The US Supreme Court may be about to rewrite some of the most fundamental rules of innovation in America, as it considers a handful of cases that could change the course of US intellectual property law and undermine the value of patents owned by domestic and foreign companies.
Congress has been struggling for months to write a new law that would reform the country?s patent system, which has been criticised for granting too many, often poor-quality, patents, and for encouraging ruinously costly litigation.
But legislative attempts at reform appear to have foundered, so attention has turned to the Supreme Court to create a better balance between competition and innovation.
The court has three cases before it and a fourth that could arrive soon, which test some of the most fundamental tenets of US patent jurisprudence. Which country?s courts should decide patent disputes that cross borders?
And even more fundamentally, What can be patented in the first place? How obvious must an invention be to forfeit patent protection? And should challengers in patent infringement suits ? even those who are not using the patent to produce anything ? be allowed to shut down defendants whose products depend on many patents?
The first case will be heard early next year. It involves a very basic question: what subjects can be patented? Laboratory Corp v Metabolite Laboratories involves a system for diagnosing a vitamin deficiency related to heart attacks. But it could affect cases well beyond diagnostic medicine.
?People are very alarmed at the potential of the court to upset the scope of eligible subject matter in areas well beyond diagnostics,? says Stephen Maebius, a patent expert at the law firm Foley & Lardner, noting that the case ?could water down the rights of patent owners?.
?This case could restrict the ability of inventors to protect software products or business methods,? says Charles Steenburg of the intellectual property law firm Wolf, Greenfield & Sacks.
But the justices may be reluctant to overturn the accepted notion that software and business methods are patentable, Mr Maebius points out. Much will depend on whether the court sticks to the facts of the case or decides the issue more broadly.
Next week the justices could also announce whether they will hear a case that could have even more profound implications for companies that rely on patents to make money. That case involves eBay, the online auction house, but the issues go beyond internet auctioneering.
If the court takes the case, it must decide whether US patent law requires courts to impose injunctions against businesses that violate patents ? often leading to a total shutdown in production ? or whether such injunctions are discretionary.
The pharmaceutical industry favours mandatory injunctions. But the US technology industry is hit hard by such moves, since many of its products rely on thousands of different technologies. Thus, imposing an injunction on any one technology could shut down production entirely.
EBay says the law gives courts broad discretion whether or not to stop production, but the federal patent court, the Court of Appeals for the Federal Circuit, has made imposition of injunctions mandatory. If it takes the case, the Supreme Court must decide whether the appeals court has given challengers too much power in the patent battle.
The justices have yet to decide whether to hear another important case involving the standard for ?obviousness? in granting patents. Microsoft and other high-technology companies have urged the court to take this case, arguing that the federal patent court allows too many obvious technologies to be patented ? such as the adjustable accelerator pedal at issue in KSR International v Teleflex, the case before them. Adopting a lax standard of obviousness means more patents are issued, and technology companies can be sued more often by holders of dubious patents, they say.
The most colourful case ? a long-running dispute involving the popular Blackberry communications device ? has yet to reach the court.
The stakes in RIM v NTPare high: the lower court could shut down the Blackberry service in the US unless there is a settlement. If it does reach the justices, the case could write the patent law of the globalist 21st century: since an essential part of Blackberry operations takes place in Canada, the case tests the extraterritorial jurisdiction of US courts.
Congress may get around to rewriting the patents laws in due course. But in the meantime, the justices appear poised for action.
Get alerts on US politics & policy when a new story is published