Intellectual Property: Bilski v. Kappos
Intellectual property cases are important — and are respected by this firm — because they involve the protection of some of our most important human characteristics: creativity, ingenuity, resourcefulness, imagination, and boldness. When those qualities converge, new and unimagined ideas or products are created — which can expand the human experience for all of us. But if those creations are stolen and the inventor is not protected, the damage to the inventor is profound, but the damage to all of us is equally significant. The process leading to creation needs to be encouraged — and zealously protected.
A patent is a document issued by the U.S. Patent and Trademark Office. It provides protection to the inventor for the exclusive right to make use of, and sell or commercially benefit from, the invention to the extent described in the patent’s claims. The process commences with a patent application — the patent being the document resulting after the conclusion of the application process. A patent will typically consist of drawings of the invention, a specification or description explaining the invention, and the claims which define the scope and limits of the exclusivity.
The U.S. Patent Act defines the types of inventions or discoveries that can be patented. “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this [act].” 35 U.S.C. § 101.
A decision by the United States Supreme Court in 2010 — Bilski v. Kappos — illustrates the need to vigorously support inventions and discoveries that are different from the inventions of 19th and 20th Century America. In an information age, inventions that should be protectable and patentable are not always things you can touch and feel — or drive, or turn on.
It is an issue that has current relevance because the U.S. Supreme Court has struggled, in murky fashion, to clarify what inventions are outside the scope of patent law. In Bilski v. Kappos, 130 S. Ct. 3218 (2010), the Court was presented with an “invention” that purported to allow buyers and sellers of commodities in the energy market to protect — or hedge — against the risk of price changes. The claims described factors that should be considered, reduced some claims to a mathematical formula, and recommended the utilization of random analysis techniques to determine some of the factors.
Bilski, then, did not involve an invention like a light bulb or some other new machine or tangible thing. The initial reasoning in the Supreme Court opinion (written by Justice Kennedy) was:
- Section 101 limited patent protection to four categories of inventions or discoveries: processes, machines, manufactures, and compositions of matter.
- The opinion stated that prior rulings by the Court established three exceptions to what was described as “§ 101’s broad patent-eligibility principles:” laws of nature, physical phenomena, and abstract ideas.
- The opinion also noted that the Patent Act itself provided certain other exceptions/requirements—so that the invention would have to be “novel” (§ 102), “nonobvious” (§ 103), and “fully and particularly described” (§ 112).
- Justice Kennedy stated that the claimed invention in Bilski was asserted to be a “process” under § 101, and that word was defined by § 100(b) as follows: “process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.”
Mr. Bilski had appealed to the Supreme Court after losing before the judges of the Federal Circuit. That Court applied what is known as the “machine-or-transformation” test — that if a “process” is to be patent eligible, it must either be “tied to a particular machine or apparatus” or it must transform “a particular article into a different state or thing.” Most important, however, was the fact that the Federal Circuit held that the “machine-or-transformation” test was not just an evaluative factor in determining whether a process was patent-eligible. Instead, that court held it was a requirement in determining the patent eligibility of a process.
The Supreme Court took a different approach. First, it overruled the Federal Circuit and held that the machine-or-transformation test was not a requirement but was rather “a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible ‘process.’” Next, it confronted another test or exclusion that had been discussed in other cases and law review articles — namely that a “business method” could not be patentable. That position was not very solidly founded inasmuch as the § 100(b) explicitly uses the word “method” and § 273(a)(3) defined “method” as “a method of doing or conducting business.” The Supreme Court held that that label — “a business method” — was not disqualifying, that some business methods could be patentable, but § 273 “does not suggest broad patentability of such inventions.”
But the Court did not think much of Mr. Bilski’s contribution as some kind of a patentable invention. As with the Federal Circuit, the Supreme Court rejected his patent claim — but not because of the “machine-or-transformation” test and not because business methods are de facto unpatentable. Instead, the Court said it was “an abstract idea” and unpatentable for that reason. But in the process of coming to that conclusion, the Court’s opinion mentioned another case — Diamond v. Diehr, 450 U.S. 175 (1981) which claimed patentability for a method of molding synthetic rubber by using a mathematical formula to complete some of the computerized manufacturing steps. The Court reasoned that the mathematical formula in Diamond was alright because it constituted an “industrial process” but in Bilski it was just an abstract idea.
The opinion in Bilski will be considered, in the passage of time, a watershed opinion; not in the sense of it being a fundamental and enduring statement of the law, but rather in the sense of being a juncture. It was appropriate to rule that the machine-or-transformation test was not a requirement. It was also appropriate to rule that some business methods could certainly be patentable. But other than cancelling Mr. Bilski’s patent, the Supreme Court did not provide any clear direction or standards for evaluating patents in the 21st Century — a fact made even more evident when one reads the concurring opinions written by Justice Stevens and Justice Breyer.
Our patent system emerged in an era of greater tangibility. It is evident that the light bulb would be a patentable invention — as well as other physical things or machines. But our new technologies and our new creations are oftentimes different — not tangible, not a machine — a light bulb without a light bulb. It will be one of the challenges in intellectual property cases in the coming decade to protect that “light,” that creation. The fact that something is not tangible and has aspects of a mathematical formula or an algorithm should not be determinative of patent eligibility.