Patent Law Practice Center

Patentability of Business Method Subject Matter Divides Federal Circuit

A new level of significance is reached when the Federal Circuit U.S. Court of Appeals decides to address an issue even though it is not in fact at issue in the case before them. On March 2, 2012, the Federal Circuit issued its decision in MySpace, Inc. v. GraphOn Corp. (No. 2011-1149), in which they affirmed the lower court’s decision, finding the case was properly decided under §§ 102 and 103 of the Patent Act and not under § 101.

The significance is that even though the Federal Circuit was deciding on the issue of patent invalidity under §102’s anticipation standard and under § 103’s obviousness standard, the issue of whether or not the underlying subject matter was patentable was still brought up and discussed by the Federal Circuit judges.  (more…)

Post-Bilski: “Patent Strategy for Personalized Medicine”

Today’s guest post comes from Michael J. Shuster, Ph.D. (a partner in Fenwick & West’s Intellectual Property group and co-chair of  the lifes sciences group) and Pauline Farmer-Koppenol (associate in Fenwick & West’s intellectual property group).

Protecting inventions in personalized medicine with patents is essential to making the investment in research and development of those inventions worthwhile.  Absent meaningful patent protection, however, companies will be less likely to pursue such innovation since there is nothing to prevent competitors from free-riding on the back of the many hours and millions of dollars expended by the innovator company.

Personalized medicine diagnostics can produce meaningful improvements in patient outcome and medical economics.  Diagnostic innovations developed by University of California Professors Dan Pinkel and Joe Gray allowed for the first time sensitive and accurate measures of gene amplifications in breast cancer patient biopsies. This allows physicians to determine whether Herceptin® (trastuzumab) treatment is likely to improve the patient’s outcome because only tumors with the amplification respond to Herceptin®.  Pinkel and Gray’s remarkable invention was exclusively licensed to Abbot Laboratories which devoted years of effort and millions of dollars to bring this innovation to market.  Considering the cost of a full course of treatment with Herceptin®, approximately $70,000, the development of the HER2/neu amplification diagnostic test is valuable not only in minimizing the use of an expensive treatment for patients for whom it is unlikely to provide benefit, but it also helps patients by not wasting valuable time pursuing a treatment that is unlikely to be beneficial. (more…)

Bilski Aftermath: Will Europe’s “Technical Effect” Test Become the Law in the U.S.?

Robert Hulse, of Fenwick & West LLP, Practice Center Contributor and PLI Faculty member, discusses what the future may look like for business method patents:

I think most patent practitioners and applicants who have been following this case believe that we dodged a bullet, as the Court’s decision was about as good as could have been expected.  The Court removed the Federal Circuit’s overly rigid application of the machine-or-transformation (MOT) test as the sole test for patent eligible-subject matter, but it retained the test as a useful indication of whether a claim meets the subject matter requirement.  (In this respect, the Bilski decision is much like the Court’s decision in KSR a few years ago, where the court kept the teaching-suggestion-motivation (TSM) test, but held that it was just one of many useful ways to evaluate a claim for its compliance with the nonobviousness requirement.)  The benefit to applicants is that we can continue to rely on compliance with the MOT test by reciting a machine or transformation, subject to the “post solution activity” and “meaningful limits” considerations, while not being completely constrained by that test.

The Court also declined to exclude business methods from patent-eligible subject matter, although four justices (including Stevens, who is leaving the Court) would have done so.  This means that companies who innovate to create new ways of conducting business can continue to protect their inventions.  Excluding business methods for patent-eligible subject matter would have created more problems than it solved, not the least of which would have been how to define a “business method.” (more…)

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…)

Top 10 Patent Issues for Patent Practioners

I recently asked Thomas Creel, of Thomas L. Creel P.C., former patent law professor for 20 years at Columbia University Law School, that with all the latest developments in the patent community including the rebirth of patent reform, the recent court cases regarding what is patentable subject matter and the proposed changes in PTO procedures, what are the top 10 areas of interest for Patent  Practioners right now?  Here is what he had to say….

1.  Economy – There’s been a lot of talk about how the economy has and is changing the practice of law, particularly in private practice. For example, new billings methods have been proposed to replace the hourly billing traditional system. Have there been discernable economic and structural changes which have affected the patent practitioner, and how are they likely in the future to affect him or her?  For example, what is the future of the big boutique law firms (such as Finnegan, Henderson; Kenyon & Kenyon; Fitzpatrick, Cella, etc.) vs. the IP sections of large general firms?  How about large corporations- has the economy affected the filing of patent applications or the handling of litigation?  Another aspect of this might be what the average charge is for prosecution, litigation, licensing, etc. (more…)