Wednesday, 30 June 2010

Bilski v. Kappos: Supreme Court says, "No comment"

U.S. Supreme Court Chief Justice John Roberts has famously repeated the aphorism that, if it is not necessary that an issue be decided, it is necessary that it not be decided. Such is the lesson of Bilski v. Kappos. Apparently taking the Chief Justice's counsel to heart, the Supreme Court has issued an undoubtedly wise but nevertheless perplexing decision that is likely to make patent attorneys relieved but confused ... and leave everyone else simply confused.

As every patent law practitioner on earth has no doubt learned by now, the Supreme Court's nine Justices decided that Bilski's claimed invention is an "abstract idea," and therefore not patentable under 35 U. S. C. §101, Gottschalk v. Benson, Parker v. Flook, and Diamond v. Diehr. As to all other questions, however, the Court has delivered a resounding "No comment."

Conventional wisdom had already guessed that the Court would rule Bilski's claimed process not subject to patent. That said, all were waiting to hear whether the Circuit Court's "machine or transformation test" is viable, and whether business methods, software, and biotech inventions may be patented. To which the nine Justices replied, in short: Maybe, maybe not.

Authored by Justice Kennedy, the Court's majority opinion is a lesson in equivocation:

ABSTRACT IDEA: Seemingly the only issue on which the majority does not hesitate is the conclusion that Bilski's claimed process of hedging risk is an unpatentable abstract idea. Not even "limiting an abstract idea to one field of use or adding token postsolution components" can make it patentable. BUT, as Justice Stevens and three other Justices complain in their concurrence, the Court "never provides a satisfying account of what constitutes an unpatentable abstract idea."

BUSINESS METHODS: The majority suggests that certain business methods may be patentable: "[T]he Patent Act leaves open the possibility that there are at least some processes that can be fairly described as business methods that are within patentable subject matter under §101." In fact, under 35 U. S. C. §273(b)(1), "federal law explicitly contemplates the existence of at least some business method patents." BUT: "[W]hile §273 appears to leave open the possibility of some business method patents, it does not suggest broad patentability of such claimed inventions." And "even if a particular business method fits into the statutory definition of a “process,” that does not mean that the application claiming that method should be granted."

MACHINE-OR-TRANSFORMATION: Scolding the Federal Circuit for the narrowness of its machine-or-transformation test, the Court nevertheless admits that this test is helpful: "This Court’s precedents establish that the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101." BUT: "The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible 'process.'" (emphasis added) The Court reasons that new or unforeseen technologies might require standards of evaluation other than the machine-or-transformation test. Therefore the Court interprets §101 to be a "dynamic provision" that may require "new inquiries." What are these new tests? Who knows? The Court offers no suggestions.

PATENTABLE PROCESSES, SOFTWARE PATENTS, BIOTECH, ETC.: Because of unforeseen consequences, the Court refused to decide any issue other than the case before it or to rule on whether "technologies from the Information Age should or should not receive patent protection." (All those who had feared a broad pronouncement disqualifying software or other new-tech patents can now breathe a sigh of relief.) It's similarly futile to look for specific guidance as to patentable processes: "The Court ... need not define further what constitutes a patentable 'process,' beyond pointing to the definition ... provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr."

There is, of course, quite a good rationale behind the Court's position; the majority is deferring to Congress's aim of facilitating innovation. According to the Justices, §101's "expansive terms" and "permissive approach to patent eligibility" indicate the legislature's intent to give "a liberal encouragement" to innovation. The Federal Circuit's exclusive and artificial machine-or-transformation standard imposes upon the statute "limitations and conditions which the legislature has not expressed."

Again, almost no one expected the Court to uphold Bilski's patent. The only aspect of this ruling that seems to have surprised anyone is its vagueness. Given that the Court rejects Bilski's business method as an "abstract idea," it would have been helpful if the Court had made more effort to define that term. One can hazard a guess that cases involving claimed business methods will revolve primarily around this question in the near future.

As mused diplomatically on the Supreme Court blog, "the breadth of today's ruling is an open question." Thus Bilski v. Kappos, the most anticipated patent law case in recent history went out not with a bang, but with a whimper. No sweeping pronouncements and few definitive declarations were in evidence. In fact, the majority opinion may raise more questions than it answers. This, of course, can only work to the benefit of most patent attorneys, who make a living from the continued raising of such questions.

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