U.S. Supreme Courts Rules Against Software-Based Business Method Patent

On June 19, 2014 The United State Supreme Court handed down its ruling in the case of Alice Corporate Pty. LTD, v. CLS Bank International, a long anticipated case dealing with the viability of so-called “business process” or “business method” patents, even when that process is implemented with the assistance of a computer. In an opinion written by Justice Clarence Thomas, the Court, in a unanimous decision, ruled that where “[a] method claim does no more than simply instruct the practitioner to implement [an] abstract idea… on a generic computer… [it] is not ‘enough’ to transform the abstract idea into a patent-eligible invention.”

The Alice Corporation case centered around the patentability of a method for reducing risk that the parties to a financial transaction will not pay what they owe, making use of a computer based implementation of the methodology. Alice Corporation had argued in the case that, because the the process “required a substantial and meaningful role for the computer” that the process whet beyond being a mere abstract idea. Justice Thomas’ opinion, however, clearly declared that use of a computer added nothing to the abstract idea, and thus the process in question was non-patentable.

This Alice Corporation follows in the steps of the Supreme Court’s 2010 ruling Bilski v. Kappos, in which the Court that a method for hedging risk was “a fundamental economic practice long prevalent in out system of commerce” and that it was, in nature, an abstract idea and, thus, not subject to being patented.  In his opinion in Alice Corporation, Justice Thomas drew a parallel to the Bilski case, stating clearly that both kinds of processes are squarely within the realms of abstract ideas.

It is clear that this case, along with Bilski and the 2012 case of Mayo Collaborative Services v. Prometheus labs, will be thoroughly scoured by technology companies in an attempt to triangulate the point at which specific technology products implementing processes can become eligible for patent protection. While the precise line or demarcation for this is by no means clear yet, it is clear that the Supreme Court is setting and increasingly high bar, ostensibly in the hope of avoiding he creation of unreasonable bars to continued technological innovation.

Is net neutrality dying? Has the FCC killed it? What comes next? Here’s what you need to know

This is a good primer on Net Neutrality and why it maters. Give it a read!

Gigaom

The issue of net neutrality is back in the news again, thanks to some proposed rule changes by the Federal Communications Commission, changes that the regulator says are aimed at protecting a “free and open internet.” A chorus of critics, however, say the commission is trying to eat its cake and have it too — by pretending to create rules that will protect net-neutrality, while actually implementing what amounts to a pay-to-play version of the internet, one that favors large incumbents.

It’s a complicated topic, and one that is prone to a certain amount of hysteria and hyperbole. So what follows is a breakdown of what you need to know, and what some legal experts, technology insiders and advocacy groups are saying about it:

Why is the FCC changing its rules?

The regulator’s ability to monitor and punish breaches of net neutrality was thrown into limbo by a court ruling…

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The Business of Bitcoin: Taxable Property

Here is a somewhat more extensive discussion of the implications of the IRS’ recent guidance on the tax treatment of bitcoin, written by BCS associate attorney David Freda.

Briskin, Cross & Sanford - Business Law Blog

As you may have now heard, on March 25, 2014, the IRS declared that, at least for now, Bitcoin will be taxed as property, rather than as a currency.  For those who view bitcoin as an investment vehicle similar to stocks, this ruling sets a clearer path with well known “rules of the game” for dealing with the tax implications of bitcoin.

But for those who are interested in bitcoin as a new currency, the path is now cluttered with administrative, legal, and financial complexities.

In order to better understand the implications of the IRS’ new stance, let’s take a quick look at the taxation of property. Generally speaking, if you purchase property and it appreciates in value, you must pay tax on the gain you realize above the original purchase price when you sell the property. This rule has traditionally applied to stocks and bonds in the same…

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IRS Issues Guidance on Taxation of Virtual Currencies

The IRS has issues a notice, Notice 2014-21, providing guidance on its position regarding how virtual currencies such as Bitcoins should be taxed. Under this new guidance notice, the IRS has taken the position that virtual currencies and crypto currencies, such as Bitcoins, are taxable as property, and transactions occurring using virtual currencies will be treated as property transactions for tax purposes.

While this Notice does not solve all of the concerns and issues inherent in the use of virtual currencies, it at least answers nagging questions regarding the U.S. federal tax treatment for the currencies and for transactions carried out using such virtual currencies.

When is software patentable? The Supreme Court is about to weigh in

The Alice Corp. case definitely represents a potential pivot point for software patents. The determination of what what is and abstract idea and what is not in the context of computer software has long been a difficult and fuzzy process. It is hoped that the U.S. Supreme Court will use its decision in the Alice Corp. case to clarify that analysis, thus providing clearer direction to software authors who are considering whether to seek patent protection for their creations.

Gigaom

Software patents have always been controversial, in large part because the dividing line between a patentable software-based invention and one that is not has never been clearly defined. But the often hazy body of law that determines software patentability could be about to change.

On March 31, the U.S. Supreme Court will hear oral arguments in Alice Corp. Pty. Ltd. v. CLS Bank Int’l., No. 13-298, a case that could have wide consequences in the tech community and beyond.  At stake is when and how a particular software-based invention—that is, an invention that incorporates the performance of a computer and software—is entitled to a patent.

At the heart of the matter is the “abstract idea.” An abstract idea on its own is not patentable, but what exactly counts as an abstract idea? The Supreme Court has never set out a specific test for what is and is not…

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Beacons And iBeacons Create A New Market – Business Insider

Beacons And iBeacons Create A New Market – Business Insider.

An upcoming trend for business to look out for is the “Beacon”. This is small device which businesses can place within their business to either gather information on its customers or push information to the customers by interacting with their smart phones (typically by a low-energy Bluetooth connection).

While this is not new technology, recent advances in the cost and power-efficiency of such beacons and the greater prevalence of smartphone users in general and smartphone users who use their devices while shopping, dining, or otherwise engaged in commerce in specific has made beacon deployment a far more attractive proposition for data-savvy businesses. Beacons allow businesses to not only engage in very accurate location tracking of customers, but to push messages directly to customers based upon their location (ex. As customer walks by a rack of clothing, a message can be pushed to them, letting them know that everything on that rack is 20% off for today only.). Likewise, businesses can track the flow of customer traffic, where they do and do not go, what order they visit places within an establishment, and even, potentially what items they stop an look at. This can, clearly, be powerful data for businesses to use, not only for interacting with customers, but in choosing layout of a business and other “customer experience” considerations.

On the downside, there are potential privacy and security implications of this technology, not only for the customers / consumers, but also for the businesses collecting this data. The more intrusive (and non-anonymous) the data a business collects on its customers, the greater the need for policies, procedures, and infrastructure for dealing with this data safely, securely, and withing the parameters of what the law requires. That having been said, this is very exiting technology that can open many new doors for businesses in terms of business intelligence and customer interaction.

Ford Exec: ‘We Know Everyone Who Breaks The Law’ Thanks To Our GPS In Your Car – Business Insider

Ford Exec: ‘We Know Everyone Who Breaks The Law’ Thanks To Our GPS In Your Car – Business Insider.

While Ford’s VP of Global Marketing and Sales has since tried to retract his statements, it is fairly obvious that his original assertion that “[Ford] know[s] everyone who breaks the law, we know when you’re doing it. We have GPS in your car, so we know what you’re doing.”  is, in fact, spot-on the truth. While Ford may not be currently doing nefarious things with the data is collects from the GPS devices is it now installing in all of its vehicles, it does highlight the fact that companies that create products we buy and own are now collecting data on us over which we, as consumers, have zero control or ownership.

Data collection of this scope and nature raises huge privacy concerns, and certainly offers even further potential in-roads for the government to collect surveillance data on individuals. As you may be aware, recent court decisions have held that law enforcement cannot palce GPS trackers on automobiles without first obtaining a warrant from a court to do so. With the collection of this kind of data by car companies such as Ford, there is now no deed for law enforcement to obtain a warrant to track a suspect. They can simply demand the records maintained by Ford, for which, based on current case law, there is no requirement for a warrant.

While I am neither a Luddite decrying the dangers of technology, nor a paranoiac assuming that either the Governement or “Big Business” are out to get us, this sort of widespread and pervasive data collection clearly points out the need for a robust public debate over the meaning and boundaries of privacy in the digital age. While there is immense good (economic, social, and otherwise) that we can do with all the data we are now capable of (and are in fact) collecting and analyzing, there comes with it significant dangers of destroying personal privacy altogether and eroding the civil rights accorded to U.S. citizens under the U.S. Constitution.

While this debate had begun to come to the forefront of many people’s consciousness with the revelations of the activities of the NSA by Snowden, it is increasingly clear that the definition of privacy and privacy rights of individuals (and even businesses) is something that requires wide ranging thought, analysis, robust public debate, and in the end decisive legal action. Both our economy and our personal freedoms depend the outcome of the process. We cannot simply afford to sit by and “see what happens”. The statekes are far to great.

Read more: http://www.businessinsider.com/ford-exec-gps-2014-1#ixzz2q0Y51SBy

New bipartisan bill could squash the widely-hated patent troll industry for good | The Verge

New bipartisan bill could squash the widely-hated patent troll industry for good | The Verge.

It appears that today U.S. Representative Bob Goodlatte of Virginia introduced a piece of legislation to broad bi-partisan support which is aimed squarely at cutting down on the number of frivolous and abusive patent suits which are roiling the technology industry.

 

The proposed legislation would  institute a “loser pays” system for attorneys’ fee awards, would delay burdensome discovery requests until the court has first interpreted the disputed patent, and would increase transparency of patent ownership (curtailing patent troll’s favored M.O. of using multiple shell companies to hide behind and/or use a fronts in patent litigation).

 

This proposed litigation, while not necessarily a panacea for the the intelelctual property problems currently facing companies in the technology industry, would certainly go a long way to curb some of the more egregious and abusive tactics currently being utilized by non-practicing entities (a/k/a patent trolls).

 

It will be interesting to see if this bill will actually be passed into law. Here’s to hoping!

Planting A Startup Garden

An interesting local-centric twist on the VC / Accelerator concept.

I like it!

Google Chromes cache makes data easy to steal – Is you credit or business at risk?

Google Chromes cache makes data easy to steal.

For those using the Google Chrome web browser, it is important to know that a critical privacy bug has been found in the browser software which has not yet been fixed by Google.

 

Specifically, Chrome routinely stores sensitive information, such as names, e-mails, contact information, and/or even credit card information which are typed by users into web forms at trusted websites. It appears that Chrome stores this information within the program in plain text which can be easily accessed by anyone with access to the user’s computer.

 

As such, until Google addresses this vulnerability, users should be extremely cautious in entering private data into websites using the Chrome browser if there is any chance that the user’s computers can be accessed by others. Furthermore, because the information is cached in the program without any encryption or any other security measures, any trojan horse or similar malware on a user’s computer could potentially access this information and forward it on to identity thieves.

While this clearly has serious potential repercussions for individuals using Chrome, the situation is even more serious for businesses, who could, as a result, be out of compliance with PCI-DSS security rules which are usually mandated by credit card processing companies, if the business wants to be able to accept payments by credit card.

As such, individuals and businesses alike need to take this vulnerability very seriously.