Author Archive
Just Say No to Legislation by Treaty
I’ve written before about the growing problem of trade agreements being hijacked for the benefits of domestic special interest groups, especially the copyright lobby. Free trade is about making it easier for goods to flow across borders. In recent years, we’ve seen an increasing abuse of trade negotiators’ authority, as they’ve inserted provisions into trade agreements requiring the parties to enact extremely specific changes to their domestic copyright laws.
Copyright scholar William Patry raises the alarm about another attempt by the United States Trade Representative to skirt the domestic legislative process with a treaty called the Anti-Counterfeiting Trade Agreement. The details are secret, but it appears that the agreement will cover much more than trade and counterfeiting issues. Patry explains why we should be concerned:
USTR is in the driver’s seat in initiating and negotiating agreements that are cast as trade agreements, but which are in fact agreements fundamentally reshaping substantive IP law. No trade official in any country, no matter how well intentioned, should have that authority. In the U.S., the power to make copyright policy vests exclusively in the Congress. We do not want our trade representatives to negotiate on their own agreements that require changes in domestic copyright laws and then present the agreement after signature to the legislature as a fait d’accompli.
Use of the fait d’accompli is not limited to trade representatives, and is seen in other executive branch agencies. The DMCA is an example of an attempted fait d’accompli. Much to the chagrin of its proponents, the DMCA ended up being only passed after considerable hearings and congressional involvement, in large part due to the fact that the Administration, in that instance through the PTO, did not get everything it wanted from other countries in the 1996 WIPO treaties, and hence couldn’t completely rely on the fait d’accompli argument. Had it been able to do so the story would have been different, and that is what the ACTA process is intended to achieve, a result that legislatures will have to accept, unless they are willing to permit the country to be in conflict with an important trade agreement.
I couldn’t agree more. The issue here is not that the particular copyright provisions are bad policy, although I suspect they are. The issue is that the Constitution vests Congress, not the executive branch, with authority to make laws. Congress should jealously guard that authority. At a minimum, it should demand public disclosure of the terms of the treaty well before it’s signed, so that there’s time for Congressional hearings and democratic debate about its provisions. And Congress should send a clear signal that it won’t ratify a treaty that’s negotiated in secret and sprung on the Congress at the last minute. Mike Masnick is absolutely right that this issue should be getting a lot more attention from American media.
Patent Failure
This week I’m filling in for libertarian blogger Megan McArdle at the Atlantic. Yesterday I finished a three part discussion of Patent Failure, an excellent new book on the patent system by James Besson and Michael Meurer.
The use of the phrase “intellectual property” to describe patents and copyrights has become so commonplace that we barely give it a second thought. I think that’s unfortunate, because the question of whether patents can sensibly be considered a kind of property is an empirical question, not merely a matter of semantics or tradition.
In my first post, I discuss the key characteristics of a patents system — clear boundaries and positive incentives for innovation, and argue that the patent system tends to fulfill those characteristics with respect to the chemical and pharmaceutical industry. In my second post, I shift my attention to the rest of the patent system, and show evidence from Bessen and Meurer that the patent system seems to be creating dis-incentives for innovation in industries other than chemicals and pharmaceuticals. Finally, in my third post, I suggest that the problem is a lack of clear boundaries, and discuss some of the reform proposals Bessen and Meurer offer to fix the patent system’s problems.
The best thing about the book, from my perspective, is that it takes the idea of patents as property seriously and then tries to bring some empirical evidence to bear on whether the patent system behaves the way we expect a property rights system to behave. Because of the analytical clarity of their approach, it gives us a meaningful yardstick with which to judge potential reforms.
Why Is The ACLU Joining Media Ownership Hysteria?
Cato has long had a strong relationship with the ACLU, an organization that has been on the forefront of efforts to protect civil liberties and constitutional government. But every once in a while, the venerable public interest organization wanders off the reservation and takes a position that’s unrelated to—if not outright at odds with—civil liberties. We saw a good example of this last week when the group threw its weight behind efforts to repeal the FCC’s absurdly timid deregulation of media ownership rules.
The proposal would allow a newspaper in one of the 20 largest cities to purchase a TV or radio station—but not one of the metro area’s four largest TV stations. None of the FCC’s other media ownership rules would be changed. In other words, a newspaper would be allowed to buy an also-ran TV station in a cacophonous media market like New York or LA, but the vast majority of cities would see no changes at all.
Yet even that is too much for the ACLU, which issued a press release condemning the changes and urging Congress to roll them back. Unfortunately, the ACLU doesn’t appear to have done its homework, claiming that “Six major companies control most of the media in the country, including the most popular sites on the Internet.” Over at Techdirt, I point out how silly this is:
There’s just no way you can argue that these six companies own “the most popular sites on the Internet.” According to Alexa, most of the top 10 sites are owned by Google, Yahoo, and Microsoft, all independent companies. Only MySpace, recently acquired by News Corp., is in the top 10. But maybe she meant the top 10 media companies? Well, a good source for the sites most discussed in the blogosphere is the Memeorandum Leaderboard. Three of the top 10 are controlled by the “Big Six”: CNN at #3, the Wall Street Journal at #9 and MSNBC at #10. Four others — the Associated Press, New York Times, the Washington Post, and the Atlantic, — are mainstream media outlets not controlled by the “Big Six.” The final three slots are held by the Huffington Post and the Politico (twice), pure Internet publications not owned by the “Big Six.”
Indeed, the whole idea that “six major companies” are gaining monopolistic control over the media marketplace doesn’t make sense. There are, in fact, a ton of independent media companies. In addition to the New York Times and Washington Post companies, there are other big, independent newspaper chains like the Tribune Company (owner of the LA Times and Chicago Tribune) and Gannett (owner of USA Today and numerous other papers). There are foreign outlets like the BBC and the Guardian. There are magazine publishers like Conde Nast, book publishers like Pearson, and music publishers like EMI. The “Big Six” own a lot of media outlets, to be sure, but it’s a big world, and there is no shortage of prominent media outlets that aren’t controlled by these major players. And as media critic Ben Compaine has documented, the media marketplace has barely gotten more concentrated at all in the last couple of decades. For example, between the mid-1980s and the late 1990s, the market share of the top ten media companies increased from 38 percent to just 41 percent. More importantly, there’s been a lot of turnover. The list of top media companies in 1988 would look very different from today’s top ten list. In short, there’s no real problem here.
The ACLU is a key ally in the fight to hold the Bush administration accountable for trampling civil liberties and the rule of law. Given the enormity of that fight, it’s troubling to see them divert scarce resources away from civil liberties—supposedly their raison d’être—to advocate more government regulation of private media outlets.
The Perverse Incentives of Eminent Domain
Over at the Show-Me Institute’s blog, my former colleague Dave Stokes notices a great example of the kind of damage eminent domain has done to our economy:
Kevin Minden studied a map of the future Mississippi River bridge, looking for clues as to how it might affect his engine rebuilding shop.
One of the connector ramps will run a few blocks from his building, which has him concerned that the bridge might lead to a development boom. Minden fears losing his land to a developer.
“Everything in that area is old,” Minden said. “What are they wanting people to see when they drive across?”
Of course in a rational world, business owners would welcome a development boom because it would mean more business and higher property values. But under the eminent domain laws currently in force in Missouri, re-development is a threat to existing business owners, especially smaller ones, who are likely to be pushed out of the way to make room for new shopping malls, big-box retail stores, and the like. It’s a serious problem. I documented Missouri’s flawed eminent domain laws in a study for the Show-Me Institute last year, but the problem certainly isn’t limited to the Show-Me state. In last year’s eminent domain report card from the Institute for Justice, only five states had done the kind of comprehensive reform necessary to earn an “A” grade, while almost half of states—Missouri included—received a “D” or “F” grade, suggesting that they have done little or nothing to strengthen property rights. Further reforms are needed to ensure that property owners in all 50 states can be secure in the knowledge that they won’t be shoved aside for the benefit of another private party.
The Onion Couldn’t Have Topped This: Arlen Specter’s Spying Scandal
Wired‘s Threat Level blog has a great post about Arlen Specter’s effort to get to the bottom of a recent spying scandal. Not, mind you, the Bush administration’s various warantless wiretapping programs, but rather spying among football coaches in the NFL:
Apparently real-world warrantless spying isn’t as egregious as snooping on opposing NFL coaches.
Specter and other lawmakers initially talked tough when The New York Times disclosed Bush’s spying program in 2005. “There is no doubt that this is inappropriate,” Specter said at the time.
But Congress, including Specter, eventually passed the Protect America Act, which allowed government officials to eavesdrop in the United States on telephone conversations and e-mails without warrants, if the target of the surveillance is “reasonably believed” to be overseas.
And now, with the warrantless wiretapping issue still simmering, Specter believes that the most pressing spying issue in the country involves coaches taping each others’ hand signals.
Reining In Abstract Patents
Over at Ars Technica, I’ve got an in-depth discussion of In Re Bilski, an important case that was argued before the U.S. Court of Appeals for the Federal Circuit last week. The Federal Circuit has jurisdiction over most patent appeals and, until recently, their decisions were rarely reviewed by the Supreme Court, making them effectively the final authority on patent issues. And unfortunately, they’ve made quite a mess of things, departing dramatically from Supreme Court patents and allowing patents on broad, abstract concepts (including software, which I wrote about last year). The result has been an explosion of low-quality patents and frivolous litigation:
Amazon’s much-derided one-click patent was approved the year after the decision. Patent litigation in the software industry has exploded with firms facing lawsuits over patents covering extremely broad software concepts such as wireless e-mail, web embedding, and converting IP addresses to phone numbers. Technically, these patents cover general purpose computers executing the algorithms described in the patent rather than the algorithms themselves. But because no one executes such algorithms with pen and paper, the net result has been to give the patent holders effective monopolies on the algorithms themselves.
The Federal Circuit has been catching a lot of flack for its patent jurisprudence in recent years, and they’ve showed an increased interest in revisiting past precedents. As I discussed in a Cato podcast last week, In Re Bilski concerns a patent that was rejected by the USPTO for being too abstract. In its call for amicus briefs in the case, the Federal Circuit explicitly asked for opinions on whether it should revisit its key rulings on abstract patents from the 1990s.
Unfortunately, the oral arguments suggest that the Federal Circuit is unlikely to abandon its dubious experiment with allowing patents on software and other abstract concepts. At best, I think we can expect the court to tinker at the edges, restricting the most egregiously abstract patents.
I’m more optimistic about the Supreme Court, which has shown a renewed interest in patent law in recent years and has shown no compunctions about overturning the Federal Circuit’s patent decisions. At least three Supreme Court justices (Scalia, Breyer, and Stevens) have raised questions about the patentability of software, suggesting that there may be some skepticism from the Supremes on this issue. If the case gets appealed to the Supreme Court, it will be another opportunity to correct a Federal Circuit that has not done a good job of respecting Supreme Court patent precedents.
XM-Sirius Rent-Seeking
The FCC’s review of the XM-Sirius merger is a perfect example of the type of quagmire that’s inevitably created when a government agency is given broad, discretionary authority over private businesses. Various special interest groups have proposed that the merger be subjected to a laundry list of requirements. Lefty groups want an open device mandate. A rent-seeker entrepreneur named Chester C. Davenport wants the merged entity to set aside 20 percent of its spectrum for minority-controlled broadcasting. There are a variety of other proposals to require the firm to lease spectrum to unaffiliated entities. Clear Channel is demanding that it be subjected to the same “indecency” regulations that now plague terrestrial radio.
There are good arguments against each of these proposals, and there are some plausible arguments for some of them as well. But what I find most problematic about the situation is the way the proposals are handled. We have a constitutional system of government in which Congress is supposedly in charge of writing laws, the executive branch is in charge of executing them, and the courts are in charge of interpreting them. This ensures that laws are written by the most politically-engaged branch—Congress—and interpreted by the most impartial branch—the courts.
But in this case, as in many others, Congress has effectively given the FCC its blessing to wear all three hats. It can dream up new “conditions” (read: regulations) for the merger focusing on virtually any subject that strikes its fancy. The conditions are specific to one company, so there’s ample scope for favoritism and arbitrary decision-making. And once the conditions have been announced, and XM-Sirius have been blackmailed into “accepting” them, the FCC effectively wears executive and judicial hats as well. Yes, supplicants before the FCC can and do appeal decisions to federal courts, and the FCC is sometimes overruled. But the courts tend to give the FCC relatively wide deference in its policy decisions, and firms that practice regularly before the FCC may be reluctant to too aggressively defend their prerogatives in the courts for fear of souring their relationship with the FCC going forward.
The fundamental problem (aside from the courts’ failure to require that lawmaking powers be limited to Congress as required by the Constitution) is the FCC’s baroque process for apportioning spectrum. The right way to handle it would be for XM, Sirius, and every other broadcaster to have a property right in the spectrum they use, which would entitle them to do as they please with that spectrum (as long as it didn’t interfere with other broadcasters) or to lease or sell the spectrum to anyone else. In a world with genuine property rights, spectrum would find its way to owner with the highest-valued use, and anyone who wanted to enter a market like satellite radio would be able to do so simply be purchasing spectrum rights in the appropriate bands. The FCC’s role would be limited to keeping track of who held which license and verifying that spectrum uses did not create interference with one another.
My suspicion is that in such a world, satellite radio would prove economically infeasible because the spectrum would be more valuable in other uses. But I don’t know, and the FCC’s soviet-style spectrum allocation process is certainly not a good way to figure it out. The FCC should approve the XM-Sirius merger without conditions. But the more important lesson is that, Congress should be moving toward genuine property rights in spectrum, so that the 21st-century wireless market ceases to be micro-managed by an anachronistic 20th-century bureaucracy.
Once we have a real market for spectrum, Congress may choose to enact general regulations governing the use of that spectrum. But the current system, in which the FCC has the arbitrary power to single out individual companies for arbitrary restrictions on virtually any subject the FCC’s commissioners happen to be concerned with, is deeply flawed. It’s not fair to companies that have the misfortune of attracting the FCC’s scrutiny, and it’s not good for consumers, who are deprived of the benefits of a robust and competitive market for spectrum.
An Elephant Never Forgets?
Over at Ars Technica, I’ve got an in-depth write-up of the White House’s problems with email archiving. Federal law has required executive branch officers’ official emails to be preserved for legal and historical purposes. Unfortunately, the Bush administration has had some difficulties with this:
In 1994, the Clinton administration reacted to the previous year’s court decision by rolling out an automated e-mail-archiving system to work with the Lotus-Notes-based e-mail software that was in use at the time. The system automatically categorized e-mails based on the requirements of the FRA and PRA, and it included safeguards to ensure that e-mails were not deliberately or unintentionally altered or deleted.
When the Bush administration took office, it decided to replace the Lotus Notes-based e-mail system used under the Clinton Administration with Microsoft Outlook and Exchange. The transition broke compatibility with the old archiving system, and the White House IT shop did not immediately have a new one to put in its place.
Instead, the White House has instituted a comically primitive system called “journaling,” in which (to quote from a recent Congressional report) “a White House staffer or contractor would collect from a ‘journal’ e-mail folder in the Microsoft Exchange system copies of e-mails sent and received by White House employees.” These would be manually named and saved as “.pst” files on White House servers.
As you can imagine hijinks ensue. The White House developed a new archiving system that was ready to go in 2006, but the White House CIO reportedly canceled the system just before it was due to go live. They’re supposedly working on yet another archiving system, but it’s looking increasingly likely that it won’t be ready before the Bush administration leaves office.
Transparency is an important tool for limited government. Senior administration officials are more likely to behave themselves if they know their correspondence is subject to subpoena and will be available for the scrutiny of future historians. It’s therefore troubling that for most of the last 8 years, the Bush administration has failed to have an automated system in place for complying with the law as his predecessor did. More pressure needs to be placed on the next administration to ensure that the law is followed.
Robert Frank Inadvertently Makes the Case for School Choice
Matt Yglesias points to an article in Sunday’s Washington Post by economist Robert Frank that makes a strong case for school choice. Well, OK, he doesn’t explicitly talk about school choice, but he certainly does a good job explaining the problems caused by the absence of choice:
In the 1950s, as now, families tried to buy houses in the best school districts they could afford. But strict credit limits held the bidding in check. Lenders typically required down payments of 20 percent or more and would not issue loans for more than three times a borrower’s annual income.
In a well-intentioned but ultimately misguided move to help more families enter the housing market, borrowing restrictions were relaxed during the intervening decades. Down payment requirements fell steadily, and in recent years, many houses were bought with no money down. Adjustable-rate mortgages and balloon payments further boosted families’ ability to bid for housing.
The result was a painful dilemma for any family determined not to borrow beyond its means. No one would fault a middle-income family for aspiring to send its children to schools of at least average quality. (How could a family aspire to less?) But if a family stood by while others exploited more liberal credit terms, it would consign its children to below-average schools. Even financially conservative families might have reluctantly concluded that their best option was to borrow up.
This is an eloquent indictment of our perverse system of linking schools to real estate. We don’t generally limit access to hospitals, libraries, or colleges by geography, and there’s no good reason children’s schools should be determined that way either. People should be able to live wherever they want, and then they should be free to send their children to any school that meets their needs. There are a variety of ways to allocate space in the most sought-after schools—academic merit, aptitude in the school’s area of focus, demographic diversity, or by lottery—that would be more reasonable than our current policy of arbitrary geographic boundaries.
And yes, some schools would choose students based on their ability to pay. What Frank’s article nicely illustrates is that our current system of geographically-based school assignment already segregates children by their parents’ income, it just does so in an unnecessarily cumbersome manner. If we had a free market in education, parents who wanted to invest in sending their children to a better school would be able to do so directly, instead of having to buy more house than they might want just so they can get a spot at a better school.
The most important thing to note, though, is that the scarcity of good schools Frank identifies is not an inherent fact about the universe, but a consequence of the public school monopoly. In a competitive education market, a shortage of good schools in a given area would spur people to either start new schools or expand the best of the existing ones. But the public school system has few mechanisms for doing either of those things (charter schools are a very limited mechanism for starting innovative public schools). Which means that the supply of good public schools is artificially limited, leading parents to bid up their price. The way to alleviate the shortage of good schools is not to re-regulate the mortgage market, but to reform the education system so that it’s easier to start and expand high-quality schools. Few things would do that as effectively as a robust program of school choice.
Howley on E-Verify
Kerry Howley has a great article on the supposedly common-sense proposal to create a massive federal database of eligible workers as a disincentive to illegal immigration:
While undocumented workers probably contribute more in federal taxes than they consume in federal services, no one doubts that they pose some fiscal burden to border communities where they arrive. Still, you’d have to take an improbably extreme view of these costs to deem the SAVE Act fiscally rational. According to the Congressional Budget Office (pdf), the act would decrease federal revenues by $17.3 billion between 2009 and 2018 as formerly tax-paying workers go underground. The costs of expanding E-verify and a bunch of other goodies stuffed into SAVE (thousands more border agents, a program to recruit former members of the armed forces to join the border patrol, more SUVs and unmanned aerial vehicles, hundreds of full time immigration investigators, expanded immigration detention centers) come to $23.4 billion in discretionary spending during the same period. And that doesn’t touch the cost to individual employers, who are being slapped with a huge regulatory burden in the midst of impending recession.
No presidential candidate has come out in favor of Schuler’s bill, most likely because the bill includes no avenue for undocumented workers who wish to become legal. Herein lies the ambitious stupidity of SAVE: If the bill works as intended, it will instantly turn the population of 12 million undocumented workers with no way of becoming legal into 12 million unemployed undocumented workers with no way of becoming legal. For a political constituency constantly worried about “anarchy,” this does not appear to be an ideal situation.
The SAVE Act may or may not come to a vote this session, but employment verification will almost certainly be a part of future compromise legislation on immigration reform. That’s worrying. Walls offend us aesthetically and symbolically; they’re clumsy and primitive and cruel. But they’re also easy to tear down; far easier than a slowly metastasizing system of total employment surveillance, of growing databases and expanding bureaucracies.
Our own Jim Harper has justifiably called the e-verify program Franz Kafka’s solution to illegal immigration. According to the Social Security Administration’s own estimates, almost 18 million Social Security records contain errors, many of them pertaining to US citizens. If even a small fraction of those problems find their way into the e-verify program, we’d be looking at millions of American citizens suddenly forced to “prove” to federal bureaucrats that they’re “eligible” to have a job. Giving the federal government the power to decide which US citizens are allowed to work for a living seems to me like a much bigger threat to our freedoms than anything illegal immigrants have done.
Microsoft Volunteers to Be the Poster Child for DMCA Reform
One of the big challenges of writing about tech policy is the difficulty of explaining the subjects I write about for a general audience. This was a particular challenge a couple of years ago when I wrote a Cato Policy Analysis about the anti-circumvention provisions of the Digital Millennium Copyright Act—just typing that out is a chore. I wish I could have pointed to this story as an example, because it brilliantly illustrates my argument.
A few years back, Microsoft developed a copy-protection scheme called PlaysForSure (it will become clear shortly how ironic that name was) that was supposed to prevent music customers from engaging in Internet piracy with music they bought from online music stores. Microsoft licensed the format to a variety of different companies and aggressively promoted it as an alternative to Apple’s iTunes-iPod ecosystem. Unfortunately, Microsoft failed to close the gap with Apple, so in 2006 Microsoft unveiled a new product line called Zune, effectively discontinuing development of PlaysForSure. Zunes are incompatible with PlaysForSure music. If you built up a music library in the PlaysForSure format, it would, um, not play for sure (or at all) on a Zune music player.
Up to this point this is just an ordinary business story, and nothing for libertarians to be concerned about. Companies drop old product lines all the time, and sometimes that means customers are stuck with compatibility headaches. But there’s just one problem: not only will Microsoft not help you play your PlaysForSure music on a Zune, but it’s illegal under the DMCA for anyone else to develop software to convert PlaysForSure music to a format that could play on Zunes, iPods, or any other format. Such software would be considered a “circumvention device”—ostensibly a piracy tool—and could bring civil and criminal penalties. If you were stupid enough to buy music in PlaysForSure format, you’re stuck with the dwindling number of PlaysForSure-compatible music programs still left on the market. You can burn your music to CDs, and then re-rip them to an open format, but this is a time-consuming process if you have a large music library, and it will lead to some degradation in the quality of the music.
As if all that weren’t enough, Microsoft yesterday announced the next step in its campaign to make the DMCA look ridiculous: this fall, it will be switching off the license servers that allow customers to “authorize” new computers and operating systems to play music from customers that bought music from its now-defunct MSN Music store. This means that if you have a library of music from the MSN Music store, and you buy a new computer or upgrade your operating system, there will be no legal way to take your music library with you.
If Congress hadn’t enacted the DMCA, this wouldn’t be a big deal. Third parties could develop software utilities that would automatically convert peoples’ PlaysForSure-formatted music collections into an open format like MP3, which would allow it be played on almost any computer or music player. Customers wouldn’t have to worry about whether their computer had been “authorized,” or whether the company they’d purchased the music from was running the necessary “license server.”
The most frustrating thing about this is that forcing consumers to jump through these hoops hasn’t made a dent in illicit file sharing. To this day, the music industry sells most of its music in the copy-protection-free CD format. Anyone can buy a CD, rip it to MP3 format, and upload it to the Internet. And music downloaded from peer-to-peer networks comes free of copy protection. Which means that the hassles imposed on consumers by the DMCA and copy protection formats like PlaysForSure haven’t slowed down piracy at all. All they’ve done is created unnecessary headaches for customers who were foolish enough to obey the law and pay for the music they downloaded.
Abstract Ideas Can’t Be Patented. Or Can They?
The Supreme Court has long held that laws of nature, physical phenomena, and abstract ideas are not eligible for patent protection. Because these things are discovered rather than invented, they are “free to all men and reserved exclusively to none.” In recent years, however, the United States Court of Appeals for the Federal Circuit, which hears most patent appeals, has begun to relax the restriction on such patents. I’ve written before about the problems created by software patents. Software is is ultimately just a sequence of mathematical formulas, and in their pure form they’re not patentable. But in a series of decisions in the 1990s, the Federal Circuit opened the door to patents that cover software when it’s loaded onto a computer, which of course is the only useful thing to do with software. Since then, we’ve seen an avalanche of patents on software, which have started creating serious problems for innovators in the software industry.
The latest example of the problems on patenting abstract concepts comes via Mike Masnick of Techdirt: a company had some problems with a satellite launch, and wanted to use a maneuver called a Lunar flyby to correct it. Unfortunately, Boeing holds a patent covering the maneuver they wanted to use, and they have been unable to negotiate a license of that patent. So they’re planning to let the satellite go down in flames and try to collect the insurance money on it.
Now, as Mike points out, the maneuver in question is just an application of basic physics to spaceflight. The basic principles have been understood since Newton, and NASA has been computing these kinds of orbital trajectories since the 1960s. The patent office should have rejected the patent for trying to patent a straightforward application of basic physics. Unfortunately, thanks to the Federal Circuit’s increasingly permissive standards for patentable subject matter, Boeing was granted the patent, and this company now faces the unappetizing choice of leaving the satellite in the wrong orbit or getting embroiled in litigation with Boeing.
Crucially, the Supreme Court has never endorsed the Federal Circuit’s experiment with allowing patents on abstract ideas, and several justices have voiced concerns about the direction the Federal Circuit has taken the rules for patentability. Apparently, the widespread outrage over the abuse of such patents has gotten the Federal Circuit’s attention, as it has decided to re-hear a case called In Re Bilski that could give it an opportunity to tighten up the rules for patenting abstract concepts. Several public interest groups have filed briefs in the case urging the court to do just that.
The Federal Circuit will be hearing the case en banc next month, and it has already become one of the most closely-watched cases on the Federal Circuit’s docket. Given the Supreme Court’s heightened interest in patent issues in recent years, it’s not hard to imagine the Supreme Court deciding to review the decision as well. Given that Congress has so far ducked the issue of reining in patents on abstract concepts in its pending patent reform legislation, In Re Bilski may be our best chance of reform.
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