In this final post, I shift ground a bit to talk about a case the Supreme Court will consider in its new term starting this fall. The case is known Bilski v. Doll. The Bilski case raises the basic question, when is a process too abstract to be patentable? The answer to the question will obviously be most pertinent to patents on things like computer software and methods of conducting business (such as finance or marketing strategies). But, depending on how the Court explains its decision, the case could have broader implications for whether people can patent other processes, such as a process for diagnosing an illness or for treating an illness.
In Bilski, both the Patent Office and the first-level appeals court rejected the patent applicants’ effort to get a process patent. This is because both concluded that the invention at issue – a method for hedging risk in commodities trades – does not fall within the meaning of the word “process” in Section 101 of the Patent Act. The way the inventors set forth their hedging method in the patent application, the patent would have covered – and thus would have let them exclude others from using – a method simply practiced by people reaching private agreements (without keeping a record of any kind, or using a computer to manage the process).(*)
The Federal Circuit, the appeals court that hears cases on review from the Patent Office, explained that, when a process is too abstract, it is not patentable subject matter. Recall, as I explained in my first post, that we don’t allow people to patent the most basic building blocks of innovation; if people could patent the most basic, abstract ideas, we could wind up stifling the very innovation we’re trying to encourage. The Supreme Court, in the Chakarbarty case about patenting bacteria, explained it this way:
The laws of nature, physical phenomena, and abstract ideas have been held not patentable. Thus, a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity. Such discoveries are “manifestations of … nature, free to all men and reserved exclusively to none.”
447 U.S. 303, 309 (1980) (quoting Funk Bros., an earlier case).
Applying Supreme Court precedents on about this question, the Federal Circuit in the Bilski case concluded that Bilski’s claim was too abstract. The way to ensure that the process for which a patent is sought is not too abstract is to verify that either “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” 545 F.3d 943, 954 (Fed. Cir. 2008). Bilski couldn’t meet this test. As the court explained, “[p]urported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances.” Id. at 963.
On June 1, 2009, the Supreme Court decided to review this case. It is the first time the Supreme Court has reviewed a case about the patentable subject matter analysis for a process invention (as opposed to a product invention) since 1981. The parties will argue the case in the late fall or early spring, and the Court should issue a written decision no later than June 2010. Will the Court reverse the Federal Circuit’s decision and state a new way to assess whether a process is patentable? Or will it affirm, either on the same ground the Federal Circuit provided, or with a different rationale? I don’t know. If the Court’s decision has broader consequences for fields like medicine or agriculture, I will share what I think here at Cooking Up a Story.
(*) For the interested reader, here is the attempted patent claim that the Patent Office and courts rejected: “A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of: (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer; (b) identifying market participants for said commodity having a counter-risk position to said consumers; and (c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.”
Joe Miller has worked in U.S. patent law since 1994, and has been a law professor since 2001. He teaches at Lewis & Clark Law School in Portland, OR, where he has lived since 2002. He loves enjoying delicious food and great wine with friends, so Portland is a wonderful place to live!