If you recall, the Federal Circuit (a court that issues most key patent law rulings) released an important decision, In re Bilski, last October. Initially, many commentators erroneously opined that the decision invalidated software patents. It didn’t. While Bilski curtailed “pure” business method patents (e.g., a method for preparing a tax return), it had very little impact on the ability of an innovator to obtain a patent on software through a careful patent attorney. Indeed, I’ve even seen some office actions in which the examiner himself offered changes to claim language to make the software patent-oriented claim conform to Bilski.

Yesterday, the Supreme Court “granted cert.” This means the Supreme Court wants to review the decision, and it likely also means the Supreme Court was dissatisfied with Bilski.

Indeed, the Wall Street Journal Law Blog quoted Laurence Rogers, an E.E. patent lawyer at Ropes and Gray as saying, “The Supreme Court doesn’t get involved in patent cases unless it sees something it doesn’t like.”

In addition, Joe Mullin at The Prior Art quotes Mark Lemley—intellectual property law glitterati and Stanford law professor—as saying, “They either looked at the Bilski legal test and said it’s an unworkable test, or they looked at their own precedent and decided they didn’t like that.” Prof. Lemley goes on to say, “If you look at other Supreme Court patent cases in recent years, they show no compunction about overturning settled wisdom in the Federal Circuit and courts of appeals.”

Thus, I’m predicting that the Supreme’s Court’s willingness to hear Bilski may be just that—an indicator they’ll overturn it.

Oftentimes, the litigants will ask for a “special verdict.” This requires the jury to answer specific questions to determine exactly what their findings of fact were. That is to say, the jury doesn’t just say “you win” or “you lose,” they tell you why. I uploaded it for your review.

What I found particularly interesting is what the jury determined about the level of “ordinary skill in the art.” This was a factual determination they had to make to help determine whether the chain was legally obvious under 35 U.S.C. 103. The jury rejected either the plaintiff’s or defendant’s position on this point, and instead it looks like they took both! They said:

A minimum of three years of technical engineering experience in the design and use of of outdoor power equipment; or a technical education in mechanical engineering and one year of experience in the design of outdoor power equipment and use.

What you’ll likely find more interesting, however, is the bottom line. Notice the plaintiffs are recovering for both royalties and price erosion. Here it is:

All in all, it looks like the litigants had a thoughtful jury. Here’s the full form:
Blount Verdict Form

After almost a week of smoldering in the blogosphere, one controversial issue seems to be already resolved: this is not a Microsoft against Linux battle. As some of the commenters to TechFlash’s Todd Bishop’s post noted, and Matt Asay carefully analyzes, Linux is really not the issue in this litigation, despite some of the headlines and discussion. Microsoft’s Horacio Gutierrez said as much when he said, “This is just a normal course-of-business dispute between two companies.”

In addition to normal damages, Microsoft’s complaint alleges that the company is entitled to enhanced damages and attorney fees because, on June 13, 2008, it sent a notice to TomTom’s CTO, Peter-Frans Pauwels. A court can enhance damages (triple them) under the theory of willful infringement and 35 U.S.C. 284. These are punitive damages, so they are usually reserved for egregious conduct. Still, the court has fairly wide discretion to consider all the evidence. The letter may be one piece of such evidence.

The real purpose of the letter, however, may have been Microsoft’s failed attempt to strike a licensing deal. As TechFlash’s Todd Bishop noted, Microsoft has rarely had to resort to litigation to profit from its automotive patent portfolio. Moreover, despite the fact that Microsoft had to send it’s lawyers to federal court in Seattle, the outcome of the dispute may indeed be a licensing deal. After all, in the past few times that Microsoft has turned to the courts, the cases settled.

I’ll try to keep tabs on the case as it develops–if it does not settle first.

For your reference, Microsoft’s complaint alleges that TomTom is infringing eight patents. They are:

• 6,175,789 Beckert, “Vehicle computer system with open platform architecture”
• 7,054,745 Couckuyt, “Method and system for generating driving directions”
• 6,704,032 Falcon, “Methods and arrangements for interacting with controllable objects within a graphical user interface environment using various input mechanisms”
• 7,117,286 Falcon, “Portable computing device-integrated appliance”
• 6,202,008 Beckert, “Vehicle computer system with wireless internet connectivity”
• 5,579,517 Reynolds, “Common name space for long and short filenames”
• 5,758,352 Reynolds, “Common name space for long and short filenames”
• 6,256,642 Krueger, “Method and system for file system management using a flash-erasable”

The following is the full text of the complaint.

Microsoft v. TomTom Complaint