An Important Patent Law Precedent Approaches

03/18/2010 05:12 am ET | Updated May 25, 2011

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.