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.

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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The Lavabit Shutdown and IT Security

How Lavabit Melted Down : The New Yorker.

The New Yorker has an excellent piece online which discusses in detail the events leading up to the shutdown of Lavabit, a secure e-mail provider which was used by Edward Snowden.

 

The article details the pressure placed upon Lavabit and its owner not just to turn over information that would shed light on Edward Snowden’s activities, but rather, information which would give the government wholesale access to all email passing through the services.

 

This article raises serious issues for IT companies who have committed to safeguard the privacy and/or security of its customers. It also raises serious concerns regarding the extent to which the U.S. Government is willing to (and in fact does) compromise the privacy of innocent U.S. citizens as a routine matter.

 

Fair use? US stamp featuring photo of monument nets sculptor $650,000: Digital Photography Review

Fair use? US stamp featuring photo of monument nets sculptor $650,000: Digital Photography Review.

In an interesting case involving a postage stamp depicting a photograph of the Korean War Veterans Memorial, the U.S. Postal Service has been found to have infringed upon the copyrights of the sculptor who created the Memorial. It appears that at the time the memorial was commissioned, that the government did not secure copyrights to the statute, which by default remained with the sculptor.

Subsequently the U.S.P.S. made use of a photograph of the memorial on a postage stamp. When sued by the sculptor for copyright infringement, the U.S.P.S. unsuccessfully argued that their use was “fair use”, and accepted defense to copyright infringement. Ultimately the federal court determined that the Postal Service’s use of the intellectual property did not fall within the definitions of fair use, and after much pushing and pulling byt he respective sides, the U.S. Court of Federal Claims as found that the U.S.P.S. owes the sculptor $684,844.94 in damages for its infringement of his copyrights.

This case highlights the complexity of the application of intellectual property law and the high stakes involved in failing to secure the appropriate rights to use intellectual property in a particular way.

How a Purse Snatching Led to the Legal Justification for NSA Domestic Spying | Threat Level | Wired.com

How a Purse Snatching Led to the Legal Justification for NSA Domestic Spying | Threat Level | Wired.com.

This is an absolutely fascinating look at how the law behind the NSA Domestic spying program originated and it clearly demonstrates the frightening power of the so-called “law of unintended consequences”.

Certainly the origin of the legal concepts at play here make it clear how ridiculous the extremes to which they are now being carried by the likes of the NSA truly are. I would call it “insanity” but sadly it is, arguably, the law.

Patent troll Lodsys demands $5,000 from Martha Stewart. That was a bad idea — Tech News and Analysis

Patent troll Lodsys demands $5,000 from Martha Stewart. That was a bad idea — Tech News and Analysis.

It appears that Martha is ready to throw down with notorious patent troll Lodsys. Martha Stewart Living Omnimedia has filed for declaratory judgment against the troll, seeking a ruling which not only finds MSLO’s electronic magazines to not infringe upon Lodsys’ patents, but that the patents themselves are invalid.

On hearing about this, I immediately thought of the line from the cult classic film “The Princess Bride”, in which the villain declares: “You just made the second classic blunder! This first, of course, is never become involved in a land war in Asia. But only slightly less well know: ‘Never go head to head with [Martha Stewart]…’ “

Medical records handed to pharmacies have no constitutionally protected privacy, says the DEA | The Verge

Medical records handed to pharmacies have no constitutionally protected privacy, says the DEA | The Verge.

It appears that the U.S. Drug Enforcement Agency is publicly taking the position that medical records provided to pharmacists are not private and can be obtained by the DEA without the need to show cause for the production of such records.

This position, while not specifically constituting new law, has also not received serious challenge in the Courts as of yet. Pending such a challenge the DEA continues to seek and obtain such medical records from pharmacies by way of subpoenas which require no advanced finding of probably cause.

It does appear, however, that the ACLU is preparing to step up to the plate to challenge this practice. How such a challenge shakes out in the end may have a profound impact on the privacy of individual’s medical records, unless Congress steps into the fray to either explicitly uphold the privacy of such medical records or to explicitly limit or eliminate any expectation of privacy in individual medical records.

Website “Terms of Service” Provisions Reigned In By Federal Courts

Zappos Terms Of Service Ruled Invalid – Business Insider.

As reported by Business Insider, a recently handed down decision in a case against Zappos stemming from January 2012 hack of Zappos customer databases now makes it clear that Courts taking much harder look at the enforceability of Terms of Service provisions posted by websites.

Specifically, the Court in the Zappos case found the mandatory arbitration provision contained in Zappos’ ToS to be unenforceable, at least in part because it did not require a user to review and explicitly accept the terms of the ToS. Zappos, like many websites these days, made use of a “browerwrap” ToS, which provide that a vistor of the site automatically accepts the terms of the agreement simply by using the site. The Court found that such a provision did not demonstrate a “meeting of the minds” between Zappos and users of its web site, and thus the ToS did not constitute an enforceable contract.

Ironically, a growing body of case law suggests that if Zappos were to have created a “click-wrap” agreement, that is one that required the user to scroll through the agreement and click a button specifically indicating agreement with the terms of the ToS, that the Court would have found the ToS to be enforceable.

The takeaway here for companies engaged in business on the web: courts are casting increasing scrutiny on the enforceability of Terms of Service agreements associated with such web-based commerce. Understanding what is enforceable and what is not may (and modifying ToS agreements where necessary) may be a key business decision, with costly repercussions if the agreements turns out to be unenforceable.

Have you reviewed your ToS lately? If not, now is the time!

Study: Trolls account for 40 percent of patent lawsuits — Tech News and Analysis

Study: Trolls account for 40 percent of patent lawsuits — Tech News and Analysis.

A recent article on GigaOm.com discusses a recent study which documents a significant spike in the number of patent suits being brought by NPEs (or “trolls” in common parlance), with such suits now making up nearly 40% of all patent litigation.

Even more disturbing is the fact that typical costs in patent litigation are now ranging from $650,000 to $5 Million (depending, largely, on the amounts of money at stake). This is a huge amount of money being tied up in IP fights that could otherwise be used in R&D or to otherwise drive innovation or fund job growth.

Of course, filed patent lawsuits are only the tip of the iceberg. This does not not include the impact of IP disputes which do not even reach the litigation stage involving threats, forced licensing deals, and disputes which settle on other bases before litigation.

Exclusive: Anatomy Of A Brokerage IT Meltdown – Security –

Exclusive: Anatomy Of A Brokerage IT Meltdown – Security –.
InformationWeek.com has an excellent article up which details the breakdowns in IT policy and procedure which lead the now-defunct stock brokerage, GunnAllen Financial, become the first company to be fined by the SEC for failing to protect customer data.

The article is a hair-raising read and the actions of both GunnAllen and its IT company, The Revere Group, would be almost comical if not for the incredibly serious implications of the cavalier way in which they dealt with sensitive client information.

While this instance is an extreme one, it is an object lesson for companies handling sensitive client information. The consequences of poor data management and data security are dire!