U.S. Supreme Court hears closely-watched patent case

Chris Rizo Nov. 9, 2009, 1:10pm

U.S. Supreme Court building

WASHINGTON (Legal Newsline)-The U.S. Supreme Court on Monday considered whether patent protections for methods of doing business should be expanded, in a case closely watched by the nation's technology industry.

The question before the justices in the case: Should U.S. patent protection be limited to inventions involving machines and transformative processes, or should patent law also protect business methods and software innovations.

The case involves an appeal by inventors Bernard Bilski and Rand Warsaw, who were seeking to patent a method for hedging weather-based risk in commodities trading.

The men specifically were seeking to patent a way to buy or sell energy at a fixed price based on a season's expected weather. Their company was a Pittsburgh, Pa.-based company called WeatherWise.

"Section 101 of the Patent Act provides patent eligibility for 'any' new and useful process. Consistent with its plain language, this court has interpreted § 101 to be extremely broad," their merit brief before the Supreme Court said. "Moreover, the courts should not place additional limits on patent-eligible subject matter that have not been expressed by Congress. To be sure, natural laws and phenomena can never qualify for patent protection because they cannot be invented at all. And abstract ideas are not eligible either because they are not 'useful' and they must be applied to a practical use before they can be patented."

The brief continued: "But the Federal Circuit has gone much further in limiting patents on processes, holding that the only patent-eligible processes are those that meet the court's mandatory 'machine-or-transformation' test."

The U.S. Court of Appeals for the Federal Circuit, which specializes in patent appeal cases, in October decided in an en banc ruling that their method could not be protected by patent because it was not tied to a machine and was too abstract.

Critics of the appeals court ruling say that the decision could fetter innovation in the fields of information technology and financial services, where methods are often complex.

Companies including International Business Machines Corp., Dell Inc. and Microsoft Corp., Google and Bank of America have filed amicus briefs in the case. In all, 67 friend-of-the-court briefs have been filed in the case.

The case is Bilski v. Doll, 08-964. A decision in the case is expected by the end of June.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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