Patent Baristas

The Supreme Court finally heard oral hearings in the Bilski v. Doll case.  Here, the Court was asked to consider whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101.

The Court is also to consider whether the Federal Circuit’s “machine-or-transformation” test contradicts Congressional intent that patents protect “method[s] of doing or conducting business” under 35 U.S.C. § 273.  The Supreme Court has not considered what is patentable subject matter since 1981. This case may decide if patents also should protect business processes that do not depend on a particular machine or device.

The en banc Federal Circuit held that Bilski’s claims are not eligible for patenting and set forth a single, “definitive” test for determining whether a process is patent-eligible under § 101: a process is patent-eligible only 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 Bilski, the Federal Circuit seized on a sentence from Diamond v. Diehr, 450 U.S. 175, 184 (1981), quoted from Benson, 409 U.S. at 70, that “[t]ransformation and reduction of an article ‘to a different state or thing’ is the clue to the patentability of a process claim that does not include particular machines” (emphasis added).

The majority held that this test was not “optional or merely advisory” but rather “the only applicable test” for patent-eligible processes.  In doing so, the Federal Circuit majority overruled its earlier decisions in State Street Bank and AT&T to the extent they relied on a “useful, concrete, and tangible result” as the test for patent eligibility under § 101.

At oral argument, the Supreme Court seemed skeptical about extending patent protection beyond the traditional labors of manufacture.  Some questions took an extreme definition:

BREYER: Do you think that the framers would have wanted to require anyone successful in this great, vast, new continent because he thinks of something new to have had to run to Washington and to force any possible competitor to do a search and then stop the wheels of progress unless they get permission? Is that a plausible view of the patent clause?

BREYER: So you are going to answer this question yes. 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?

Other questions danced around the issue of how inventions can be tied to “technology” — whatever that means:

SOTOMAYOR: So how do we limit it to something that is reasonable? Meaning, if we don’t limit it to inventions or to technology, as some amici have, or to some tie or tether, borrowing the Solicitor General’s phraseology, to the sciences, to the useful arts, then why not patent the method of speed dating?

GINSBURG: Isn’t that the basis on which the patent law rests in Europe, in other countries? They do not permit business method patents. It has to be tied to technology, to science or technology. So if other systems are able to work with the notion of technology-based, why not ours?

Other questions looked at whether there is a real shift in what is patentable or whether certain patentable subject matter just didn’t exist before:

SCALIA: You know, you mention that there are all these — these new areas that didn’t exist in the past because of modern business and what-not, but there are also areas that existed in the past that don’t exist today. Let’s take training horses. Don’t you think that — that some people, horse whisperers or others, had some, you know, some insights into the best 8 way to train horses? And that should have been patentable on your theory.

JAKES: They might have, yes.

SCALIA: Well, why didn’t anybody patent those things?

JAKES: I think our economy was based on industrial process.

SCALIA: It was based on horses, for Pete’s sake. You — I would really have thought somebody would have patented that.

JAKES: There are also issues with enforcement. I can’t really answer why somebody wouldn’t have. There are teaching methods that were patented. There are a number of them that we’ve included in our brief where there were patents issued for teaching methods, and I don’t think that we’ve had a serious enforcement problem with people being sued for using teaching methods. But there have been those 2 people who have sought to patent them rather than keep them as secrets or just use them.

In the end, the justices seemed to be conflicted with wanting to limit patent eligible subject matter to exclude frivilous matters but not wanting to cut out valuable technological advances that happened to be unconnected to a machine or transformation.

SOTOMAYOR: How about if we say something as simple as patent law doesn’t cover business matters instead of what the Federal circuit has begun to say, which is technology is tied to a machine or a transformation of the substance, but I have no idea what the limits of that ruling will impose in the computer world, in the biomedical world, all of the amici who are talking about how it will destroy industries? If we are unsure about that, wouldn’t the safer practice be simply to say it doesn’t involve business methods?

On its face, the Court Justices appear unwilling to allow patent claims for a strategy of hedging risk in buying energy but also reluctant to use this as the definitive case for deciding what should or should not fall within all patentable subject matter.  For that, we may have to wait to see if the Court takes up the Prometheus  v. Mayo case.

You can see the complete transcript of the oral argument here.

Other reflective commentary is available here:

• Patent Docs (The Last Footnote)
• PrawfsBlawg (Substance v. Procedure)
• WSJ Law Blog (Business-Method Patents on Life Support?)
• Feld Thoughts (My Field Trip To The Supreme Court)
• IP Watchdog (A Bird’s Eye View)
• patents4life (Information, please!)
• Patent Prospector (Incoming)