End Software Patents (ESP) Report: State of Software and Business Method Patents
U.S. Courts Question Patentability of Software
Boston, Mass., February 28, 2008 – End Software Patents, a project working toward the elimination of software patents, released its first yearly report on the state of software and business method patents today. The full report can be found at http://endsoftpatents.org/2008-state-of-softpatents. The findings include:
1) Software patent litigation costs US companies $11.2 billion annually.
2) Software patent infringement suits are increasingly targeted against non-software companies in the general economy, for example, companies who infringe software patents simply by having a website with certain configurations.
3) Recent rulings and statements by the U.S. Supreme Court and the U.S. Patent and Trademark Office (USPTO) support the position that software is not patentable. The Court of Appeals for the Federal Circuit (CAFC) announced last week they will reexamine the scope of what is patent-eligible.
Software patent infringement lawsuits are increasingly targeted against non-software companies in the general business sector. For example, a company named Global Patent Holdings, LLC is currently seeking settlements between $7 and $15 million from companies such as the Green Bay Packers, OfficeMax, Caterpillar, Kraft Foods, ADT Security Services, AutoNation, Tire Kingdom, and Boca Raton Resort and Club. In each case, the dispute is over the design of the company's website.
“We are all part of the information industry. Any company with a website or an in-house information technology department could face software patent infringement lawsuits,” said Ben Klemens, executive director of End Software Patents. “Software patents are harming U.S. business in general and creating a resource crisis at the U.S. Patent and Trademark Office.”
Recent statements from several courts reaffirm that not everything should be patentable, and provide new arguments and authority to those who face lawsuits based on software or business method patents. The USPTO’s internal administrative court recently stated that “There is no authority that we know of which permits software per se to be considered statutory [patentable subject matter].” Additionally, the CAFC attached to its announcement of the case of In re Bilski a statement that the case will be taken as an opportunity to revisit the question of what is patent-eligible, with strong indication that the ruling will reduce the current scope.
Given these developments, the ESP report concludes that next year will bring a number of rulings that will significantly affect the patentability of software, and the restoration of many important limits on what may be patented.
+++About End Software Patents
End Software Patents is a project formed to eliminate patents for software and other designs with no physically innovative step. It promotes a U.S. technology development environment which will drive innovation and growth in the global marketplace. End Software Patents has initial backing from the Free Software Foundation, the Public Patent Foundation, and the Software Freedom Law Center. For more information on participating in the project, or to access its knowledge base, please visit its website at http://endsoftpatents.org.
*UPDATED FEBRUARY 29, 2008: ESP had earlier used a rough figure of $11.4 billion, which we had widely reported to the press, based on a number of conservative but rough estimates of the costs of a patent suit. After receiving external feedback, we have chosen to switch to the figure here. We apologize for the inconvenience caused by this modification. For details, please reference section I.1 of the report.
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