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Copyright Uncategorized

Supreme Court Says Aereo has to Play by the Rules

Today in American Broadcasting Companies, Inc. v. Aereo, Inc. the Court held that Aereo’s television service, which re-transmits over-the-air TV signals to subscribers does indeed transmit performances to the public within the meaning of the Copyright Act.

Aereo tried to engineer its system around the law by using individual micro-antennas assigned to each subscriber. An appellate judge below described this system as a “Rube Goldberg-like contrivance.” Aereo’s system was a case of legal engineering rather than technical innovation, as it was hard to see any purpose for its design beyond exploiting perceived loopholes in the law.

The Court today chose to look to the clear result and commercial purpose of Aereo’s system, rather than the superficial appearances created by Aereo’s technical design. In doing so, it returns to Congress’s intent under the 1976 Copyright Act to define the rights of copyright owners in a technologically neutral way.

Contrary to critics, it is important to note that this decision does not make Aereo or its technology, illegal. Instead, it simply confirms that copyright owners and broadcasters continue to have the right to decide how their property is used and sold by commercial resellers. In other words. Aereo must play by the rules just like everybody else does — cable systems, Netflix, and broadcasters themselves. Among other things, they need to pay in the first place for what they are re-selling to consumers.

Despite what some are saying, this decision is a boon, not a threat, to innovation. Studios and TV networks are investing hundreds of millions of dollars into new business models and are licensing their creative works to dozens of new entrants. They can now continue to make these innovative investments with greater certainty that they wont be undermined by overly-technical interpretations of their rights.

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High Tech Industry Innovation Intellectual Property Theory Internet Inventors Patent Law Patent Theory Patentability Requirements Software Patent Supreme Court Uncategorized

Alice Gets the Most Important Question Right

By far the most important takeaway from today’s Supreme Court decision in Alice Corp. v. CLS Bank  is the Court’s acknowledgment that “many computer-implemented claims are formally addressed to patent-eligible subject matter.”  Despite failing to alleviate the profound confusion caused by its recent §101 analysis in cases like Bilski, Myriad, Mayo, and plenty of earlier cases going all the way back to Benson, the Court once and for all put to rest the absurd notion that computer-implemented inventions are not patentable under §101.

To its credit, the Alice Court issued its opinion without once using the term “software patent,” or even the term “software.”  Many people don’t realize that this is not a term of art in patent law.  There is no category of “software patents” at the PTO, although they do have classifications for every type of invention.  The term is also not an official category in any statutes or court decisions.  Instead, “software patent” is merely a pejorative, rhetorical term used by patent-skeptics in the patent policy debate.  One hears endless arguments about “all those crappy software patents,” or how we need to “fix the software patent problem,” as if there is something deeply wrong with providing patent protection for inventions implemented through software.  But from an inventive or technological standpoint, the notion of creating a separate category of “software patents” doesn’t even make sense. Any process that is implemented through software could also be implemented through hardware (as pointed out succinctly in the IEEE’s amicus brief in Alice), and the efficiencies and design decisions that guide the choice between hardware and software are essentially irrelevant to the core patentability requirements under the Patent Act.

Of course, the Alice Court’s decision still leaves inventors (not to mention patent examiners, lawyers, and judges) with shockingly little guidance for determining whether a claim is “directed to a patent-ineligible concept,” such as an “abstract idea,” and if so, whether it “contains an ‘inventive’ concept sufficient to ‘transform’ the claimed abstract idea into  a patent-eligible application.”  Citing Mayo, the Court again acknowledges that, when broken down into their basic elements, all inventions rely upon abstract ideas, natural phenomena, or laws of nature.  If that’s the case, we might ask why the Court added any of these exceptions into its §101 analysis in the first place.  After all, the Court’s “inventive concept” test for saving claims that are directed at abstract ideas really just looks like a hybrid novelty/non-obviousness determination.

Despite the remaining doctrinal confusion about how to apply the Court’s various pronouncements about which inventions are “abstract ideas” or “laws of nature” and which are not, the Court deserves credit for getting the most important question right.  At long last, it laid to rest the ridiculous argument that software isn’t patentable.  Are claims to computer-implemented inventions patent-eligible subject matter?  Of course they are.  Inventors in the high-tech industry can at least breathe a sigh of relief.  The Court has expressly recognized that the countless incredible technological inventions that form the bedrock of our innovation economy deserve patent protection.