Opposition in Bilski Targets Business Method Patents Test

(MoneyWatch)  Business method patents have been a contentious issue, with some saying that they're necessary for software innovation and others claiming that they prevent innovation. The Bilski case, which will be hear by the Supreme Court, is bring up the issues, and chances are that there could be some significant shake-ups.

Bilski's particular patent aside, there seem to be two major issues that would be of interest to tech industry people. One is the issue of whether business method patents should be allowed at all. Given that the Supreme Court in the State Street Bank v. Signature Financial Group case in the 90s explicitly recognized the validity of business method patents, it seems unlikely that the court would now see business method patents as invalid.

The other issue is the so-called machine or transformation test for patentability that became the center of some argument during the Bilski hearing before the Court of Appeals for the Federal Circuit:

In a decision that is expected to have a significant impact on patent lawsuits and applications involving business methods and other subject matter areas, on October 30, 2008, the Court of Appeals for the Federal Circuit issued its en banc decision in In re Bilski, No. 2007-1130 (Fed. Cir. Oct. 30, 2008). The Federal Circuit focused on U.S. Supreme Court precedent and stated that the proper test for patent-eligibility of processes is a machine-or-transformation test. Under the machine-or-transformation test, "[a] claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing."

The problem for software, and a great many devices that incorporate CPUs and use software to create distinguishing characteristics. The distinction of the machine is not there, so thing fall into the issue of transforming an article. That's a lot of room for ambiguity, which is not what you want to hear when you are spending all that money to file a patent. Even many companies and individuals supporting the concept of patenting software are not fond of the test.

For a summary of the arguments pro and con in the many briefs filed, the best thing I can do is point readers to the Patently-O blog, in which Dennis Crouch covers briefs supporting the USPTO's position in the case, and those supporting Bilski or neither side.

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