I recently a story about software patents so goofy (to me, anyhow — YMMV) that I had to share it.The story was from the IT Examiner, titled, “US throws out most software patents.”

The hook was a decision by the US Court of Appeals for the Federal Circuit in Washington DC. Instead of automatically granting a patent for a business practice, the court decided there would be a specific testing procedure to determine how patentable is the process in question.

As the story put it, this is “a nearly complete reversal” of a judgment of 1998, which started the stampede for patenting business practices.
All I can say is, About damn time! Here’s the link to my extremely cranky New York Times column on this very same subject, written in 1999.

So here’s the goofy bit: The reporter wrote,

The decision is great for open source advocates. But it could mean a permanent change in the value of intangible assets, which comprise approximately 70 per cent of the average high-tech company’s market capitalisation. With the world’s economy sliding downhill at an increasing pace each day, this decision could cost US companies billions of dollars.

Oh, please. First of all, patents comprise only a fraction of that “70 percent” value for intangibles, and business practice patents are only a fraction of those.

And second, those patents should never have been granted in the first place, and everybody knew it. During the dot-boom before the dot-bomb, anybody could do pretty much anything they wanted for the ka-ching, and that was one of the most ridiculous of them.

But I’ll give the reporter credit. Even if the patent/intangible thing was a little off, he found a nameless Silicon Valley executive who saw “a silver lining” to the decision: Companies will save a lot of money on legal fees (I’d say legal departments) by not needing to ceaselessly file, license and defend patents so basic that the bureaucracy to maintain them equals or exceeds the money they bring in the door.

Patents are gumming up the works in more places than the software industry, and I’ll be writing more about this in the next few weeks, in the context of biomedical and environmental research in particular. In the meantime, I wouldn’t worry too much about the software industry in this regard. Some companies will probably even find some upside in all the downturn.