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ON THE SOFTWARE PATENTING CONTROVERSY 789

possibility for patents related to software, so long court’s ruling was considered by many the last nail
as they were parts of otherwise patentable inven- in the coffin of software patents.
tions or processes. In that case, the Court ordered The machine-or-transformation test, according
the USPTO to grant a patent to a method for cur- to Stefania Fusco, is defined as follows:
ing rubber, in which the only use of software was to In United States patent law, the machine-or-trans-
time the heating process. As a result, many software formation test is a test of patent eligibility under
programs have since been granted patent protec- which a claim to a process qualifies to be consid-
tion, including the RSA public-key cryptography ered for patenting if it 1) is implemented with a
algorithm in 1983, the Lempel-Ziv-Welch data com- particular machine, that is, one specifically devised
pression algorithm in 1985, and Karmarkar’s linear and adapted to carry out the process in a way that
programming algorithm in 1988. In turn, a number is not concededly conventional and is not trivial;
of individuals (some of them prominent scientists) or else 2) transforms an article from one thing or
and organizations launched their advocacy against state to another. (2)
software patents.
In 1998, the U.S. Court of Appeals for the Federal However, in 2010, the U.S. Supreme Court, in the
Circuit in the case State Street Bank and Trust Co. case of Bilski v. Kappos, partially reversed the Federal
v. Signature Financial Group ruled that if software Circuit’s decision and rejected the machine-or-trans-
yielded “a useful, concrete, and tangible result,” then formation test as the sole criterion of patentability.
it should be considered patentable. This ruling greatly Although the Supreme Court still ruled against the
facilitated patenting of computer software. But, at granting of a patent for the said invention, the deci-
the same time, it invigorated those opposed to the sion was not against the general patentability of any
idea. The emergence and proliferation of so-called algorithm or a business process that failed the said
“patent trolls”— usually, law firms that specialized in test but was based instead on the fact that a pat-
buying a wide variety of patents solely for the pur- ent for the invention in question would preempt an
pose of subsequently suing manufacturers for patent abstract idea (this phrasing is a standard criterion
infringements — also fueled growing discontent with of non-patentability of an invention). As a result of
the legal post-1998 status quo. these two rulings (in 2008 and 2010), the USPTO
The year 2007 marked the beginning of a rever- pursued a policy of refusing a patent to any com-
sal of the trend that made many software patents puter program (referred to as a “method”) that failed
possible. The U.S. Court of Appeals for the Federal the machine-or-transformation test “unless there is a
Circuit said in an opinion that if the invention con- clear indication that the method is not drawn to an
sisted of a process that was entirely mental, then it abstract idea.” This has been a more stringent crite-
was unpatentable even if it was augmented with a rion than the “useful, concrete, and tangible result”
modern electronic device such as a computer. In what test, thus making software patenting substantially
later became a highly-publicized case, a patent exam- more difficult than it was in the years 1998 to 2007.
iner rejected the patent application for an algorithm Nevertheless, the Supreme Court was careful to
that minimized risks in commodities trading “on the not comment on software patentability, solely point-
grounds that the invention is not implemented on a ing out the difficulties that the Information Age raises
specific apparatus, merely manipulates an abstract for the patent law. Wrote Justice Kennedy:
idea, and solves a purely mathematical problem.” It is important to emphasize that the Court today
That decision was challenged. In 2008, the U.S. Court is not commenting on the patentability of any
of Appeals for the Federal Circuit in the case In re particular invention, let alone holding that any
Bilski (the source of the previous quote) upheld that of the above-mentioned technologies from the
rejection, based on the so-called machine-or-trans- Information Age should or should not receive pat-
formation test for patentability, which, in the Court’s ent protection. […] [T]he patent law faces a great
opinion, the algorithm did not pass. Since most com- challenge in striking the balance between protect-
puter programs were likely to fail that test too, the ing inventors and not granting monopolies over