Joff Wild

Analysis of the Supreme Court's decision in the Bilski case is now coming in thick and fast. Most people think it is good news for business method patents (though not all good news) and bad news for those who do not like such patents or those which protect software. Many comment that the court has actually chosen to do very little. I am particularly intrigued by the comments of Nicholas Groombridge from Weil Gotshal (see below), who states: "Interestingly, and unlike all other recent patent decisions, the Court split on ideological lines: it appears the conservative wing may be concerned that cutting back patent protection too much would be bad for innovation and the economy." If this is the case, does it mean that we wil see fewer Supreme Court paent cases over the coming years? 

Following are a selection of the comments I have received.

Meredith Addy, chair of the appellate practice at Brinks Hofer Gilson & Lione in Chicago, writes:

The Court's ruling in Bilski is its first decision on patent eligibility in the 21st century. It also marks a transition for the high court, from the Machine Age to the Information Age.

The ruling largely met expectations. The Court recognizes that times change, that they'll continue to, and that “[t]echnology and other innovations progress in unexpected ways.

But in some ways the ruling fell short. The issue central to America's companies is how to protect inventions while preventing monopolies. But many of the complexities presented by our "Information Age" have been left to the lower courts to be decided on a case-by-case basis—not based on broad guidance but on the facts in each application.

Interpreting Bilski will take time. As Justice Stevens' last opinion, Bilski is a watershed moment of a different sort. Stevens' concurrence suggests that Congress’s views at the turn of the 21st century probably could not serve as a “valid basis for interpreting a statute passed in the middle 20th century.” Yet with Stevens' departure, the balance of the Court shifts—and the issue now in the remit of the lower courts is to determine the right way forward for the current century.

Nicholas Groombridge, co-head of Weil, Gotshal & Manges LLP’s patent litigation practice, writes:

The Court has declined to find business methods unpatentable per se. It has expanded the scope of what may qualify for patent protection, by saying that the test adopted by the court of appeals (the so-called machine-or-transformation test) was too restrictive.

This is the first time in several years that the Court has issued a decision expanding rather than cutting back the scope of patent protection. Does this mean we have passed the high watermark of the trend to cut back on patent protection evident in the Court's decisions over the last 5 years?

Interestingly, and unlike all other recent patent decisions, the Court split on ideological lines: it appears the conservative wing may be concerned that cutting back patent protection too much would be bad for innovation and the economy.

Bradley C. Wright, a shareholder at Banner & Witcoff, writes:

The US Supreme Court has ruled that a business method invention was not entitled to a U.S. patent because it was merely an abstract idea. In Bilski v Kappos, the Court said that business methods should be eligible for patent protection as long as they do not constitute an abstract idea or fall within another recognized exception to patentability.

The lower court had rejected the patent application because it was neither tied to a particular machine nor transformed something tangible. The Supreme Court rejected the “machine-or-transformation” test as the sole test of patent eligibility, noting that the only recognized limitations on patentable subject matter include laws of nature; physical phenomena, and abstract ideas. The Court did, however, state that the “machine-or-transformation” test was “a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101.” While many business method patents that can satisfy the “machine-or-transformation” test may survive Bilski’s abstract idea test, undoubtedly others will not. It may take several more years before the courts are able to provide greater clarity in this area. For now, the Supreme Court has loosened the reins a bit on the standards for patent eligibility.

John Squires, co-chair of the IP group at Chadbourne & Parke, writes:

As Thomas Jefferson wrote centuries ago "ingenuity should receive liberal encouragement." Today it has. The Supreme Court's Bilski decision confirms that the doors of the U.S. Patent Office remain open and welcoming 'for the revelations of...new, onrushing technology."

Today's decision will serve to further our country's competitiveness and leadership position in software, internet technologies, computers, mobile platforms, wireless technologies, bioinformatics, financial services, process, manufacturing and the like, to name a few. Smartly, the Court turned away arguments that attempted to tether innovation to the specific economic sector from whence it came. Instead, the Court's decision on the facts confirms, 9-0, that abstract ideas remain ineligible for patenting.

The decision is also a very a pragmatic one as well - in short, the patent office will not have to spend its resources examining invention claims that attempt to string abstract concepts together or applications where the invention is not fully baked. Information age companies and start-ups and patent practitioners alike should take heart in today's decision that their inventions will continue to be protectable under the US patent law.

Pavan K Agarwal, partner with Foley & Lardner LLP, Washington DC office, writes:

“The Supreme Court cautiously decided that “business method patents” are not precluded from eligibility for patent protection. At the same time, four justices of the Court seemingly invited the Federal Circuit to possibly define a narrower class of patent applications that claim to instruct how business should be conducted as being directed to abstract ideas and therefore not patent eligible in a manner consistent with the Supreme Court’s precedent.

The Supreme Court rejected that the machine-or-transformation test as the exclusive test in deciding whether a patent application claim is eligible for patent protection. Four justices recognized the potential, even unintended, impact it could have on deciding patent eligibility for Information Age technologies, such as software and advanced diagnostic medicine techniques. Yet, they distanced themselves from making any concrete statements on the outer boundaries of patent eligibility for processes in these technologies.

The Supreme Court took careful steps to affirmatively decide very little, expressly leaving for the future the harder questions about the appropriate outer boundaries of patent eligibility for various technologies of the Information Age, such as software and advanced diagnostic medicine techniques.

The Supreme Court confirmed that it does not endorse the tests in the Federal Circuit cases State Street Bank and AT&T, yet indicating that the Federal Circuit may well develop other criteria beyond the machine-or-transformation test consistent the purpose and text of section 101.

Stan Panikowski, patent and appellate litigation partner at DLA Piper LLP (US) in its San Diego office, writes: 

The Supreme Court’s Bilski opinion is remarkable for how little it decided. The only things on which a majority of the Court expressly agreed were: (1) the Federal Circuit’s machine-or-transformation test is not the exclusive test for patent subject matter eligibility; (2) business methods are not categorically unpatentable; and (3) the invention at issue in Bilski is an unpatentable abstract idea.

The following comments correspond to each of the Court’s three principal holdings.

(1) The majority opinion was almost purely a course correction opinion. The Court affirmed the Federal Circuit’s ultimate judgment, but it told the Federal Circuit its holding had gone a little too far in restricting patent subject matter eligibility. The majority opinion reined in the Federal Circuit, while at the same time loosening the reins on what can be patented. But the Court only loosened the reins on patentability enough to get us back to where we were before the Federal Circuit decided Bilski. There simply were not five votes to break new legal ground.

The main consequence of Bilski for practitioners is not so much that the law is any different today than it was before the Federal Circuit decided Bilski. Rather, it is more that the profile of patent subject matter eligibility as a litigation defense has been significantly raised. And while deciding relatively little, the Supreme Court has provided some additional statements for patent attorneys to use in litigating this issue on both sides. The language from the majority opinion that I expect to receive the most attention in litigation is: “Flook established that limiting an abstract idea to one field of use or adding token postsolution components did not make the concept patentable.” We can expect a lot of litigation over whether a particular invention “limits an abstract idea to one field of use” or merely “adds token postsolution components.” Welcome to the new world of section 101 litigation.

(2) Bilski may be best remembered for what almost happened, but did not. There were four votes for holding that business methods are categorically unpatentable. Justice Stevens was the apparent leader of the effort to get a fifth vote, writing an extensive historical treatise that probably was designed to attract Justice Scalia’s vote. But Justice Scalia’s vote never came. So Justice Stevens’ opinion, in his last day on the Court, was a concurrence in the judgment and not a pathbreaking majority opinion. There will still be much litigation over whether particular business methods are patentable subject matter, but the notion that business methods are categorically unpatentable is now off the table. We can expect a lot of the litigation to focus on the majority opinion’s statement about “adding token postsolution components.” The Court also took care to emphasize the role of other statutory grounds for patent invalidity. So we can expect continued emphasis on obviousness defenses in litigation over business method patents. After the Federal Circuit’s decision in Bilski, many obviousness defenses were dressed up as subject matter defenses. We will probably continue to see that, and probably will also see more subject matter defenses dressed up as obviousness defenses.

(3) The only thing on which all members of the Court agreed was that the particular invention in the Bilski case is an unpatentable abstract idea. The fact that the Court decided little else may reinforce the view of many patent attorneys that Bilski was not the right case for the Court to take. Not only was the Court unanimous in the ultimate judgment, but there is little evidence that they thought it was a close case on the facts. Perhaps a case that was closer on the facts would have forced them to give more guidance to lower courts and practitioners. But then again, maybe they just would have agreed on nothing.

An anti-software patent perspective comes from Florian Mueller, the former director of the NoSoftwarePatents campaign and author of the FOSS blog:

Unfortunately, the Supreme Court delivered an opinion that doesn't help the cause of partial or complete abolition of software patents at all.

[T]he court's majority position is about the most liberal reasoning that it could have been. Only a decision to uphold the Bilski patent could have been any less restrictive.

Simply put, the Supreme Court's decision does not do away with even one software patent that already exists, nor does it raise the bar for the future.

The decision announced today makes it clear that a majority of the Supreme Court wanted to give the abolition of even only a small percentage of all software patents the widest berth possible.

This US decision is even more disappointing when taking into account the global trend.

The position that software patents should be abolished isn't nearly as popular among judges and politicians as it is in the free and open source software community.

Mueller's full blog on the decision can be accessed here.