For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

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Monday, 28 June 2010

Machine-or-transformation? Bilski court speaks!

At last, the Supreme Court's long-awaited ruling on the standard of patentability of business method software patents in In re Bilski has been handed down (you can read it in full here). It's a 71-page decision and the IPKat can't pretend to have read it all: comments and analysis will come later. According to the headnote:

"Petitioners’ patent application seeks protection for a claimed invention that explains how commodities buyers and sellers in the energy market can protect, or hedge, against the risk of price changes. The key claims are claim 1, which describes a series of steps instructing how to hedge risk, and claim 4, which places the claim 1 concept into a simple mathematical formula. The remaining claims explain how claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand. The patent examiner rejected the application on the grounds that the invention is not implemented on a specific apparatus, merely manipulates an abstract idea, and solves a purely mathematical problem. The Board of Patent Appeals and Interferences agreed and affirmed. The Federal Circuit, in turn, affirmed. The en banc court rejected its prior test for determining whether a claimed invention was a patentable “process” under Patent Act, 35 U. S. C. §101—i.e., whether the invention produced a “useful, concrete, and tangible result,” see, e.g., State Street Bank & Trust Co v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373—holding instead that a claimed process is patent eligible if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a differentstate or thing. Concluding that this “machine-or-transformation test” is the sole test for determining patent eligibility of a “process” under §101, the court applied the test and held that the application was not patent eligible.

Held: The judgment is affirmed".
In addition to the main judgment, delivered by Justice Kennedy, a number of additional concurring judgments were delivered. Justice Kennedy's concluding comments are worthy of note:
"Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act’s text. The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr. And nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357. It may be that the Court of Appeals thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents, including (but not limited to) application of our opinions in Benson, Flook, and Diehr. In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text. The judgment of the Court of Appeals is affirmed".
Wikipedia on Bilski here
Patently-O's pre-Bilski software patent survey here
Coroporate Counsel: the waiting was the hardest part here
The European position on software patents here (if you're European), and here (if you're British)
Non-patentable business methods here and here
Bilski Brothers recipe for OK Bilski Chili and Beans here
Bilski gets a grilling from the bar here

Department of literary and cultural allusions
Features entitled "Waiting for Bilski" on the assumption that it was an original idea to do so here, here, here, here and here (there are more ...)
"Mr Bilski Goes to Washington" here
"Groundhogs Day: speculating on no Bilski decision this term" here

United States Supreme Court
Supreme Court website here
The Supremes here
Scotus weblog here

10 comments:

Anonymous said...

Amidst all the Bilski hype, one would miss the anticlimax here in the EC:

The Monsanto case has been settled in the Netherlands. Monsanto has -strategically after the AG's opinion?- withdrawn its claims, thus making it highly unlikely that the CJEU will still issue a ruling on the Biotech directive anytime soon (settlement reported on EPLaw Blog).

Kerry Tomlinson said...

Rather a beautiful judgement of Stevens J. He seems to shoot golden arrows of understanding through the unhelpful muddle of the Kennedy opinion.

Kerry

Anonymous said...

From the quoted headnote:

"Concluding that this “machine-or-transformation test” is the sole test for determining patent eligibility"

From the quoted concluding comments of Justice Kennedy:

"In disapproving an exclusive machine-or-transformation test..."

So which is it? Or have I got the wrong end of one of the sticks?

MTPT said...

Completely agree on Stevens - there's a wonderful line at the end of his demolition of Kennedy's reasoning:

"The Court essentially asserts its conclusion...This mode of analysis (or lack thereof) may have led to the correct outcome in this case, but it also means that the Court's musings on this issue stand for very little."

Hopefully it'll be Stevens' analysis of the meaning of "process" in the Patent Act context that the lower courts take forward.

MTPT said...

@Anonymous(2): It's the latter.

The first paragraph of the Syllabus/headnote is not the court's judgement; it's the rehearsal of the history of the case prior to the Supreme Court.

The language you quote ("Concludiong that this "machine-or-transformation test" is the sold test...") is part of the summary of the CAFC decision.

The Syllabus on the Court's decision doesn't start until the top of page 2.

MaxDrei said...

Haven't yead read any opinion yet but, being an EPO practitioner, I am keen to get reaction to my question below, on the interaction of patent-eligibility and non-obviousness, in the USA, from now on.

Suppose the abstract idea is a very inventive abstract idea. Suppose you get through 101 by satisfying the MoT test. Can you then rely upon the non-obviousness of your inventive new abstract idea, as such, to defeat any PTO objection to issue that has been formulated under 35 USC 103?

Or will the USPTO now behave like the EPO, and argue that the non-obviousness of the abstract idea, as such, will not overcome an obviousness objection?

Anonymous said...

Thanks for the clarification MTPT. I'd only looked quickly; now I look properly I see what's going on.

Anonymous said...

"Hopefully it'll be Stevens' analysis of the meaning of "process" in the Patent Act context that the lower courts take forward."

I don't see how that is possible given that he was out voted 5-4. Stevens and 3 others took the view that business methods should be excluded. The opinion backed by the majority took the opposite view and has stated that processes can not be excluded on the basis that they are business methods and therefore that some business methods are allowable.

MaxDrei- As I understand such issues shoudln't come in under 103 but possibly can under 101. The exsisting Supreme judgements Benson, Flook and Diehr give mixed (arguably contradictory) messages on claims which are abstract except for "insignificant post solution" features.

Anonymous said...

I agree with MaxDrei that the real question is whether the "inventiveness" of an abstract idea can contribute to non-obviousness under 35 USC 103. (Common (layman's) sense would say "no".)

I don't see how this could be dealt with under 101 without aggravating the inherent contradictions already present in Flook and Diehr.

MaxDrei said...

Anon writes that Flook/Diehr deliver "mixed messages" but I thought that Flook (penned by Stevens?) survived unscathed and that puts the abstreact algorithm part of the prior art.

No wonder US patent attorneys reacted with outrage, during that phase of the development of the EPO position on obviousness of pure business methods.

Trouble for Stevens is that an algorithm that delivers a new and inventive solution to an objective technical problem deserves protection under the patent law.

So, I now await the CAFC, interpreting Bilski at SCOTUS, to implement a "technical" test like that at the EPO. It might be unappetising to NIH-troubled Americans, but it's better in tune with GATT-TRIPS than "abstract", eh?

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