Posts Tagged: "patentable subject matter"

At this time of the year all typically sit back and reflect on the year that has been, spend time with family and friends, watch some football and set a course to follow into the new year. So here are the top 10 events that shaped the patent, innovation and intellectual property industry during 2010 — at least according to me, and with a heavy patent emphasis. What did you expect?

United States Court of Appeals for the Federal Circuit issued a decision in one of the patentable subject matter cases that was returned to the Court by the Supreme Court in the wake of the Supreme Court’s decision in Bilski v. Kappos. On remand, once again, the Federal Circuit held (per Judge Lourie with Judge Rader and Judge Bryson) that Prometheus’s asserted method claims are drawn to statutory subject matter, reversing for the second time the district court’s grant of summary judgment of invalidity under § 101.

Like it or not, the patent system is a great motivator, and used appropriately to incentivize the type of behavior we want to encourage it is a powerful tool in the government arsenal. To fundamentally alter what is considered patentable subject matter will not only negatively impact cutting edge biotechnology research, but it will also have a chilling effect. Uncertainty causes business paralysis and forces investors to the sidelines. The uncertainty that would be created by the curtailing of patentability would not be isolated to the biotechnology sector, and is exactly the opposite of what our economy presently needs.

On Friday, October 29, 2010, practically on the eve of a national election that will in all certainty be an enormous rebuke of the Obama Administration and the Democrats’ agenda in general, the Department of Justice filed an amicus brief at the United States Court of Appeals for the Federal Circuit that would destroy the U.S. biotechnology sector. In an astonishing and irresponsible policy shift that directly contradicts the long-standing policy of the United States federal government and a variety of agencies, the Department of Justice is promoting the dialing back of what is considered patentable subject matter and is urging the Federal Circuit to rule that “isolated but otherwise unaltered genomic DNA is not patent-eligible subject matter under 35 U.S.C. § 101.”

Even a very conservative reading of the opinions indicates that the Justices intended to leave the status of software as patent-eligible subject matter unchanged, and for further refinements to be worked out by the lower courts and USPTO. A more liberal reading indicates an intent to enable the scope of patent-eligible subject matter to expand in light of technological developments. In either case, the decision in Bilski fails to provide patent examiners and defendants in patent cases with any substantial new ammunition for rendering software patent claims unpatentable or invalid for lack of patentable subject matter, and weakens the ammunition previously in their arsenals. Therefore, despite any ambiguities which may exist in the language of the decision, the practical effect of Bilski will almost certainly be to bolster the patent-eligibility of software both in patent prosecution and in litigation in the U.S.

This morning the United States Patent and Trademark Office published Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos. The Interim Bilski Guidance is effective July 27, 2010, and applies to all applications filed before, on or after the effective date. Most noteworthy is that the Patent Office is encouraging examiners to issue 101 rejection in only “extreme cases” and allow patentability to be decided by sections 102, 103 and 112.

Now that the Supreme Court has vacated and remanded both the Classen and Prometheus decisions, the Federal Circuit must revisit these issues. For Prometheus, the decision may be simpler, because the claims were already held to meet the machine-or-transformation test. Although the Supreme Court’s Bilski decision held that the M-or-T test was not the only test by which patent-eligibility can be determined, the Supreme Court seemed to have agreement from all nine Justices that the machine-or-transformation test was still a useful tool and valid option. See, e.g., Bilski, slip. op. at 2 of J. Breyer’s concurrence. Although a claim that does not meet the M-or-T test may still be patent-eligible under other theories, one can presume that the M-or-T test is still a “safe harbor” for claims that meet its provisions. The Federal Circuit’s re-visitation of Prometheus will be the first opportunity for this presumption to be tested.

Who knows what goes through the minds of anyone, let alone a cloistered Justice of the United States Supreme Court. What we do know, however, is that 5 Justices, namely Justices Kennedy, Roberts, Thomas, Alito and Scalia all agreed that business methods are patentable subject matter. All 9 Justices agreed that the Federal Circuit misread previous Supreme Court decisions when they mandated that the machine or transformation test be the only test for determining whether a process is patentable subject matter. All 9 Justices agreed that the Bilski application was properly rejected, with the majority agreeing that it was properly rejected because it was an abstract idea, and the concurring minority simply wanting to say that business methods are not patent eligible unless tied to an otherwise patentable invention (see Stevens footnote 40).

The Supreme Court held that the machine-or-transformation test is not the sole test for patent eligibility under §101, and that the Federal Circuit erred when it ruled that it was the singular test to determine whether an invention is patentable subject matter. Delivering the opinion for the Court was Justice Kennedy. There were no dissents, only concurring opinions, which is in and of itself a little surprising. In any event, Kennedy explained that the Federal Circuit decision ignored well established rules of statutory interpretation, and further explained that there is no ordinary, contemporary common meaning of the word “process” that would require it to be tied to a machine or the transformation of an article. Nevertheless, the machine or transformation test may be useful as an investigative tool, but it cannot be the sole test.

There is some irony that on the day we mark the 30th anniversary of the decision that launched the modern biotechnology industry we are still awaiting a decision on a patentable subject matter case — Bilski v. Kappos. Bilski has the potential to not only kill business methods, but also the software industry, the biotechnology industry and much of the medical innovation we see growing by leaps and bounds. So for today I toast the Supreme Court decision that launched the biotech industry, created millions of jobs and has lead to innumerable cures and treatments. I just hope that tomorrow (or whenever the Supreme Court issues its Bilski decision) it is not all for naught.

Last week when I wrote Broken Record, No Bilski for You Today, which was a fun combination of Soup Nazi meets LPs, I dangled the thought that perhaps the Supreme Court would not decide Bilski this term and might hold the case over. I said I refused to speculate at this point, but some of those commenting on that article asked me to engage in the speculation, as did others via e-mail and some that I have encountered in the industry since then. I still think it is unlikely that the Supreme Court will hold Bilski over, just because it is an extraordinarily rare occurrence, but with only two more decision days this term (i.e., Monday June 21 and Monday June 28), it seems appropriate to at least ponder the rare occurrence of the Supreme Court holding a case over, which the Court did in Marbury v. Madison and Brown v. Board of Education.

After 6 months and 15 days we still wait for a decision in Bilski v. Kappos, perhaps the most anticipated Supreme Court patent decision of all time. So, once again, it seems as if the patent story of the day will be the one that never materialized. The difficulty the Supreme Court is facing is in all likelihood this: how do they kill the Bilski patent application as being unpatentable subject matter without also killing the US economy. A decision that is too broad not only could put an end to the pure business methods akin to the Bilski “invention,” but could also put an end to the patentability of software, business methods and medical innovations. Thus, it is hardly an overstatement to observe that the Bilski case, if decided improperly, could destroy an already fragile US economy and set back medical research decades.

You just couldn’t make this stuff up. A team of humans creates genetically altered and a self-replicating synthetic cell using a computer. I suspect that computer was running some pretty powerful and sophisticated software. So the anti-patent crowd should be sufficiently whipped into a frenzy over this story top to bottom. It hits all the hot button issues, life, genetics, software, ethics and it rolls them all into one. But while we might relish the anguish of those in the anti-patent community, this type of scientific advance should not be taken lightly because it has the potential to fire up those with an anti-patent agenda and could also fire up religious groups as well. The coming together of such strange bedfellows would result in an alliance with enormous political power. So innovators need to pay attention and be vigilant.

Today the United States Supreme Court issued four decisions, and none of them were Bilski v. Kappos. If you look back at the lag time between oral argument and decision over the last 17 Supreme Court patent decisions the average is 2.82 months. KSR was 5.07 months and as of today Bilski is 6.29 months. Does this mean Bilski will be more earth shattering than KSR, which is the biggest patent decision of at least the last generation?

There are few things in this world that irritate me more than hypocrisy. Did you know that since 1976 Duke University has had 716 issued US patents, 266 of which in some way, shape or form relate to genetics and 156 of which relate in some way, shape or form relate to both genetics AND cancer. While Duke University throws Myriad Genetics under the bus over its patents on the BRCA1 and BRCA2 genes tied to breast and ovarian cancer, Duke has its own patent on identification and sequencing of the BRCA2 cancer susceptibility gene. How convenient!