Bilski and the US Software Patent Threat

On 28 June 2010 the Supreme Court of the United States issued its opinion on the eagerly awaited Bilski v. Kappos1 case concerning patentable subject matter. While the focus of the opinion is on financial services, and in particular the degree to which financial services can be protected by patents, it speaks to the test involved with software patents more broadly within the United States. The US has two unique qualities in IP and technology law: it's both a large and thus important market for technology businesses and it's litigious. This intersection means that US courts are often the first globally to develop the leading-edge legal issues in technology and the law. Software patents are no exception, with the US seemingly rushing into software patents full steam, only to have their patentability clawed back over the past few years through a series of decisions.Should we have patents on software-related inventions in the first place? It's a good question, especially in light of the purpose of patents – largely to encourage the disclosure of ideas and to encourage innovation – and the ability of patent offices and their examiners (or lack thereof) to keep up with the flood of filings and rapid pace of technology to issue only high-quality patents. But like them or not, whether they are a “feature” or a “bug,” software patents are here. In this article we leave to one side the policy issues and the normative “should” question of software patents (always a heated topic in the developer community): That's a question best left to legislators, judges, and another article.Instead, this article focusses on the impact the US decision in the Bilski case will have on UK software businesses. It may initially seem odd that such a US decision on a narrow question of patent law could have a significant impact in Britain, but as we'll see in the next sections we think there's a strategy and a risk to avoid in this area for UK businesses and their advisors.