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Supreme Court ponders what is patentable in Bilski case
In Bilski v. Kappos, the U.S. Supreme Court finally heard oral arguments in a case addressing the limitations on patentable subject matter in the context of a business method invention, analyzing a body of case law in such a way that some say could wrongly call into question the validity of many other patents, while others argue it is not restrictive enough. The oral argument—and the subsequent decision—will be scrutinized to determine its effects on innovation, prosecution, licensing and litigation.
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 Section 101 of the patent laws. The court was also asked to consider whether the circuit court's "machine-or-transformation" test contradicts Congressional intent that patents protect "method[s] of doing or conducting business."
The Supreme Court has not considered what is patentable subject matter since 1981, so it is no surprise that the case has garnered 65 amicus curiae briefs, which break down as 17 supporting the Federal Circuit decision, 22 against and 26 supporting neither.
The en banc Federal Circuit held that Bilski's claims are not eligible for patenting and set out a single, "definitive" test for determining whether a process is patent-eligible under §101. That is, 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, which stated 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 v. Signature Financial Group and AT&T Corp. v. Excel Communications Inc. to the extent they relied on a "useful, concrete, and tangible result" as the test for patent eligibility under §101. The problem with saying that methods must be tied to a specific machine or have a transformation is not solely related to business methods. What about a method for medical diagnostics or seismic exploration?
On its face, the court's justices appear unwilling to allow the 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.
While we can't predict how the Supreme Court will ultimately rule in this particular case, we can take a moment to reflect on some of the wonderful quotes batted around by the court:
JUSTICE SONIA 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?
JUSTICE RUTH BADER 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?
The quality of the science is not a good measure of what is patentable. While there are plenty of ridiculous business method patents, plenty of devices would meet the "not-worthy" test, too. See U.S. Pat. No. 5,443,036 for a method of inducing aerobic exercise in an unrestrained cat [using] a hand-held laser apparatus. 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.
JUSTICE ANTONIN SCALIA: 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.
BILSKI ATTORNEY MICHAEL 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.
In the end, the justices seemed to be conflicted between wanting to limit patent eligible subject matter to exclude frivolous matters but not wanting to cut out valuable technological advances that happened to be unconnected to a machine or transformation. Whether the court will make a narrow ruling on that the claim at issue is not patent-eligible subject matter rather than some broad ruling that would cover all methods patents is certainly likely, but not guaranteed.
Is Bilski important? Some estimates say as many as 200,000 patents could be invalidated if Bilski is held to strictly apply to all method patents. For the biotech industry, the decision has significant ramifications for the patentability of many inventions, particularly diagnostics and personalized medicine. If the Bilski approach is upheld, patentees might need to include a method of treatment step in order to render a diagnostic claim patent-eligible. However, including such a treatment limitation can make it difficult to enforce the patent because there may not be a single entity that infringes all of the claim limitations.
While the Bilski decision has already been used to invalidate patent claims reciting a method for providing an improved vaccination protocol in Classen v. Biogen, it is doubtful that this will be the seminal case for biotech and diagnostics. For that, we may have to wait to see if the court takes up the biotech-specific invention in Prometheus v. Mayo.