Defining Software and Business Process Patents

Wayne Rash

The attorney for Bernie Bilski and Rand Warsaw, the inventors of a method for hedging energy pricing who took their patent application all the way to the Supreme Court, said they might amend their claims and try again to patent the process.

According to Atlanta patent attorney Jeff Kuester of the firm Taylor English, who represented Bilski and Warsaw in their appeal before the Supreme Court, the high court has opened the door to a more flexible interpretation of patentability than the Federal Appeals Court for the Federal Circuit did when it turned down the Bilski patent application.

'I have mixed feelings about it,' Kuester said, referring to the decision by the Supreme Court that upheld the Circuit Court's decision that Bilski's idea wasn't patentable. 'I am disappointed that the inventors' claims were found not patentable. I'm pleased that the court broadened the rule for patent eligibility that the Federal circuit had applied.'

Kuester said he believes the decision opened the door to business process inventions and similar inventions of techniques that will encourage innovations in areas that had been held back to some extent while the Bilsky patent made its way to the Supreme Court, where the decision was announced on Monday.

The case, Bilski v. Kappos, resulted in the Supreme Court finding that the invention by Bilski and Warsaw wasn't patentable, but it also rejected the test for patentability that any invention had to be for a machine or a process that transformed an object. This machine-or-transformation test, as it came to be called, had effectively ended patents on processes including software-based processes. The Court, in rejecting that as the only test, made it possible for other tests for patentability to be applied. The court, however, did not actually propose any such tests.

 'I was surprised they didn't try to put their fingerprint on the debate in a more assertive manner,' Kuester said. 'I thought they'd try to say more about what the tests ought to be. I'm pleased they didn't.'

Kuester said, as have many others, that the machine-or-transformation tests will simply mean that inventions that had been developed as business processes may be presented so that they meet that test. This might mean, for example, that the business process could be embedded into a computer. But Kuester also thinks new cases will arise that will attempt to establish new tests for patentability.

'We will see cases fairly soon,' Kuester said. 'There are often arguments in pending cases that are presented very quickly after decisions of this magnitude.' Kuester said he thinks the
Supreme Court may wait a while before it takes another case to clarify the issue, assuming it wants to clarify. He noted that the Supreme Court may not feel that it wants to add anything to the guidance for the Circuit Court, if the lower court takes the guidance offered and eases up on the patent restrictions.

The question, of course, is whether the decision really solves any problems regarding software and business process patents. On one hand, it does tell the lower courts and the Patent and Trademark Office that such things can be patented. On the other hand, it offers little guidance beyond that. Ultimately, this means that the type and nature of any tests of patentability will have to be worked out in the lower courts, and that means years of uncertainty.

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