In 1998, the United States Court of Appeals for the Federal Circuit, in State Street Bank & Trust Co. v. Signature Financial Group, Inc., did away with what had previously been come to be known as the business method exception to patentability. The Federal Circuit, per Judge Giles Sutherland Rich (shown left), pointed out that the business method exception had never been invoked by either the Federal Circuit or its predecessor court, the CCPA. Judge Rich explained that “[s]ince the 1952 Patent Act, business methods have been, and should have been, subject to the same legal requirements for patentability as applied to any other process or method.”
Although the United States Supreme Court did away with that test when it issued its decision in Bilski v. Kappos, it is still nevertheless illustrative and the best test that is out there. Simply stated, in order to have a patentable business method, it is necessary for the invention to accomplish some practical application. In other words, in order for a business method to be patent eligible, it must produce a “useful, concrete and tangible result.” Judge Rich was correct to point this out and the Supreme Court has made a horrible mess of the law as it applies to business methods and computer-implemented innovations because it fails to understand what Judge Rich really meant.
If you really understand what Judge Rich meant by “useful, concrete and tangible result,” you come to the inescapable conclusion that it is the appropriate test. Indeed, those drafting patent application would do well to really target the description of the invention to satisfy the test.
Just over three years ago, the United States Supreme Court issued its decision in Bilski v. Kappos. The critical question presented to the Court for consideration was whether the Federal Circuit erred by creating the so-called “machine or transformation” test, which requires a process to be tied to a particular machine or apparatus, or transform an article into a different state or thing, in order to be patentable subject matter. The Supreme Court held that the machine-or-transformation test is not the sole test for patent eligibility under §101, but is an important clue, thereby overruling the Federal Circuit who had earlier ruled that the machine or transformation test was the test to determine whether an invention is patentable subject matter.
But what practical effect has the Supreme Court ruling in Bilski v. Kappos had? Truthfully, not much. at least in terms of the day-to-day approach of patent attorneys and the U.S. Patent and Trademark Office. (Certainly, the decision was important in that it preserved the patentability of at least some business methods and preserved the patentability of software.)
While the machine-or-transformation test is now only an important clue, it really has become a safe harbor for practitioners. The assumption has been that you satisfy the machine-or-transformation test announced by the Federal Circuit and you have a patentable invention. Fail to satisfy the machine-or-transformation test and you may have a patentable invention, but neither the Patent Office nor any court has yet found an invention that failed the machine-or-transformation test to be patentable.
In the spirit of expressing gratitude this Thanksgiving holiday, Scott McKeown, Partner at Oblon, Spivak, Practice Center Contributor and author of Patents Post Grant Blog, shares the newest law for which the USPTO is thankful. On November 18, 2011, President Obama signed into law H.R. 2112, the Consolidated and Further Continuing Appropriations Act. This bill provides the USPTO with official spending authority through the end of September 2012 (the end of the fiscal year) and the ability to spend up to $2.7 billion dollars. According to Scott’s post, (more…)
PGR Window Anomaly to Encourage Early Litigation?
Post Grant Review (PGR) is limited to patents maturing from applications filed on or after March 16, 2013 (note, the exception for business method patents, Sec. 18 of the AIA). Of course, it will take several years for such patents to issue from the USPTO. Thus, practically speaking, PGR will not be an option for third parties seeking to challenge the validity of an issued patent until at least the second half of this decade. Nevertheless, the PGR statutes will have a significant impact on third party options and parallel litigation strategy going forward.
As a reminder, patents eligible for PGR that are not business method patents, are those that are within 9 months of issuance, or re-issuance for broadening reissues (§ 321 (c)).
When fashioning the Inter Partes Review (IPR) statutes, Congress mandated that IPR may not be requested until the later of 9 months from patent issuance, or if PGR is instituted the date of termination (§ 311(c)). This timing limit is meant to ensure that PGR and IPR are not conducted in parallel. IPR, unlike PGR, becomes available for all patents next September 16, 2012. (more…)
Ryan Chirnomas, Partner in the Biotechnology group at Westerman, Hattori, Daniels and Adrian, sent in this article discussing the Court of Appeals for the Federal Circuit’s recent Classen v. Biogen decision. He highlights the key points of the decision and why he believes this case is a missed opportunity to clarify the machine-or-transformation test of Bilski.
Not long after issuing opinions in AMP v. USPTO and Prometheus v. Mayo, the CAFC has again taken on the difficult questions of patent eligible subject matter in Classen v. Biogen. In 2008, the CAFC issued a three-sentence non-precedential opinion holding that Classen’s claims do not recite patent eligible subject matter. This decision was appealed to the Supreme Court and subsequently remanded to the CAFC after the Supreme Court’s Bilski decision. The instant decision includes a discussion of patent-eligible subject matter, as well as the safe harbor exception to infringement of pharmaceutical patents. This discussion is limited to questions of patent eligible subject matter. This decision relates to three patents: U.S. Patent Nos. 6,638,739 (“the ‘739 patent”), 6,420,139 (“the ‘139 patent”) and 5,723,283 (“the ‘283 patent”). (more…)