News + Events
Bilski Disappoints: Supreme Court Leaves Open the Question of Patent Eligibility
June 28, 2010
James Moore Bollinger
Trenton A. Ward
In a highly anticipated opinion released today, the Supreme Court of the United States disappointed many in the patent bar when it failed to provide specific guidance in the confusing patent-eligibility landscape. In Bilski v. Kappos, the Supreme Court found that the Federal Circuit’s “machine-or-transformation test” for determining patent eligibility “is a useful and important clue,” but held that it is “not the sole test for deciding whether an invention is a patent eligible ‘process.’” In rejecting the Federal Circuit’s “sole test,” however, the Supreme Court did not articulate a standard for determining whether a given process is patent eligible, preferring instead to let future case law define the outer boundaries of patent eligibility.
The Court specifically announced that “[n]othing in this opinion should be read to take a position on where the balance should be struck” between protecting inventors and preventing monopolies on general principles. The Court also found that it “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 Gottschalk v. Benson, 409 U.S. 63 (1972), Parker v. Flook, 437 U.S. 584 (1978), and Diamond v. Diehr, 450 U.S. 175 (1981). Under those cases, “laws of nature, physical phenomena, and abstract ideas” are not patent eligible.
Although Bilski does not articulate a specific test for determining patent eligibility, it does contain dicta that may be relied upon by patentees and accused infringers alike in their respective attempts to support the eligibility or invalidity of a given process under 35 U.S.C. §101.
Abstract Ideas: Not Patentable
Not surprisingly, the Supreme Court reaffirmed that abstract ideas are not patentable. All nine Justices agreed that Bilski’s method of hedging commodities risk was an “unpatentable abstract idea.” But although “abstract ideas” are not patentable, the Court gave no guidance as to whether a given “invention” is an “abstract idea” or a patentable “process.”
Business Methods: Still Alive
One result stemming from the majority opinion is that business methods are still theoretically patentable. The Supreme Court majority held that “a business method is simply one kind of ‘method’ that is, at least in some circumstances, eligible for patenting under §101.” Although the Court failed to give any specific guidance on business methods, it did caution that “[i]f a high enough bar is not set” against business methods, there would be a flood of attempts to patent such methods.
Software: Little Guidance
With respect to software, the Court gave little guidance but did reemphasize its previous holding in Benson that a patent should not be granted to the use of an algorithm by a computer program if the “practical effect would be a patent on the algorithm itself.” The Court also advised that §101 should be “dynamic” and “encompass new and unforeseen inventions.” For example, computer programs may initially have been perceived as unpatentable, “[b]ut times change” and “[t]echnology and other innovations progress in unexpected ways.”
Diagnostic Medicine Techniques: Diagnosis - Unknown
The Supreme Court majority stated that rigid application of the machine-or-transformation test would create uncertainty as to the patentability of advanced diagnostic medicine techniques. By emphasizing that the machine-or-transformation test is only one “clue” for patent eligibility, some may argue that diagnostic methods might be patent eligible. The Court cited Diehr to explain that while a law of nature could not be patented, “an application of a law of nature . . . to a known structure or process may well be deserving patent protection.” The extent to which a diagnostic method is deserving of patent protection remains an open issue.
Justice Stevens’ Concurrence:
Four Justices, led by retiring Justice Stevens, filed a concurring opinion which advocated for a per se rule against the patentability of business methods. Justice Stevens argued that “a claim that merely describes a method of doing business does not qualify as a ‘process’ under §101.” Those arguing against business method patent eligibility therefore may find some comfort in Justice Stevens’ concurring opinion.
Today’s Bilski decision raises more questions than it answers. It will be up to future cases to determine when a method is a patent eligible “process” or merely an unpatentable “law of nature, physical phenomena, or abstract idea.”