Original URL: http://www.theregister.co.uk/2009/11/11/patent_arguments_at_us_supreme_court/

US Supremes prod software patent law

Speed dating and horse whispering

By Rik Myslewski

Posted in Law, 11th November 2009 18:02 GMT

The long-running battle to redefine what is patentable reached the US Supreme Court on Monday, and the back-and-forth between the Justices and competing counsel hinted that their decision will result in relatively minor changes to existing law - not the sweeping overhaul feared by the software and medical technology industries.

That said, attempting to predict a decision by the Supremes based on their comments during in-court arguments is a risky business.

The core of the case in question, Bilski v. Kappos, is tightly defined. But depending upon how the Court rules, it could have far-reaching consequences. At issue is a "business practices" patent put forth by a firm that had devised a mathematical algorithm to analyze weather data with the goal of hedging energy-consumption risk. The US Patent and Trademark Office rejected the patent application, claiming that it merely defined an abstract idea - solving a math problem - and that being non-physical, it was outside the scope of patent protection.

Seems simple enough. But when the United States Court of Appeals for the Federal Circuit heard Bilski's appeal, their October 30, 2008 decision (PDF) redefined the previous rule for patentability of such a claims from whether it "produces a useful, concrete and tangible result" and instead cited and affirmed a previous Supreme Court ruling that used what has become known as the "machine-or-transformation test."

Which means, as explained in the Court of Appeals ruling: "A claimed process is surely patent-eligible under [patent law] if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing."

The machine-or-transformation test has been derided by some as being a cold and unappetizing leftover from the Industrial Revolution no long applicable to the digital complexities of the Information Age, but praised by others as being a practical guide to whether an idea is more than a mere abstract concept and instead an actual, verifiable, and practical process.

In support of the first group, for example, came an amicus brief (PDF) from a group of self-described "Entreprenurial Software Companies" which cited a study that argues: "Patents in this context afford a unique opportunity to the small startup. The patent system grants the small firm an automatic stay of competitive activity that remains in force long enough for the firm to attempt to develop its technology."

In other words, it keep competitors at bay until the company can develop a patentable concept that could survive the more-stringent machine-or-transformation test.

From the second group, however, came an amicus brief (PDF) in support of the Court of Appeals ruling. This brief, from the Bank of America, Google, and others, claimed that to not use a strict definition of patentability leads to a condition in which companies can file patents "not to make productive use of them, but to extract licensing fees from businesses that apply and improve those ideas and methods in real-world products and services."

The number of amicus briefs was striking in itself - 68 in total - but even more interesting was the fact that 26 of them were not in support of either party in the dispute, but which instead simply argued that the patent system is broken and needs the Supreme Court to help fix it.

And so on Monday the case had its day in court - the Supreme Court, to be exact. The arguments and the Justices' questioning make for interesting reading (PDF), not only for the matters discussed but also for a peek into the personalities of the Justices themselves.

Of horses and speed-dating

In general, the Justices took a dim view of the arguments for Bilski's appeal - but so much so that they appeared to be of the opinion that this case is not appropriate for a thoroughgoing rewrite of the central test for patent eligibility. Their comments focused, in their implied opinion, that the Bilski patent application was merely for an idea.

Justice Sotomayor, for example, asked: "If we don't limit [patents] to inventions or to technology [or] to the sciences, to the useful arts, then why not patent the method of speed dating?"

Justice Breyer joined in the fun, suggesting, "You know, I have a great, wonderful, really original method of teaching antitrust law, and it kept 80 percent of the students awake... And I could probably have reduced it to a set of steps and other teachers could have followed it. That you are going to say is patentable, too?"

The ever-irascible Justice Scalia was perhaps the most scathing of the appeal argument in this exchange with J. Michael Jakes, who argued for Bilski:

Scalia: You know, you mention that there are all these - these new areas that didn't exist in the past because of modern business and what-not, but there are also areas that existed in the past that don't exist today. Let's take training horses. Don't you think that - that some people, horse whisperers or others, had some, you know, some insights into the best way to train horses? And that should have been patentable on your theory.

Jakes: They might have, yes.

Scalia: Well, why didn't anybody patent those things?

Jakes: I think our economy was based on industrial process.

Scalia: It was based on horses, for Pete's sake.

Justice Ginsberg approved of the clarity of the US Court of Appeals ruling, citing the concurring opinion of one of the deciding judges: "If you read Judge Mayer's opinion, it has a simplicity to it. It says, if it's technology, then it's within the realm of patent, and if it's not technology, it isn't."

Justices Kennedy, Alito, Roberts, and Stevens also chimed in with probing queries and commentary (Roberts to Jakes: "You think you can patent an alphabet because it is a process of forming words?"), but Justice Thomas, as is his custom, asked not a question and said not a word.

In his thoroughgoing analysis of Monday's arguments, Kevin Noonan of Patent Docs comes to the following conclusion - one that, if true, should calm the fears of software and medical technology vendors worried that Bilski v. Kappos will overturn the patent protections they believe necessary to support innovation and, not incidentally, to keep their companies afloat:

"It appears evident that the Court does not believe that Bilski's claims are patentable, but that this case is not the case to make any broad pronouncements on subject matter eligibility for computer software or diagnostic methods claims."

But that, of course, is just one man's opinion - and one, by the way, with which this reporter agrees.

But one man's opinion plus the viewpoint of one Reg reporter pales in significance compared to the verdict to be handed down next June by seven men and two women wearing black robes and sitting in judgment on the fate of the US patent process. ®