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Supreme Court to decide patent eligibility of processes

On June 1, 2009 the Supreme Court of the United States (Bilski v. Doll) granted an appeal that could affect all existing and potential patents directed to process inventions. The pending Supreme Court decision could have an impact upon a wide range of technologies, including business methods, software and biotechnology related processes. In a lower court decision, the Court of Appeals for the Federal Circuit (Federal Circuit), In re Bilski; 2007-1130, Fed. Cir. 2008 (“Bilski”), substantially changed the law concerning the patentability of processes, including those relating to computer software and business methods. The Federal Circuit found that certain claimed inventions were not statutory (35 U.S.C. § 101), i.e., are not the kinds of inventions U.S. patent law is intended to protect. Since Bilski was decided last October, the validity of many process patents have been questioned and numerous patent applications have been rejected by the U.S. Patent and Trademark Office.

Bilski

Under U.S. patent law, “whoever invents or discovers any new useful process, machine, manufacture, or composition” may obtain a patent on their invention. At issue is the patentability of “processes” and in particular, how to determine whether a patent application claims a “new and useful process.”

Bernard Bilski and Rand Warsaw appealed a decision by the Board of Patent Appeals and Interferences rejecting the claims of their patent application directed to a method of hedging risk in the field of commodities trading. The Federal Circuit affirmed this decision, finding Bilski's process claims unpatentable because they were not tied to a machine or a specific physical transformation. The Federal Circuit set forth the “Machine or Transformation Test” to determine whether a claimed process invention is patent-eligible. According to Bilski, in order to include patentable subject matter, a process patent claim must be “tied to a particular machine, or…transforms an article.” Furthermore, “the machine or transformation in the claimed process must not be merely insignificant.”

Many legal scholars have been critical of the Federal Circuit decision, claiming that it doesn't take into effect the significance of rapidly changing technologies, such as computer software. The Supreme Court has now decided to weigh in, which will likely lead to establishing the law concerning the patent eligibility of process inventions. This is especially true, considering the high court hasn't directly discussed patent eligibility under § 101 for more than 25 years, which is prior to Microsoft's first commercially available Windows® operating system.
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Conclusion

Bilski did not invalidate business method or software patents, but certainly made it difficult to obtain these patents based upon a more stringent test. The Supreme Court is expected to review the “machine or transformation test”, and in the process, it may establish a new test for patent-eligible subject matter.

Oral arguments will likely be heard this coming Fall, and a final decision isn't expected until late 2009 or early 2010. Business owners and entrepreneurs are encouraged to continue seeking protection for valuable process inventions and pay close attention to this developing area of the law.

Jonathan Fritz is an attorney with the law firm of Whyte Hirschboeck Dudek S.C. He is a registered patent attorney with a background in biotechnology, bioinformatics, and computer science. His practice is focused upon intellectual property counseling, information technology and IP litigation. He can be reached at jfritz@whdlaw.com.


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