On Monday, June 1, 2009, the United States Supreme Court granted cert. in Bilski v. Doll. This means that the last chapter on business methods and software has not yet been written, which could be good news or bad news depending upon your particular take. I have wondered out loud about allowing software patents as patentable subject matter, which I think is the right thing to do myself. If these patents are not allowable it should be as a result of lack of novely or because they embody obvious innovation. Regardless of what your take is on the debate, what is certain is that the same Supreme Court that managed to get KSR v. Teleflex horribly wrong will now also dip its toe into the business method and software debate. Lets hope they understand the issues in Bilski better than they did when they through out the objective test for obviousness in favor of a “common sense” approach that gets implemented on a case by case basis without even the hint of objectivity.
On October 30, 2008, the United States Court of Appeals for the Federal Circuit issued its much anticipated decision in In re Bilski. The question that was presented by this case was whether a purely mental process is patentable subject matter. The Federal Circuit, however, decided to address whether software patents are patentable subject matter. We had been expecting a far reaching decision that dealt a blow to business method patents, but few really expected just how far reaching the decision would be and that it would call into question thousands of software patents granted over the last 10 to 15 years.
While the Federal Circuit did not rule that software cannot be patented, what they did rule no doubt substantially changed the law that has prevailed over the last 10 years and brought into question many software patents issued over that time frame, with many being no containing numerous invalid claims, and some patents containing only invalid claims.
Specifically, the Federal Circuit overruled the now famous State Street Bank decision, which in 1998 recognized that there was no reason to prevent the patentability of business method patents. If you read the decision of the Federal Circuit you will see in multiple places where the Court says that State Street has not been overruled, but that is quite frankly intellectually dishonest. Rarely, if ever, are cases actually overruled. The way a court will distance themselves is to explain that the holding and underlying reasoning that lead to a decision is no longer applicable moving forward. As long as they do not use the magic words “we overrule” then they can technically say that the case has not been overruled, but there is absolutely no other way to characterize what the Federal Circuit did here while still be intellectually honest.What the Federal Circuit did today, however, was to throw away the “useful, concrete and tangible result” inquiry. Here is what the Federal Circuit had to say:
- The useful, concrete and tangible result inquiry “is insufficient to determine whether a claim is patent-eligible under § 101.”
- “[W]e also conclude that the “useful, concrete and tangible result” inquiry is inadequate and reaffirm that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply. “
- Footnote 19: “[T]hose portions of our opinions in State Street and AT&T relying solely on a “useful, concrete and tangible result” analysis should no longer be relied on.
If the “useful, concrete and tangible result” inquiry is insufficient and inadequate to determine the existence of patentable subject matter under 101 then State Street has quite clearly been overruled, eviscerated, disregarded or whatever you would like to call it. The entire point of the States Street decision was the implementation of the “useful, concrete and tangible result” inquiry in order to determine whether an invention is patentable subject matter. Take that part out of State Street and all you have is the name of a bank on the heading of a defunct decision issued by the Federal Circuit in 1998.
As a result of the Federal Circuit decision in Bilski, there are easily thousands of patents that now have claims that may well be invalid if the new test for patentability is strictly applied, but many patents will remain because they have been written properly and have tied at least certain aspects of the invention to a system or apparatus. It does seems clear that the broadest claims are now lost in many, if not most, patents granted over the last decade that relate to software. After a quick review it would seem that the Bilski decision will have disproportionate impact on the IBM patent portfolio. In any event, here is a list to demonstrate some patents that are either lost or have suffered significant blows. There are many, many others.
All or most claims likely invalid:
- Quantization method for image data compression… US Patent No. 5,640,159 Issued June 17, 1997 Assignee: International Business Machines Corporation
- Method and computer program product for an online monitoring… US Patent No. 6,401,118 Assignee: Online Monitoring Services
- Web template processing utilizing dynamic rules… US Patent No. 7441,187 Issued October 21, 2008 Assignee: International Business Machines Corporation
- Computer program conversion and compilation US Patent No. 7,278,138 Issued October 2, 2007 Assignee: International Business Machines Corporation
Some claims likely invalid:
- Method and system for determining memory usage of a heap US Patent No. 7,444,484 Issued October 28, 2008 Assignee: International Business Machines Corporation
- Computer program product for utilizing fast polygon fill routines… US Patent No. 5,710,578 Issued January 20, 1998 Assignee: International Business Machines Corporation
- Method and system for managing forward link power control… US Patent No. 6,144,841 Issued November 7, 2000 Assignee: Nortel Networks Corporation
- Method and computer program logic… US Patent No. 5,987,118 Issued November 16, 1999 Assignee: MCI Communications Corporation
Thankfully, it does not seem as if Bilski has turned out to be the impediment to patentability that many feared, at least insofar as the Untited States Patent and Trademark Office is concerned. In fact, based on what is going on at the USPTO one could make a convincing argument that it is actually getting easier to obtain patents that relate to software and computer related processes. What my firm has been seeing is that claims can be made allowable by inserting “computer implemented” into claims, sometimes even in the preamble. It does not seem that is what the Federal Circuit intended, but it is what is happening at least in some cases. What the Supreme Court will do is anyone’s guess, but if recent past history is any indication the Supreme Court will not understand the issues and will make matters worse. I sure hope that trend stops here and now, otherwise a whole lot of US industry is going to be negatively impacted.