nature and abstract ideas. European patent law explicitly excludes software (despite the EPO repeatedly ignoring the law and deciding to follow their own ideas). These rules protect science by preventing research being blocked by legal obstructions. Suppose someone could “own” the boiling point of water? Everyone who’s experiment somehow hinged on this fact would have to pay a fee. Then we would need systems to measure how many times each scientist “used” that boiling point in their calculations. Nothing would get done. Scientists would leave in droves for other countries where they have freedom to get some work done.

Quite frankly, claiming that an abstract representation of reality is equivalent to reality itself is completely bizarre. If law was to follow this principle then target shooting would be regarded as murder. The design of such an interpretation is nothing more than an open door to a “patent everything” strategy.

As to why this court was willing to make a decision contrary to earlier courts… it seems obvious that the motivation is political. There was a boom with the idea that private property would solve all problems, and now we are seeing the tide turn back the other way, as people see that sometimes creating new property law causes more problems than it solves.

In simple terms, IF a “Tragedy of the Commons” does exist, and IF there is good evidence that property law will be useful in solving that tragedy, then there is good justification to create property law. This in no way justifies the creation of arbitrary property law in situations where there is no evidence of a “Tragedy of the Commons”.

“The question is no longer “is the ‘patent everything’ attitude appropriate”, we’re past that. It’s “how can we shift this attitude and the system to encourage innovation”. Wikinomics can be a guidepost in that process.”

I’m still not convinced by the gospel of innovation. I’m not convinced that there is any particular shortage of innovation, nor that there is any good economic reason to encourage a whole lot more, nor that new ideas are automatically good ideas.