Patent Law Practice Center

Supreme Court Rules that Business Methods May be Patentable

Guest Post by Trevor Carter (partner at  Baker & Daniels ,Practice Center Contributor and PLI Faculty Member) and Daniel M. Lechleiter ( associate at Baker & Daniels)

On June 28, 2010, the U.S. Supreme Court decided Bilski v. Kappos, an important case involving whether patent claims directed to so-called “business methods” are patentable under U.S. patent law.  The case involved a patent application that claimed a method of hedging against the risk of price changes in the energy market.  The claims described a series of steps instructing how to hedge risk, as well as the same concept embodied in a mathematical formula.  The U.S. Patent Office and all of the lower courts rejected the application as unpatentable, and, because it found that the claims pertain to an “abstract idea,” the Supreme Court agreed.

But, far short of providing clear guidance on how to determine whether a given business method is patentable, the Supreme Court provided high level guidance and left future case by case determinations to lower courts.  Thus, while the case makes clear that certain business methods can be patentable, with the exception of very general guidance found in the Patent Act and three of the Court’s prior decisions, it leaves wide open the question of how to distinguish patent-eligible business methods from ineligible ones.  This will undoubtedly lead to further litigation and legal experimentation in the lower courts, as they attempt to determine how and where to draw the line between patentable and unpatentable business methods. (more…)

Bilski Decision: No Concrete Guidance On Test For Determining Patentability of Processes

Many of us are still trying to digest yesterday’s Supreme Court decision on the Bilski v. Kappos case and will most certainly be reading and re-reading the opinion many times before drawing any conclusions.  It will be interesting to see how the various players in the patent community interpret the decision and what they believe will be the significance of the ruling.  I reached out to several of the Practice Center Contributor’s asking them to weigh in on the decision.  Here is what Jeanne M. Gills, Vice Chair, IP Department  at Foley and Lardner had to say….

The Supreme Court’s ruling is fairly narrow.  The Court merely affirmed the finding of unpatentability because the Bilski invention was viewed as abstract ideas.  It was widely viewed that the particular Bilski invention was unpatentable, so that affirmance was not surprising.  Also, I believe many believed that the Supreme Court would not find that business methods were categorically unpatentable (since some business methods could be patentable provided they meant certain criteria).  (While this was a close and split (5-4) decision, I do think that this was the right result, and the alternative could have put some issued patents in jeopardy.)  What the decision fails to do is offer more concrete guidance as to what constitutes an appropriate test for determining patentability of processes.  By rejecting the “machine or transformation” test as the sole or exclusive test, this leaves the door ajar for other tests to be fashioned.  I do not think it is sufficient to say that any test that is consistent with the patent statutory language offers much guidance.  Hence, the Supreme Court gave the lower courts and the Federal Circuit flexibility to devise other tests or criteria for evaluating the patentability of processes in general and business methods in particular. (more…)

Bilski v. Kappos: A Recap Before Decision Day

 

As the entire patent community waits with bated breath for the Bilski decision, it seems like the perfect time to recap the course of events that have brought us here.  Yesterday, IPWatchdog had a guest blogger, Robert M. Suarez, who did just that in his article, “Mr. Bilski Goes to Washington: An Abridged Guide.”  It is an excellent summary of the Bilski case.  

Before he offers his guide to the case, Suarez writes, “For all of the opinions, articles, and conjecture, all one need do is study the law and look at the precedents to know that anticipating how the Supreme Court will rule in a case is akin to trying to gaze into a crystal ball. So, what will be the future of business methods as patent-eligible subject matter? Will the machine-or-transformation test stand? What will be the fate of the Bilski patent? An educated guess is the best that one can hope for in this situation.” 

Well said Suarez!! (more…)