SCOTUS kicks for touch on business method patents
The US Supreme Court has released its long-awaited Bilski decision involving business method patents. Many commentators had hoped that the case would provide a definitive statement on the patentability of business methods, and possibly other subject matter such as software patents, compression techniques and biotechnology. Instead, it seems the court has kicked for touch – or “taken a knee” in the American equivalent, I am informed.
The court ruled that the “machine or transformation” test was not the only criteria for determining patentability, but that there should not be “broad patentability” of business methods. Lower courts could continue developing limiting criteria. It upheld the lower court’s decision to reject Mr Bilski’s attempt to patent a method of financial hedging. But it left many questions, and some confusion, by not giving clear guidance on what’s patentable and what’s not.
Some comments:
The practical effect of the Bilski ruling will be limited, lawyers said, but it will definitely mean more lucrative patent litigation.
There were high hopes that the Supreme Court would clear things up in the mushy, litigation-filled realm of patents on methods of doing business. [Bilski] was anything but a landmark decision. Still, there was a clear message for patent trolls, patent brokers and licensing companies, patent lawyers and lobbyists: Play on!
“The court is certainly not shutting the door on business method patents, as some thought it might,” said Josh Lerner, a patent expert at the Harvard Business School. “This preserves a fair amount of ambiguity.”
Although not rejected by the majority opinion, it is clear that the broad “useful, concrete, and tangible result” test is dead. That test is conclusively rejected by what I term the Anti-State-Street Majority — a majority created by the combining the two concurring opinions in Bilski and their five-justice majority. The result is that the scope of patentable subject matter is certainly narrowed from its 1998 high-water-mark.
So, the long-awaited US Supreme Court ruling on Bilski vs. Kappos has appeared – and it’s a mess. Where many hoped fervently for some clarity to be brought to the ill-defined rules for patenting business methods and software in the US, the court instead was timid in the extreme. It confirmed the lower court’s decision that the original Bilski business method was not patentable, but did little to limit business patents in general.
AP:
Scott Bain, lawyer for The Software & Information Industry Association, said the decision “preserves a delicate but important balance.” “It keeps the door closed to patenting mere abstract ideas, which many ‘business method’ patent applications have been,” he said. “But just as importantly, it affirms the continued viability of patenting useful software applications, which will allow software companies to continue in their role as a driver of economic growth.”
For those who were looking to the Supreme Court to provide clarity on a contentious issue, however, the court’s limited ruling was a bitter disappointment. “The decision is incredibly unhelpful,” says Steven Bauer, head of litigation at the law firm Proskauer Rose in Boston, Massachusetts. “Nothing in their decision can be used to decide what’s patentable or not.”
The decision had potential ramifications for New Zealand companies who have (or hope to get) business method patents. If such patents were unavailable in the US, the value of having them in NZ and other countries could be somewhat undermined. Unfortunately, though, the recent New Zealand patent law review also didn’t address business method patents in much detail, and it will probably be many years, if ever, before the NZ Appeal Court or Supreme Court hears a similar case. The net result for all is the status quo, and business method patents will remain murky for some time.
It also will not affect the ongoing software patent debate in this country, which is also somewhat up in the air.
