July 20, 2010
THE ROADMAP TO THE SUPREME COURT FOR BERNARD BILSKI
Many of my clients have been following the Bilski case. As our readers know, the case of whether or not a method for hedging risks in commodities trading was recently decided by the U.S. Supreme Court (see our updates here, here and here). The Supreme Court decided that Mr. Bilski’s “invention” was not directed to patentable subject matter. But how, you ask, did the question of whether or not Mr. Bilski’s invention was patentable get all the way to the United States Supreme Court? Shouldn’t these matters normally be decided by the U.S. Patent Office? Allow me to step you through the road map on how a patent applicant can find themselves before the United States Supreme Court arguing that the Patent Office, and everyone up to that point, is wrong about their invention.
The patent process begins with a spark of genius, i.e., coming up with your invention. The prudent inventor writes their invention down in an inventor’s log (try using a notebook that cannot have pages torn out of it). After the inventor gets their invention down on paper (or otherwise reduces the invention to practice), a search is in order. A great place to start your search is at www.google.com/patents. If you hit a brick wall, i.e., you cannot find anything close to your invention out there, then talk to a patent attorney and have a search done. It is highly unlikely that there is absolutely nothing out there like your invention. There is normally at least something related out there. After you have found the closest prior art, read it in detail, and point out the differences between the prior art and your invention. These are points of novelty that will form the basis of your patent protection.
At this point, it seems as though you are ready to file a patent application. Go to a patent attorney and see which patent application is right for you (see my previous posts on the right patent application for you here). Let’s assume that you have filed a utility patent application including claims directed to your invention. The claims of a patent application are the most important thing. Claims can equate to a property description. They lay out the boundaries of your protection and serve as the club with which you will later beat infringers or command a high licensing fee.
We are the gatekeepers of all invention!
Patentability is initially determined by the Patent Office through an initial opinion issued by a Patent Examiner in the form of an Office Action. It is not uncommon for an initial Office Action to be in the form of a rejection of all the claims that you have filed. The rejection is not the end of the world. When filing your application, you should have drafted some broad claims in an attempt to seek as much protection as possible. Similarly, the Examiner will likely read prior art references broadly and use them to reject your claims.
After receiving an Office Action, you will engage in a “negotiation” process with the Examiner. You will attempt to either amend your claims to narrow the scope somewhat, or argue that the prior art cited by the Examiner does not read on the invention as recited in the claims. In Mr. Bilski’s case, those arguments were futile, and the Examiner issued a Final Office Action. Your option at this point is to file a response to the Final Office Action, file a Request for Continued Examination (RCE) or appeal. An RCE starts the examination process over again and, in short, gives you another bite at the apple.
Mr. Bilski filed an appeal of the Examiner’s decision. An appeal of an Examiner’s decision is heard at the Board of Patent Appeals and Interferences (BPAI). The initial step is to file a notice of appeal and an appeal brief. The Examiner, in turn, files a response brief. The briefs are reviewed by a group of Examiners prior to going to the BPAI. Often times, issues are resolved at that level, but not in Mr. Bilski’s case. If you do not like the decision of the BPAI, then your option is to appeal to the United States Court of Appeals for the Federal Circuit (CAFC). This is the first step that the inventor has taken outside of the Patent Office.
This is truly a legal proceeding. At the CAFC, the inventor will file an appeal brief, and the Patent Office will file an answer brief. The case will initially be heard by a panel of three judges who will hear the inventor’s arguments and the Examiner’s arguments. The CAFC will issue a decision either upholding the Examiner’s decision, overturning the Examiner’s decision, or sending it back to the Patent Office with some instructions on how to further examine the case. In Mr. Bilski’s case, the CAFC upheld the Examiner’s decision and noted that Mr. Bilski’s invention was not patentable. The game did not end there, however. Off we go into extra innings (as I’m typing this I’m watching the Phillies/Cubs game).
Since Mr. Bilski was obviously dissatisfied with the decision of the three judge panel at the CAFC, he then requested a rehearing before the CAFC en banc, meaning that all the judges of the CAFC should hear the case. It was the decision of the en banc CAFC that gave us the “machine or transformation” test. As noted in my previous post, the en banc CAFC held that Mr. Bilski’s invention was not patentable because it did not meet the machine or transformation test.
The case didn’t end there, however. Mr. Bilski, and much of the patent community, was not satisfied with the en banc CAFC test as it had ramifications in many industries, and essentially did away with business method patents. The next step was to appeal this decision to the United States Supreme Court. The parties filed their respective briefs were filed, and several third parties filed amicus briefs (as was also the case at the CAFC) putting forth various points and opinions for both sides. After the Court took into consideration the briefs filed by both sides, as well as amicus briefs, they eventually handed down the decision that is before us today.
Clearly it was a long road for Mr. Bilski, and quite the dissatisfying one, but as a patent practitioner, I sure am glad he stuck with it. His decision to take this case to the High Court brought to the forefront the issues that have been plagued the Patent Office for years, i.e., are business methods patentable and are software inventions patentable. The answer to both is yes, but that came along with some more questions. I’ll be back soon with some more analysis about these issues.
July 12, 2010
BILSKI IS FINALLY DECIDED AND NOW WE HAVE SOME REAL QUESTIONS
As many of you already know, the United States Supreme Court has finally handed down its decision in the case of In re Bilski (Decision). For some background on the Bilski case, please see my previous posts here and here. The Court of Appeals for the Federal Circuit held that Mr. Bilski’s invention was not patentable. In doing so, the Federal Circuit essentially did away with business method patents and pronounced the “machine or transformation” test for patentability.
The Bilski Patent Application has Died
The Supreme Court affirmed the Federal Circuit’s decision with respect to Mr. Bilski’s patent application, i.e., his invention is not patentable. Mr. Bilski’s invention relates to a system for hedging risks in commodities trading. Although the Supreme Court noted that the Federal Circuit’s decision was too restrictive, the Court still held Mr. Bilski’s invention to be unpatentable. More specifically, the Court held that Mr. Bilski’s claimed invention fell into one of the three specific exceptions to §101 of the patent statute, finding that it was an abstract idea. The other two exceptions are laws of nature and physical phenomena.
In holding that the “machine of transformation” test is not the only test of patentability, the Supreme Court noted that the Federal Circuit erred by violating two principles of statutory interpretation: Courts should not read into the patent laws limitations and conditions which the legislature has not expressed and that unless otherwise defined, words will be interpreted as taking their ordinary meaning. Since Mr. Bilski’s invention was defined as a “process” the Court held that there is no meaning of process that would require Mr. Bilski’s invention to be tied to machine or to transform an article.
Finally, the Supreme Court held that the term “process” does not exclude business methods as being patentable. The Court specifically noted that it is not clear whether a business method exception would exclude technologies for conducting a business more efficiently. Of course, that raises many questions for inventors and patent practitioners across the board. It seems to me that it would be impossible to write a patent application that was not tied to machine or apparatus without it being an abstract idea. After all, is that not what Mr. Bilski was trying to do? The court does note that while §273 of the patent statute appears to leave open the possibility of some business method patents, it does not suggest broad patentability of such claimed inventions. Therefore, the Court just let us all know that if you can somehow get a business method through the PTO, it had better be very narrow. I suppose you have to question the value of such a patent, i.e., is a patent that can be very easily designed around very valuable? In many cases, the answer can certainly be yes, but it is something that needs to be analyzed during the patent prosecution process.
Probably the toughest part to swallow about this decision is that the debate over business method patents and, more than likely, software patents, is far from over. This is evident in the last paragraph of the syllabus when the Court invites the Federal Circuit to develop other limiting criteria that further the Patent Act’s purposes and are not inconsistent with its text. At the end of the day, this decision likely created more questions than answers, but at least we know that patent litigators will still be busy over the next few years trying to flush out that which is still patentable. Stay tuned for some follow up articles on how the Patent Office is handling this decision.
May 25, 2010
My Bilski Prediction
The United States Supreme Court recently heard the case of In re Bilski in which the court was asked to make a determination of what is and what is not patentable subject matter. For more information on the original holding by the Federal Circuit, please check out our previous post. For some information on the oral arguments at the U.S. Supreme Court, please check out our Bilski Part Duex post. The Bilski patent application was rejected by the PTO for failing to meet the requirements of 35 U.S.C. § 101, i.e., the PTO held that the invention was not directed to patentable subject matter.
Me at the Supreme Court. (I'm the shorter one.)
The opinion might come out here in the next week or two, so I just want to get my prediction on the record. In short, the court will hold that the subject matter of Bilski’s patent application is not patentable. The reasons why they find it unpatentable, of course, is what the patent world will be waiting for. The implications for many different industries can be huge. Although I realize that this has some implications in the pharmaceutical industry, my main focus is software. When the Supreme Court gets through with this case, will software still be patentable? Will they uphold the rule of law set forth by the Federal Circuit (machine or transformation test)? Will there be a new test that the Supreme Court enters that will have an effect on the way we have drafted our claims for the past couple of years?
January 3, 2010
New Precedential Software Decision from the Board of Patent Appeals and Inteferences
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).
November 23, 2009
Bilski Part Deux: Hilarity Ensues During Supreme Court Oral Arguments
Last week we reported that the Supreme Court heard oral arguments on In re Bilski. Since the Bilski case can have some major ramifications on determining the types of patentable subject matter, we wanted to take a deeper dive into what was actually discussed at the hearing. What we found was that the Supreme Court Justices presented several entertaining scenarios during the oral arguments.
At issue in this case is whether a system for hedging risks in commodities trading is patentable subject matter pursuant to 35 U.S.C. § 101. This decision may have a profound effect on software inventions, business method inventions and pharmaceutical inventions, mainly because these inventions generally lack structure elements, i.e., these are not machines with big moving parts that one can lay hands on. Instead, these inventions can generally be defined as a set of steps that must be followed in order for the invention to be carried out.
November 16, 2009
What is Patentable? A Brief Background on Bilski and Where We Are Now.
Oral arguments before the United States Supreme Court In re Bilski were held on November 9, 2006. This case has been closely watched by the patent community because it can have some serious ramifications as to the type of subject matter that is patentable. The patent application filed by Bernard Bilski and Rand Warsaw is directed to a method of hedging risks in commodities trading. The Examiner issued a final rejection, noting that the invention was not directed to patentable subject matter, pursuant to Section 101 of Title 35, United States Code. Pursuant to 35 U.S.C. § 101, to be patentable, an invention must be directed to a “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”
The Applicants appealed the Patent Office’s decision to the Federal Circuit. The en banc Federal Circuit upheld the PTO’s decision and noted that patentable subject matter does not include “laws of nature, national phenomena, or abstract ideas.” The court went on to reiterate the “machine or transformation test” with respect to patentability. More specifically, patentable subject matter must be tied to a particular machine or apparatus, or it must transform a particular article into a different state or thing. Using that test, the Federal Circuit found that the method of hedging risks in commodities trading did not meet the requirements for patentability.
