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Supreme Court’s Opinion in Bilski Leaves Questions

On June 28, 2010, the U.S. Supreme Court issued its long-anticipated opinion in the case of Bilski v. Kappos, which, it was hoped, would at long last provide much-needed guidance for the U.S. Patent & Trademark Office and for practitioners on the subject of the patentability of business methods and other processes. However, other than rejecting the process-patentability test that had been proposed by the U.S. Court of Appeals for the Federal Circuit, the overall effect of the opinion is to re-introduce uncertainty into the question of what constitutes a patentable process and what does not.

In its en banc opinion in this case, the Federal Circuit previously had affirmed the exclusive applicability of the so-called “machine or transformation test” to determine whether a process qualifies for patent protection under U.S. law. Under that test, “[a] claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” In re Bilski, 545 F.3d 943, 954 (C.A. Fed. 2008). The Supreme Court expressly rejected the machine or transformation test as the sole means to assess process patentability. However, other than identifying the test as a useful tool to make that assessment, the Court did not express any test or set of factors to provide any additional guidance on the subject. The Court, in fact, very clearly and expressly affirmed the unsettled nature of the law in this area, holding:

It is important to emphasize that the Court today is not commenting on the patentability of any particular invention, let alone holding that any of the above-mentioned technologies from the Information Age should or should not receive patent protection. This Age puts the possibility of innovation in the hands of more people and raises new difficulties for the patent law. With ever more people trying to innovate and thus seeking patent protections for their inventions, the patent law faces a great challenge in striking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of general principles. Nothing in this opinion should be read to take a position on where that balance ought to be struck.

While it also rejected the argument that methods of conducting business are categorically un-patentable, the Court nevertheless affirmed the rejection of the business-method patent application that was the subject of the case on the grounds that it was an improper attempt to patent what is merely an abstract idea.

The Supreme Court’s opinion in Bilski likely will do nothing to help clarify the place of innovation in fields such as software development with respect to U.S. patent law, and it leaves the door open for enterprising patent collectors to perpetuate the same kinds of claims abuses that many had hoped Bilski would help to eliminate. Therefore, for the foreseeable future, software firms will need to continue to be prepared to recognize patent exposure as a cost of doing business in their industry, and they must be ready to work closely with knowledgeable counsel to evaluate the integrity of any patents they hold as well as the validity of any patent claims with which they are presented.

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This page contains a single entry from the blog posted on July 8, 2010 12:51 PM.

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