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Validity of Software Patents Goes on Trial at ­.s. Supreme Court

The U.S. Supreme Court will consider what types of inventions should be eligible for a patent as part of a case that could undermine legal protections for software. The question facing the Supreme Court is whether the "machine or transformation" test the Patent Office uses to determine if an application is patentable is the right standard. The Patent Office denied a patent request for a method of hedging weather-related risk in energy prices that can lock in prices during unusually cold weather. The patent applicants appealed the decision. A ruling in favor of the U.S. Patent Office could restrict patents on business methods and processes, such as online shopping techniques, medical diagnostic tests, and procedures for executing trades on Wall Street.

Analysts say the worst-case scenario for the technology industry would be if the ruling invalidated many existing software patents, or made them more difficult to defend in lawsuits. "Technology companies care about this case, because it will define what you can and cannot get a patent on," says the Business Software Alliance's Emery Simon.

James Carmichael, a former judge on the Patent Office board of appeals, says the software industry would lose a major incentive for innovation if the government stops issuing software patents. An unfavorable outcome could force companies to apply for patents using new strategies or rely more on copyright and trade secret protections.

From USA Today
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Abstracts Copyright © 2009 Information Inc., Bethesda, Maryland, USA


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