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Patent law is mind numbingly arcane, technical, and boring, so let me simplify as much as possible. This case was about what the legal test should be to determine whether certain processes can be possibly eligible for patent protection. For typical practical technical or industrial processes, it's not a difficult question. But for "business-related" methods, such as the one here--which had to do a way for commodities buyers and sellers in the energy market to hedge against the risk of price changes by following a certain mathematical formula--the question gets trickier. Courts are leery of opening the door all the way because then we'd be swamped in even more ridiculous patents than we are now (such as the attempt by Dustin Stamper, President Bush's Top Economist, to secure a patent regarding an application for a System And Method For Multi-State Tax Analysis, which claims "a method, comprising: creating one or more alternate entity structures based on a base entity structure, the base entity structure comprising one or more entities; determining a tax liability for each alternate entity structure and the base entity structure; and generating a result based on comparing each of the determined tax liabilities").
The Court of Appeals for the Federal Circuit (CAFC) tried to do this by adopting a more rigid test than had been used before. They said that a process could be patented only if it (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing--this is the "machine-or-transformation test." Based on this test, the claimed business method was rejected. The problem is, this test is not in the Patent Act. So the Supremes had to take a crack at it. Now I have mentioned this case before, in The Arbitrariness of Patent Law; Supreme Skepticism Toward Method Patents; and Radical Patent Reform Is Not on the Way. This is one of these cases that had patent lawyers crying crocodile tears, gnashing their teeth, acting as if this was just part of the terrible and radical--radical!--movement to scale back patent rights. Anyway, I predicted:"I suspect the Court will choke back a bit on software and business method patents-but not too much." It was obvious from the oral arguments that the Court saw how ridiculous it would be to have an open test that allowed a lot more types of processes be eligible for protection. You could have patents on anything. So they want to choke back on this, and so did the CAFC. Unfortunately, the patent law is there. And the judges have to interpret this mess. It's not their fault, really. I don't blame them for this impossible task. As I noted in a recent post,
As I noted in Another Problem with Legislation: James Carter v. the Field Codes, there is a fascinating paper published in 1884 by James C. Carter, The Proposed Codification of Our Common Law: A Paper Prepared at the Request of The Committee of the Bar Association of the City of New York, Appointed to Oppose the Measure. This paper was an attack on David Dudley Field's attempt to (legislatively) codify New York's common law. Carter opposed replacing case law with centralized legislation. Carter notes that caselaw precedents are flexible and allow the judge to do justice (see also John Hasnas's classic The Myth of the Rule of Law), while statutes are applied literally, even where injustice is done or the legislator did not contemplate this result. Thus, Carter argues, one of the worst effects of legislatively codifying law-replacing organically developed law with artificial statutes-is that it changes the role of courts and judges from one in which the judge searches for justice into mere squabbles over definitions of words found in statutes. As he said at pp. 86-86:
At present, when any doubt arises in any particular case as to what the true rule of the unwritten [i.e., judge-found, common-law developed] law is, it is at once assumed that the rule most in accordance with justice and sound policy is the one which must be declared to be the law. The search is for that rule. The appeal is squarely made to the highest considerations of morality and justice. These are the rallying points of the struggle. The contention is ennobling and beneficial to the advocates, to the judges, to the parties, to the auditors, and so indirectly to the whole community. The decision then made records another step in the advance of human reason towards that perfection after which it forever aspires. But when the law is conceded to be written down in a statute, and the only question is what the statute means, a contention unspeakably inferior is substituted. The dispute is about words. The question of what is right or wrong, just or unjust, is irrelevant and out of place. The only question is what has been written. What a wretched exchange for the manly encounter upon the elevated plane of principle!
Or, as I note in "Legislation and the Discovery of Law in a Free Society," Journal of Libertarian Studies 11 (Summer 1995), "Thus, previously, law was thought of as a body of true principles ripe for discovery by judges, not as whatever the legislator decreed. Nowadays, however, legislation has become such a ubiquitous way of making law that ‘the very idea that the law might not be identical with legislation seems odd both to students of law and to laymen.'" [Bruno Leoni, Freedom and the Law]
The point is, the judges here are merely interpreting arbitrary words of an artificial law, a statute--a written down edict of the legislature, a bunch of words that have no inner harmony, no guarantee of consistency, no relationship to justice. So you can't really criticize the courts too much for how they construe these legal abominations.
Back to Bilski. So the Court rejected the CAFC's holding that the "machine-or-transformation test" was the sole test for determining patent eligibility. They said that while this test "may be a useful and important clue or investigative tool, it is not the sole test for deciding whether an invention is a patent-eligible 'process.'"But they had to find a way to strike down this patent, so they did so based on an older test, one that just said you can't patent "abstract ideas." So, the Court was able to reject the narrow test of the CAFC, without having to allow this business method patent. But they wanted to encourage the CAFC that they could try to find yet other ways to limit questionable method patents: "In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit's development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text." I.e., they punted: you guys figure out a better way to shut the doors a bit more, consistent with this statute.
So what do we have: we have a very slight narrowing of patent eligibility by re-use of an old "abstract idea" test; a rejection of the more bright-line, narrower but unstatutory test of the CAFC; and more legaluncertainty. And while the patent bar will use the slightest modification of patent law to cry that the sky is falling, it's not. Unfortunately.
Fortune's Don't ice me, bro! When memes meet the marketplace relates the battle by Vodka peddler Smirnoff against fans of its Smirnoff Ice beverage. Apparently it had become popular with "Bros"--"a college-age person ... They like to hang out. A lot of them drink beer and wear backwards baseball caps. A lot of them drive SUVs and listen to Dave Matthews Band"--well, until Smirnoff sued them, I guess. Some frat-boy antics arose where these kids of privilege and no rhythm would "ice" each other--basically daring or challenging or pranking each other to drink a Smirnoff Ice. Then someone set up fan site brosicingbros.com, with pictures etc. of people "Icing" each other.
Good PR for Smirnoff, right? Well apparently Smirnoff didn't think so, so they threatened the site with a copyright and trademark lawsuit, so it was taken down. The case by Smirnoff is taken apart in Bros Icing Bros - A Case for Copyright Bullying by Overreacting Smirnoff Lawyers by legal non-profit called NewMediaRights, which heroically provides "free legal assistance to bloggers, journalists, and filmmakers getting bullied by companies into taking down their websites."
A recent CNET video on "Intellectual property rights vs. journalism" shows a Stanford University's Innovation Journalism conference on June 7, with a panel discussion by various mainstreamers discussing the quesion "Is intellectual property protection a threat to journalism?" The lack of libertarian principle and sound economics has these commentators floundering as they discuss various cases where IP infringes free speech and freedom of the press. Lacking any principled approach they retreat to legal positivism, talking about how the Constitution protects both freedom of the press and speech as well as IP rights, so some "balance" must be made. Without Austrian economics and libertarian principle, even well-intentioned people, who sense that something is wrong, are helpless before the state's propaganda and onslaught of legal positivism.
I've been enjoying your commentary on various Twit network podcasts for a while now. On the recent MacBreak Weekly, I found your exchange with Merlin Mann about open source interesting. I detect a whiff of libertarianism in your remark about the force of the state being used to enforce taxes--which I appreciate, as I'm a libertarian myself. I'm also a patent attorney and have written extensively about why patent and copyright law are anti-free market and unlibertarian (my reasons may be found at The Case Against IP: A Concise Guide, available at http://www.stephankinsella.com/publications/#IP).
You are right, in a way, that the free market will come into play here--but the power of patent and copyright holders is not a free market power. It is an artificial and unjust monopoly given to them by the state, which they then use in the courts to get the force of the state (as with tax collection) to extort money from third parties. So, given this monopoly power, yes, the free market will temper somewhat how much they can extort from people, but still, it's unjust and greatly distorts the market. It also leads to hostility against the free market when people wrongly identify this state monopoly granting practice as part of the free market.
That said, I agree with you that there is no "religious" reason for a given individual or firm to use open source over non-open -- whatever works better and is the better deal for you, of course. And in fact the "open source" model is not without problems: it also relies on copyright, and has insidious aspects -- that's one reason I, as an anti-copyright type, prefer public domain or creative commons attribution only instead of the share-alike/GNU type model (which I explain in Copyright is very sticky!, Eben Moglen and Leftist Opposition to Intellectual Property, and Leftist Attacks on the Google Book Settlement).
Well, back in 1995, that is :) See his post Bye-Bye for IP, an excellent short critique of "intellectual property." As I noted in the comments, I think I tied him in coming to my senses about IP: I believe my first published piece against IP was in 1995 as well in the IOS Journal. There may have been something earlier; I'm not sure. I may have presented something a bit earlier at some Federalist Society meetings in Philadelphia; the next thing I can find that I published was in 1998 for the Pennsylvania Bar Association Intellectual Property Newsletter (later republished in a Federalist Society online forum).
The 1995 publication followed on the heels of my taking the patent bar exam in 1994. I had been thinking about IP for a long time, since 1987 or so at least, because Rand's defense of IP had always bugged me. I started thinking about it harder in 1992 or so, when I started practicing IP law.
As I noted previously, I was interviewed recently for a promising new documentary by lawyer-philosopher David Koepsell and filmmaker Taylor Roesch, "Who Owns You?" (Here's the first trailer, on Vimeo.) Here's an email I just received from Taylor:
Hello Family and Friends,
As you may or may not know, for the last eight months, I have been filming a documentary on the subject of human gene patenting with David Koepsell, philosopher and author of the book Who Owns You? The Corporate Gold Rush to Patent Our Genes. We have made great progress since last October, filming numerous interviews with genetic counselors, patent attorneys, and the one and only James Watson. Currently, we have over 35 hours of footage and expect to film another 35 hours this summer. Below is a link to the trailer for the documentary:
Our film has nicely dove-tailed with the recent court case between the Myriad Genetics, patent holder of genes BRCA1 and BRCA2 (which contribute to breast cancer), and the ACLU as well as numerous individuals and clinical organizations. At the beginning of April, the honorable Judge Sweets of the Federal District Court in New York, ruled in favor of the ACLU, making Myriad's patents invalid. Initially, this was great news! Not only had the ACLU won this case, but my film had an ending. My celebration was premature because Myriad has decided to appeal the decision. The case is currently in the Appellate Court and both sides intend on taking it to the US Supreme Court. It will be years before a final decision is reached. If we can spotlight this issue in the public square, it will help build public support for the lower court's decision, and perhaps the Appellate Court and Supreme Court will uphold the recent ruling.
But there is more at stake than this one case, over 20% of the human genome has been patented. While the ACLU case highlights this problem, there are still many questions about whether it will invalidate all of these sorts of gene patents.
We have some great people willing to help us as you can see from our trailer but there are still a lot of costs involved in finishing the film. We need additional funds to conduct more interviews in Chicago, Washington DC, Berkeley CA, and The Netherlands. After we finish filming this summer, post production will begin and a final product should be ready by December 2010. We have financed much of the work ourselves, but we will need at least $3,000.00 to complete this important film. Any money you can contribute will go a long way to getting this documentary done and this issue heard. Please feel free to send this email along to anyone you think might be interested in helping us out.
Below is a link to our Kickstarter website where you can easily donate to our project:
Here's the first trailer for a promising new documentary by lawyer-philosopher David Koepsell and filmmaker Taylor Roesch (I was interviewed for it as mentioned here). Vimeo;
Over the last 20 years, the United States Patent and Trademark Office has been issuing patents to universities and private companies on raw human genes. One company or university is given a legal monopoly over a molecule that is inside every human being and many other animals. This documentary explores the legal, ethical, and clinical ramifications of human gene patenting.
Fortune's 
Dear Mr. 
