An Important Patent Law Precedent Approaches

The SFLC and I recently filed a brief in Bilski v. Kappos, along with plenty of other lawyers, and I gave a talk about the case, and the future of patent law, this morning at Cardozo Law School. The outpouring of amicus briefs in this case, which will be heard by the Court on November 9, must be particularly noticeable to the Justices and their law clerks: a stack of dozens of third-party briefs seeking attention would have been the lunchtime talk of that inner core of the Court back when I worked there, and I'm pretty sure that hasn't changed. A high stack of amicus briefs -- which we called "greens," for the color of the cover in which the Court requires they be bound -- means people outside the Supreme Court think the case is important. Bilski is very important indeed. The Supreme Court and Congress must soon begin shaping patent law for the 21st century. In Bilski, the Supreme Court has an excellent place to start.

Patents used to be given only for products that could be delivered in a box. The Constitution authorizes Congress to give "Inventors" limited-term exclusive rights, but the inventions the founding generation had in mind were physical products of manufacture, like a sewing machine, a cotton gin, or a revolver. Only in 1953, after the industrial transformation of the American economy was long since complete, did Congress amend the Patent Act to permit "process" as well as "product" patents. Within decades of the change, patent law was being used for purposes that Congress had plainly not envisioned in 1953. "Process" patents were being granted on computer programs and methods of doing business using computers to do what used to be done by human beings.

We live now not in an industrial, but in a post-industrial information economy, where complex services combining human and machine intelligence -- finance, pharmaceutical discovery and development, business process software -- are protected by patents just as complex products combining human intelligence with physical processes mobilizing matter--geochemical discovery and development, metallurgy, structural engineering--characterized the industrial economy.

But patent law cannot award ownership of facts of nature, or mere mental activities, or algorithms: the US Supreme Court has been unambiguous on that point for more than 150 years. For the last 20 years, the US PTO and its supervising appellate court, the Court of Appeals for the Federal Circuit, have been granting patents for inventions consisting of software, or business methods enabled by software. Then, in a series of recent opinions, the Supreme Court began signalling discomfort with the state of patent law, "tightening up" on the requirement that an invention be non-obvious to be patentable, and even intimating that the patentability of software was an open question.

So the PTO and the CAFC have moved to rein in the absurdities that characterized yet another bubble of the Second Gilded Era: the patent bubble that cost consumers around the world so many hundreds of billions of dollars. Mr Bilski and Mr Warsaw, like so many other disappointed investors just now, were a little too late at the window where you could get the Patent Office to make non-existent real estate for you. Their computer-assested means of hedging commodities trading risk fails muster of patentability under what the CAFC reluctantly and discordantly says is the test the statute and the Supreme Court meant it to use all along. Bilski and Warsaw's patent, as a lawyer I don't agree with about anything else recently said, is a patent everybody knows you shouldn't get.

So now, shorn of all the technicalities, the Supreme Court gets a chance to say whether it means what it's always said, or whether it wants to endorse the fast and flashy round-heeled patent system we were running during the boom times. Of course, it can always do nothing at all, or make a new alternative that wasn't there before; that's what being the Supreme Court means, as any Legal Realist will tell you. But one thing is certain, that if they wind up saying anything at all, what the Justices say in this case will determine the course of patent law for a long time to come.

 

 

Comments

[patentbuzz]

For an alternative solution to Bilski see “A Short History of Private Patent Examination”. http://bit.ly/IARKL

Instead of rolling the clock back to the 1800's, let's roll it back even further to the 1600’s. That's when world class experts, such as Galileo, were brought into the patent examination process. They had no problem knocking down dubious inventions.

When you combine the concept of outside experts with the power of internet enabled social networking technology, you get an incredibly powerful patent examination process. One that can stand up to the challenges of software and business methods.

Dubious inventions won't stand a chance.

Valid ones will be respected.

Everyone will benefit.

[RedDogBear]

One thing I've never understood is why can patents be awarded to technologies that are obvious hoaxes? The most blatant example is perpetual motion machines, which violate one of the laws of thermodynamics and yet people have been getting patents for them virtually since there were patents up until the present, the current fad being "zero point" technology?

[doodlefarbe]

Patents are not supposed to be granted on applications for hoax technology such as perpetual motion. Sometimes the patent office screws up. BTW, got any particular perpetual motion patent numbers in mind? Haven't seen any in a while.

[Ameriki]

It is unfortunate that we have at least two justices that would allow corporate America to patent air. It is a good thing that the current national and international patent and copyright laws were not in force when most of the elements of the periodic table were discovered. Someone would own the patent on carbon.

[doodlefarbe]

Which two justices would that be?

[James Love - Huffpost Blogger]

This is an important case. Our own brief focused on the notion that society has, and indeed uses, a plethora of mechanisms to stimulate and reward innovation, and therefore does not need to rely upon patents to do everything. http://keionline.org/node/634

[rocketman69]

Is China considered your plethora?

[Pseudonymous]

True, but missing the point a bit I think. The argument does not appear to be about whether this process is patentable, everyone (but the patentees) seems to agree on that point. The question is what test did we apply to get there. On the one hand, we could be applying the traditional law of nature, physical phenomenon, or abstract idea test. On the other hand, we could be applying the machine-tr­ansformati­on test that the Federal Circuit applied.