Software patents are a lusciously controversial item that many love, love to hate, or just hate. Today, the U.S. Supreme Court will hear a case involving the very core of what can or cannot be patented in terms of software. If it rules as it did in the 1970s, software patents as we know them – and many, many companies who rely on them heavily – will be dead in an instant.
Back in the early 1970s, IBM was arguing hotly against the idea of patenting software. Bill Gates, whose Microsoft was still just an idea, was also warning that patents on software would kill the industry before it even got started. Today, both IBM and Microsoft hold vast patent portfolios and spend millions every year defending them in court.
Software patents have been big business for a long time. Despite the Supreme Court’s ruling in 1972 that severely limited what software could be patented, subsequent lower court rulings destroyed those restrictions with new precedents. Of all the courts, the Supreme Court has the most power in reversing those precedents and changing the landscape of technology patents and business forever.
Like the original court case involving AT&T and IBM and the idea of patenting a sequence of mathematical steps to code a phone number, this current case in front of the Supreme Court involves a sequence of math that creates a buffer zone for financial transactions of a specific type. In the AT&T case, the SCOTUS ruled that logical steps in a sequence, even if performed electronically, were not patentable. In this current case, it’s possible they could do the same, killing software patents as we know them.
Whether or not that is a good thing depends on who you ask.