My Bilski Prediction

by Mark Malek

The United States Supreme Court recently heard the case of In re Bilski in which the court was asked to make a determination of what is and what is not patentable subject matter.  For more information on the original holding by the Federal Circuit, please check out our previous post.  For some information on the oral arguments at the U.S. Supreme Court, please check out our Bilski Part Duex post.  The Bilski patent application was rejected by the PTO for failing to meet the requirements of 35 U.S.C. § 101, i.e., the PTO held that the invention was not directed to patentable subject matter.

Oral arguments in the case were held in early November 2009.  We all expected a ruling already, but there has not been one yet.  I suspect that a ruling is coming out soon.  As a side note, I was at the US Supreme Court at the beginning of the month, and they read two opinions.  Just to tell you how much of a geek I am, I got really excited thinking that one of the opinions might be Bilski.  No such luck.

The opinion might come out here in the next week or two, so I just want to get my prediction on the record.  In short, the court will hold that the subject matter of Bilski’s patent application is not patentable.  The reasons why they find it unpatentable, of course, is what the patent world will be waiting for.  The implications for many different industries can be huge.  Although I realize that this has some implications in the pharmaceutical industry, my main focus is software.  When the Supreme Court gets through with this case, will software still be patentable?  Will they uphold the rule of law set forth by the Federal Circuit (machine or transformation test)?  Will there be a new test that the Supreme Court enters that will have an effect on the way we have drafted our claims for the past couple of years?

Bilski’s patent application was directed to a method of hedging risks in commodities trading.  The issue here is that the Examiner found that the steps involved in the method could all be carried out in the head of the user, i.e., no machine was used to carry out the method associated with assessing the risk of commodities trading.  Accordingly, the Federal Circuit instituted the machine or transformation test.  That is, patentable subject matter must be directed to a new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.

Although our firm has had much success prosecuting software patent applications in the post Federal Circuit / pre U.S. Supreme Court Bilski era, one wonders how things will change, if at all, after the U.S. Supreme Court issues their ruling.  I do not think that things will change much for the software industry.  I know that there is a raging debate as to whether or not software should be patentable, but let me advocate for patentability for just a second.  I think that in this day and age, software can be a useful tool that helps people carry out so many different tasks.  Just from an organizational perspective alone, it is impossible to even imagine what things used to be like without all of the innovations that have been brought about via software.  With that in mind, I believe that those innovations should be rewarded, and that the innovators should be allowed to reap the benefits of their innovation.  Since most of their innovation lies with the function of their invention, the only effective way to provide valuable protection is through our patent system.

Not all software is patentable, and I do not think that all software should be.  Of course, software does not differ from any other type of invention that may be protected by a patent.  As such, it is important to understand that just because an invention clears the hurdle of 35 U.S.C. § 101, i.e., usefulness, does not necessarily mean that it clears the remaining requirements of patentability.  In other words, any software invention must still be novel and must not be obvious.

I do not think that the U.S. Supreme Court will preclude patentability of software.  Instead, I believe that whatever test the U.S. Supreme Court comes out with will be close in scope to the test set forth by the Federal Circuit.  I am unsure of whether or not the test will be a bit more narrow or a bit more broad, but my gut (and it’s a big gut) tells me that the test will be a bit more narrow.  Also, I do not expect that we will be getting a unanimous decision.  There will probably be one or two dissenting opinions and at least one concurring opinion.  What else could be taking so long to get this opinion out???  Stay tuned for an update once the case comes out.