Mike Isaac

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Facebook, Google and Others Rally Against Sweeping Claims in Financial Patent Case

While the technology patent wars continue raging on across the industry, some companies are moving toward disarmament.

Facebook, Google, Zynga and a number of other tech giants filed an amicus brief with the United States Court of Appeals for the Federal circuit on Friday afternoon, an attempt to advocate against a number of wide-ranging patent claims in a case between two financial companies.

Haven’t brushed up on your Latin legal terminology lately? I’ll break it down for you.

Amicus curiae, literally translating to “friend of the court,” is an action made by a party not directly involved in litigation, but usually interested in or affected by the outcome of a given case. So essentially, Facebook, Google and pals want to step in and give their two cents, despite being neither defendants nor plaintiffs.

Here’s the issue: Electronic financial marketplace Alice Corp. filed for a patent a few years ago laying claim to a computerized way of closing financial transactions. There was back and forth, but in July it was decided that Alice Corp.’s claim was legitimately patent-eligible.

Problem for CLS — the plaintiff in the case — as well as the host of amici like Facebook and Google, is that Alice Corp.’s claims are quite broad. It asks to patent a “data processing system to enable the exchange of an obligation between parties.” So, uh, basically a computer.

As you perhaps know by now, tech companies absolutely hate sweeping claims such as Alice Corp.’s. By filing patents that use general, often vague terms to stake claim on particular methods of operation, it arms the claimant with a future-focused arsenal. In essence, there’s little keeping these patent holders from going after any companies it sees infringing upon their technology.

Quoth the amicus brief:

This issue is critically important in the high-tech context. Many computer-related patent claims just describe an abstract idea at a high level of generality and say to perform it on a computer or over the Internet.

Such barebones claims grant exclusive rights over the abstract idea itself, with no limit on how the idea is implemented. (Emphasis mine.)

Granting patent protection for such claims would impair, not promote, innovation by conferring exclusive rights on those who have not meaningfully innovated, and thereby penalizing those that do later innovate by blocking or taxing their applications of the abstract idea.

Other than duking it out in appellate court, most tech companies these days are insuring themselves by buying up patent troves from companies that may be going out of business (see the Nortel bidding war of the past, and the Kodak patent bidding to come). But if these tech giants can nip claims like these in the bud before they grow into a problem, it makes things much less complicated — and far less costly — down the line.

Filing amicus briefs is a fairly common practice in the tech industry. Google has been involved in many over the years, while Facebook, too, has been included in a handful.

And in this instance, there are quite a few amici involved. The Electronic Frontier Foundation filed its own amicus brief, and another joint brief came from a host of companies including LinkedIn, eHarmony, U.S. Airways and Travelocity Inc. So it’s safe to say that Alice’s claims are pretty reviled by many in the tech industry.

The full amicus brief is embedded below. Take a gander if you’re into the nitty-gritty of patent law.

Facebook Google Amicus Brief

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