Bilski v. Kappos

  • November 10, 2009
    Guest Post

    By Joshua D. Sarnoff, professor and associate director, Glushko-Samuelson Intellectual Property Law Clinic, Washington College of Law, American University. Professor Sarnoff also blogs at InherentlySarnoff, where the article is cross-posted. Professor Sarnoff also authored an amicus brief in Bilski, which is available here.

    Here are my thoughts on the Bilski v. Kappos oral argument held yesterday, which is better informed by also having watched Pamela Samuelson, John Duffy, Kevin Collins, and John Whealan discuss the argument late yesterday afternoon at George Washington University. The argument was fascinating, and the Justices were very well prepared and were a very hot bench (particularly Justice Sotomayor).

    Surprisingly, but from my perspective happily, Justice Scalia focused very early into the Petitioner's argument on the "useful arts" language from the Constitution (or on similar language from early patentable subject matter statutes -- "new and useful art" -- as Justice Scalia did not explicitly reference the Constitution) and whether patent eligible inventions must fall within manufacturing and similar industries. Michael Jakes did a very good job responding - and holding his ground when pushed under substantial questioning from many Justices to define a limit to what qualifies as patent eligible - by adverting to examples of patentable business inventions from his brief and reasons why "technologies" have and should continue to be viewed broadly and why the patent system is not limited to traditional industrial inventions. Jakes to his credit (and as a testament to zealous advocacy on behalf of a client with a possibly losing position) also refused to provide any helpful response to the Justices when pressed to offer a fall-back position in case his basic position was rejected. This was particularly notable in his responses to Justice Breyer's repeated requests for more guidance, after Justice Breyer clearly signaled that the Court might not agree that patentable subject matter is as broad as Jakes was arguing. Justice Roberts also pressed Jakes on the issue of why Claim 1 was not merely an abstract idea, and Justice Stevens pressed Jakes on the difference of the claim at issue from that in Diehr (particularly in regard to its physicality). Jakes made clear why he believed his clients' claim was both practical and physical, focusing in particular on the step of entering into transactions. He also articulated why his clients are entitled to have their claim reviewed on the other patentability criteria, although some of the Justices may believe that the claim also may not be new or at least is obvious. Although his clients' invention provided little in the way of physicality like that of traditional industrial processes, Jakes nevertheless presented a strong (maximalist) approach to patentable subject matter to justify treating the invention as potentially eligible, the scope of which appeared to be limited only by the Court's historic, articulated exclusions for science, nature, and abstract ideas (understood narrowly but applied to all four categories of statutory subject matter, i.e., processes, machines, manufactures, and compositions of matter). Thus, when pressed by Chief Justice Roberts, Jakes argued that an alphabet could be patented, which led to an unproductive exchange with Justice Sotomayor about Morse's code claim, which was in fact found patentable as Jakes articulated but which raises unanswered questions of claim interpretation regarding how closely "tethered" that claim was to Morse's apparatus. This argument may not have been the best strategic choice by Jakes, as his clients' position could readily have been sustained without trying to uphold alphabet patents. Curiously, Jakes also argued that the Bell telephone patent would not pass the Federal Circuit's transformation test, which led to an unproductive exchange with Justice Scalia about whether the Bell telephone patent involved a physical transformation (of sound into electrical signals and back again). Jakes also conceded (at no cost to his clients' position) that mental processes and data (by itself), literature and fine arts are not patentable subject matter.

  • November 9, 2009

    The techtonic plates underlying Congress's system of incentives encouraging American ingenuity are rumbling at the U.S. Supreme Court this afternoon. As stated by IPWatchDog founder Gene Quinn, "the fate of much future innovation rests squarely on the Supreme Court getting this one right."

    In Bilski v. Kappos, the Court faces the task of defining the scope of patentability under the U.S. Patent Act. Specifically, the issue is whether a process is patentable which is not tied to a machine and fails to physically transform some material.

    The litigant's invention in Bilski is a business process permitting users to hedge against risks of price shocks in comodities markets. Here's one example of the invention's use provided by petitioners: "A school district with a fixed tax base and budget for heating or cooling requirements can be protected from yearly fluctuations in weather, while the suppliers are protected from the opposite effect of such fluctuations."

    So, relying on a series of complex mathematical formulas, the process moderates the risk of price fluctuations for raw materials. The process is tied to no machine, however, and also fails to transform any tangible material -- requirements of patentable processes under the "machine-or-transformation" test applied by the U.S. Court of Appeals for the Federal Circuit.

    Both sides agree that reverberations from the Court's Bilski decision will be considerable. Proponents for the petitioner, who is seeking to have his business process patented, argue that failing to permit patents for business processes ties patent law to the industrial age of machines and manufacturing and would discourage innovation in the digital age. Adherents to the machine-or-transformation test, however, assert that Bilski's invention is nothing more than an abstract idea like the Theory of Relativity -- a mere statement of fact or natural occurrence which cannot properly be the dominion of any one person.