Patent Law Practice Center

Bilski’s Impact on Finance Industry Patents

The following was written by Dale Lazar (Partner at DLA Piper and one of our newest Practice Center Contributor’s)  and Jim Heintz (Partner at DLA Piper).

When the Supreme Court announced it would hear the Bilski case, many speculated that the Court would use the opportunity to declare an end to patents on business methods. This did not happen. However, the Court did find that Bilski’s claims to a method for hedging risk were not the kind of invention for which a patent should be granted.

What does this mean for other finance industry patents and patent applications? Certain types of business method patents may be safe for now – but warning signs point to hazards down the road.

Most would agree that the claims of Bilski’s patent application are directed toward a business method. Two aspects of the Supreme Court’s Bilski decision are particularly important to the issue of whether finance industry inventions can be protected by patents: (1) business methods are not categorically excluded from patent protection; but (2) Bilski’s claims to methods for hedging risk are unpatentable because they claim an “abstract idea.” (more…)

Supreme Court To Review Standard For Proving Induced Patent Infringement

Written by Brandon Baum (Partner at Mayer Brown and Practice Center Contributor) and Matt Watts[1].

The state of mind requirement for proving induced patent infringement under 35 U.S.C. §  271(b) has been the subject of recent and, according to some, inconsistent opinions from the Federal Circuit. On October 12, 2010, the Supreme Court granted certiorari in Global-Tech Appliances, Inc. v. SEB S.A., WL 2629783 (2010), presumably to resolve the confusion.

Section 271(b) states: “[w]hoever actively induces infringement of a patent shall be liable as an infringer.”  While there are many factual scenarios under which a patentee might pursue an inducement claim rather than or in addition to a direct infringement claim, it is frequently invoked where the act of direct infringement is performed by the end-user of a product.  Under Section 271(b), the patentee need not sue the many end-users of a product who directly infringe, but instead may pursue the entity that sold the product to the end-users. (more…)

Microsoft v. i4i: Amici Make Strong Argument for Supreme Court Review of Patent Invalidity Standard

The following post comes from one of our newest Practice Center Contributor’s Clement S. Roberts.  Mr. Roberts is a founding partner at Durie Tangri where his practice focuses on intellectual property litigation and on complex commercial cases with a high-technology component.

A broad spectrum of academics and industry lined up Friday to support Microsoft’s request for Supreme Court review of its ongoing patent litigation against i4i.  In the underlying litigation, i4i won a pile of money on a patent dealing with the idea of separately storing metacodes and text in a markup language document.    While the litigation has an interesting factual history, the issue on appeal is a purely legal one – namely the application of the “clear and convincing evidence” standard to questions of invalidity.

As most people reading this blog already know, in order to invalidate a patent, a defendant must prove that the patent is invalid by “clear and convincing” evidence.  Ostensibly, this rule exists in order to reflect deference to the fact that the patent has been examined and found valid by an expert at the Patent and Trademark Office.    See e.g. American Hoist & Derrick co. v. Sowa & Sons, Inc, 725 F.2d 1350 at 1359 (Fed. Cir. 1984) (taking note of “the deference that is due to a qualified government agency presumed to have properly done its job.”).

Especially when taken together, however, the amicus briefs in Microsoft v. i4i overwhelmingly show that this is an exceptionally bad rule – at least when applied (as it is now) to all questions of invalidity. (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…)