2 December 2009

In Re Bilski: a setback for business method and software patents?

The PTO addresses Bilski and software patentsphoto © 2010 opensource.com | more info (via: Wylio)


In October 2008, the US Court of Appeals for the Federal Circuit (CAFC) issued its decision in re Bilski en banc, describing it as “an historic opportunity to fix the US patent system, as the Bilski rehearing will directly address the boundaries of the subject matter of patents.”

The re Bilski appeal arose from the rejection by the USPTO of all claims because they failed to limit the method’s performance to a specific machine or apparatus, and the method did not involve a transformation of one thing into something different from the original, with the machine-transformation test having been previously articulated in the decisions of the US Supreme Court in Gottschalk v Benson, Parker v Flook and Diamond v Diehr. The Federal Circuit’s decision is thought to have turned the tide for business method patents in the United States.

While Affirming That Business Methods Are Still Patentable

the Court has rejected State Street Bank’s “useful, concrete, and tangible result” test, which many believed had cleared the way for improper patents on fundamental principles and everyday activities that had no connection to technological innovation.

In January 2009, Bilski petitioned the US Supreme Court for a writ of certiorari, seeking to overturn the Federal Circuit decision.

In the meantime the Court

Granted Certiorari

and heard oral arguments on 9 November 2009.

Reading that transcript is a quite funny thing. The Justices seem to openly show their reluctance and, even malice, against petitioners’ alleged invention. Mr Jakes, counsel for the petitioners, had to stand for questions like the one of Justice Breyer “You know, I have a great, wonderful, really original method of teaching antitrust law, and it kept 80 percent of the students awake. They learned things — (Laughter.) — it was fabulous. And I could probably have reduced it to a set of steps and other teachers could have followed it. That you are going to say is patentable, too?”

Chief Justice Roberts went even further asking “I’m looking at your Claim 1, in Joint Appendix page 19 to 20. How is that not an abstract idea? You initiate a series of transactions between commodity providers and commodity consumers. You set a fixed price at the consumer end, you set a fixed price at the other end, and that’s it. I mean, I could patent a process where I do the same thing. I initiate a series of transactions with sellers. I initiate a series of transactions with buyers. I buy low and sell high. That’s my patent for maximizing wealth. I don’t see how that’s different than your claim number 1.”

I would not be surprised if the Supreme Court affirmed the Federal Circuit. In such an event, the Justices should take their awaited decision to, hopefully, provide for a long-expected clarity on the patentability of business methods and software implemented inventions.

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