Microsoft Loses One Patent Battle - But Another A Bigger Worry

Most people who might look at this blog have probably already read of Microsoft's loss in the Alcatel-Lucent patent suit. But what I stumbled across via Slashdot is a bigger worry - not just for Microsoft, but all companies interested in patenting software, which could mean virtually any business making anything. BetaNews reports that the U.S. Supreme Court has just taken up debate on whether software itself can be patented. Holy Do Loop, Batman - this is enormous. Yes, the majority of the court seems pro business, but when you have businesses on both sides, which way will it go? In fact, it was Microsoft itself that was arguing that no one could patent software.

It's an itneresting argument. Microsoft is pretty smart when it comes to intellectual property, as I wrote about in Chief Executive a couple of years ago. But isn't this shooting itself in the foot? Not necessarily. Code still enjoys copyright, so deriving anything from reverse engineered object code could be argued to be a derivative use. And the company has so much R&D going on that it's pace of development might be enough to push off many competitors. Who might have to worry? Those outsourcing code. Suddenly all those non-competes and turning over the intellectual property means the copyrights - not the methods themselves. A lot of companies could find that they've outsources their way into funding entities that could then use the essential work and sell it to competitors.