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.
October 9, 2009
Why are patents so important?
Patent rights are derived from the U.S. Constitution. Many people mistakenly call patents rights a monopoly, but that isn’t exactly accurate. Patent rights are not a true monopoly, as the Government does not grant you a right to make something. Instead, the right granted allows the patent holder to exclude others from making, using, selling or offering to sell the invention that is protected by the patent. In most cases, i.e., utility patents, that right lasts for 20 years from the date the application is filed. For simplicity, I will not get into the patent term adjustments or other patent rights that may not last as long as the utility patent rights, e.g., design patents.
The patent system is intended to reward innovation. Any inventor out there that has tried to bring their product to market knows how long it takes and the cost involved in bringing their invention to market. Even the simplest of inventions can cost tens of thousands of dollars to bring to market. This is true when it comes to mechanical inventions, but especially true in the pharmaceutical industry. We always hear critics that vilify the pharmaceutical companies say that their drugs shouldn’t be so expensive because it only costs a penny to make each pill. That’s not exactly accurate. Sure, pill number 2 – 10,000 only costs a penny each, but that first pill had a cost in the millions (and sometimes billions) in research and development costs. An often-cited research study on the subject put the number north of $800 million in 2003. Shouldn’t any inventor that has put forth the time to develop their invention be allowed to recover their costs and profit from their innovation without others merely copying them? The answer to that question is obvious.
