New Patent Test for Machines Using Mathematical Algorithms

(MoneyWatch)  Industries, particularly high tech, may be waiting for the U.S. Supreme Court decision, expected this coming spring, in the Bilski case to decide some fundamental questions of when you can patent business methods. But in the meantime, there's a newly published decision from the Board of Patent Appeals and Interferences that establishes a new test to determine whether a machine or manufactured article that depends on a mathematical algorithm is patentable. The ruling is a big deal because it's one of the few precedential decisions that the BPAI issues in a given year, and it will have a direct impact on patents involving computers and software.

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

1. Is the claim limited to a tangible practical application, in 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 to not 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.

Although the decision came out in August, it wasn't until this month that it became precedential, and so applicable going forward to other patent cases. As the decision notes, what this does is provide permission for patent examiners to use this test a new ground for rejecting a patent application. And you can bet that patent attorneys in the software field will be pouring over this. The BPAI rejected the patent in question in the decision as not connected to any "tangible practical application" and encompassed too many applications because it was pretty generally calculating a "mean" (or average) item out of a group. The question for software and hardware companies is exactly what would it take for a patented invention to be practical and specific enough to pass muster? And given that the Supreme Court is planning to rule on the Bilski case, which has the business method patentability issue at its heart, will this test ultimately matter?

Gavel image via Flickr user Thomas Roche, CC 2.0.