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Supreme Court on patents: "less than pellucid"
'Net Insider By Scott Bradner,
July 07, 2010 03:48 PM ET
The U.S. Supreme Court was handed an opportunity to clarify one of the persistent areas of confusion in U.S. patent law: just what can be patented? But the justices seem to have not been able to agree on a clear, or any, rule so they left it to future lawyers to argue it out at great expense to future inventors and companies.
The justices agreed that Bernard L. Bilski could not patent his formula for hedging one's bets against the risk of price changes because it was an "abstract idea," which by previous definition, is not patentable (read the decision here.). There was little question among legal observers that this would be the result, so it is a puzzle as to why Belski chose to pursue the case. But pursue it he did.
The justices also all agreed that the "machine-or-transform" test that the Federal Circuit Court had designated as the only true test of patentability was not.
It looks like four of the justices, led by retiring Justice John Paul Stevens, would have flatly said that "a claim that merely describes a method of doing business does not qualify" as patentable under U.S. patent law. But that was not enough justices to carry the day, so the majority opinion left "open the possibility that there are at least some processes that can be fairly described as business methods that are within the patentable subject matter under [U.S. patent law]."
As was been repeatedly detailed during the recent hearings for Supreme Court nominee Elena Kagan, the court is not supposed to decide what is right or wrong. It is supposed to decided what the law says and if the law is permissible under the Constitution. Thus the court is a hostage to the law writing skills of Congress. I'll leave it as an exercise for the reader to ponder if this is an area in which Congress has shown much expertise.
The law itself reads: "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore..."
The word in question for Belski, and in business method patents, is "process." Previous court decisions have articulated some limits on the meaning of process. Under these decisions, "laws of nature, physical phenomena, and abstract ideas" are not patentable because they are not "new and useful."
In the end, this court punted and said "the Court today is not commenting on the patentability of any particular invention." The court also noted that "the patent law faces a great challenge in striking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of general principles." It went on to say "nothing in this opinion should be read to take a position on where that balance ought to be struck."
This decision was an opportunity wasted. Stevens described the decision as "less than pellucid (clear)." The court basically told another court (the Federal Circuit) that the patentability test it had developed was not good enough but that the Supreme Court would not say what test would be. In the end it was a full employment act for patent lawyers.
Disclaimers: I expect that Harvard law had, in the common phrase, dogs on both sides of this fight. But I know of no university opinion on the decision and, while I do hire out as an expert in patent cases, the underlying patentability of business methods is not something I have been asked to opine on.
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