Supreme Court Leaves Door Open To Process Patents
On June 28, the U.S. Supreme Court issued its long-awaited decision in Bilski et al. v. Kappos. At issue in the case was whether business methods were eligible for patent protection. There had been some concern expressed in the press that the Supreme Court would use the Bilski case as a vehicle to determine that business methods and/or software were not patentable.
However, the court declined to do so, finding that no particular class of methods or processes was or was not inherently patent-eligible subject matter. The court instead articulated that its basic guidance on the determination of whether a method defines patent-eligible subject matter should be applied on a case-by-case basis, affirming its long-established approach to patentability.
Protecting Invention
The process of deciding whether an innovation can be protected by a U.S. patent has two steps. First, the innovation must be patent-eligible subject matter, falling within one of the classes established by the patent statute: a process, machine, manufacture, or composition of matter, or any improvement thereof. Second, the innovation is examined to determine if it is useful, novel, non-obvious, adequately described in writing, and disclosed sufficiently to enable one of ordinary skill in the field to make and use the innovation.
In the Supreme Court case, Bilski had applied for patent protection for a method of hedging against the risk of price changes of commodities in the energy market. Bilski’s patent application had been rejected by both the U.S. Patent and Trademark Office and the Court of Appeals for the Federal Circuit.
In affirming the patent office rejection, the appeals court had articulated what it had decided to be the sole test for determining whether a process defined patent-eligible subject matter — the “machine-or-transformation test.” The machine-or-transformation test requires that the process either be tied to a “particular machine or apparatus” (which the appeals court left undefined) or involve the transformation of something from one state to “a different state or thing” (e.g., a process for transforming rubber from its raw state to its commercially-usable finished state).
The Supreme Court unanimously held that the Bilski process was not eligible for patent protection, but not because of their application of the machine-or-transformation test. However, the justices were split in their reasoning.
The minority agreed that Bilski should not be awarded a patent, but based its conclusion on its contention that business methods should not be patent-eligible. However, since the minority decision does not set precedent, the Bilski decision does not categorically exclude software and business methods from patent protection.
The Fallout
The patent office quickly issued interim guidelines on how to apply the Bilski ruling. If a method meets the machine-or-transformation test, and is not clearly directed to an abstract idea, then it is patent-eligible. Conversely, if a method does not meet the machine-or-transformation test, then it is not patent-eligible, unless it is clear that the method is not directed to an abstract idea. If a method is rejected as not patent-eligible, the applicant should be given the chance to explain why the method is not directed to an abstract idea.
While not conclusive, the Bilski decision provides some guidance to inventors of processes and methods. It is critical that the patent application make clear that the inventive method does not fall into the categories of laws of nature, physical phenomena, or abstract ideas. Further, while the machine-or-transformation test will not be the exclusive requirement for patent-eligibility of methods, if the patent application can be written so as to meet this test, the patent-eligibility will likely not be a reason for rejection of the patent application.
Brian Dingman is chair of the intellectual property group at the Worcester-based law firm of Mirick O’Connell. He can be reached at bdingman@mirickoconnell.com.
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