by Mark Malek

As our readers know, we are anxiously awaiting the decision from the U.S. Supreme Court in the Bilski case (coverage here and here).  This attorney, for one, is very much so wondering what will happen to software patents.  I’ve made it no secret that I believe that patents should be granted to software based inventions.  I think this would provide incentive for the industry to come out with more innovation.  Look at what software has done for us just in the field of patents.  It wasn’t more than 20 years ago that patent attorneys were dictating patents and secretaries were transcribing them on typewriters.  It was about 10 years ago that the most common way for us to file our patent applications and our responses to office actions was to just mail them.  I wonder when the patent office will catch up with the trademark office and send out Office Actions and other communications via email?

I am completely fine with the test set forth by the Federal Circuit in their decision in Bilski, but let’s not be too surprised if the Supreme Court tweaks it a little.  To be fair, Bilski is technically not a software patent case.  It does have ramifications on the software industry, but there are other industries that can be impacted by the Bilski decision.  In my opinion, the § 101 argument will not be over until the courts finally come down with precedent in each of the affected technology areas.  The areas that I think there will eventually be precedential decisions in are, of course, software, pharmaceutical and, very soon, pure business methods patents (which are all but dead anyway).

Speaking of precedent setting opinions in software, the Board of Patent Appeals and Interferences recently made their decision in the case of Ex parte Sprinivas Gutta and Kaushal Kurpati precedential.  The decision actually came out in August, but did not become precedential until this past month.  Technically, this decision is directed to the patentability of mathematical algarithms, but that will understandably have a direct impact on software patents.  The Board notes that the scope of a claimed invention must follow one of the judicially created exceptions:

For a claimed machine (or article of manufacture) involving a mathematical algorithm:

(1) Is the claim limited to a tangible practical application which the mathematical algorithm is applied, that results in a real-world use (e.g., not a mere field-of-use label having no significance)?

(2) Is the claim limited so as not to encompass substantially all practical applications of the mathematical algorithm either “in all fields” of use of the algorithm or even in “only one field?”

If the machine (or article of manufacture) claim fails either prong of the two-part inquiry, then the claim is not directed to patent eligible subject matter.

You can read the entire text of the opinion here.

So how is this much different from the Bilski test, i.e., how is this different from the “machine or transformation” test?  Those who aren’t familiar with the test set forth in Bilski have probably just stumbled across this article while doing a search for good looking patent attorneys (yes – this was a joke to make sure you are paying attention).  Seriously though, the test set forth by Bilski merely notes that patentable subject matter is either tied to a machine, or transforms an article into a different state or thing.  This is a simplistic approach to the Bilski test, as it currently stands, but for more information, take a look at our previous Bilski articles (here and here, in case you missed the invitation to click them above).  My read of this decision is that it is complementary of Bilski. In other words, I do not believe that this decision changes anything for that which we currently know as the rule for patentable subject matter.

The Board found that some claims met the machine portion of the Bilski test.  The Board also noted that although the four categories of patentable subject matter under § 101, i.e., (1) process, (2) machine, (3) manufactures and (4) compositions of matter, are extremely broad, and intended to include anything under the sun that is made by man, it is not unlimited.  The court made reference to the three categories that are not patent eligible as set forth by the Supreme Court in Diehr: laws of nature, natural phenomena and abstract ideas.  The Board also made reference to the Federal Circuit’s decision in Alappat, in which the Federal Circuit noted that the Supreme Court’s decision suggested a “mathematical algorithm exception.”  With that in mind, the Board set forth the above referenced test.  That is, if a claimed machine involves a mathematical algorithm, then it must be determined if the claim is limited to a tangible practical application and whether the claim is limited to as not to encompass substantially all practical applications of the mathematical algorithm.

To wrap it up, when claiming a machine that involves a mathematical algorithm, the claim should be limited in scope to a particular technological field of use.  This decision seems to indicate that a claim, which is written in an attempt to cover all uses of a formula, will not be found to be directed to patentable subject matter.  To quote the Board, the claims should be “limited so as to avoid encompassing all practical applications of the mathematical algorithm in a field of use.”  The road map that the Board sets out for applicants also notes that the claims cannot encompass substantially all practical applications of the mathematical algorithm.  In referring to the Bilski opinion, the Board also noted that “a process claim involving undefined complex systems and indeterminate factors drawn from unspecified testing [is] not patent-eligible.”

I am not too sure about whether or not this decision will even matter in the face of the upcoming Bilski decision that should be coming from the Supreme Court soon.  As I mentioned above, I believe the decision is complimentary the Bilski decision that we have now, but there is really no telling what the Supreme Court will do with that decision.