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Bilski Followup

The U.S. Supreme Court recently had its say regarding the case of Bilski v. Kappos, a case that important ramifications for software developers. To get a clear understanding of the Supreme Court's decision, we recently spoke with Craig Hemenway, a partner in Dorsey Whitney Intellectual Property practice group.

Dr. Dobb's: Can you give us a snapshot of Bilski? A quick historical account of the case.

Hemenway: In Bilski, the Federal Circuit was asked to rule on the patentability of a method for hedging risks in trades. The Circuit took the opportunity to set out a test for the patentability of business methods. Specifically, the Federal Circuit endorsed the so-called "machine or transformation" test, in which a method or process is only patentable subject matter if it is tied to a particular machine or transforms an article in some fashion.

Dr. Dobb's: What is the core legal issue at stake?

Hemenway: The Supreme Court granted certiorari and issued its decision in Bilski v. Kappos on Monday. In the decision, the Court unanimously upheld the Federal Circuit's ruling that Bilski's claims were not patentable, stating that the claims covered nothing more than an abstract idea. The Court likewise held that the "machine or transformation" test is not an exclusive test, but indicated it could still provide a good clue as to the patentability of a method.

Dr. Dobb's: What did the Supreme Court's decide?

Hemenway: The Supreme Court split on the issue of whether or not business methods should be patentable at all. Four Justices agreed that certain business methods could be patentable but declined to provide guidance or examples. In this portion of the opinion, Justice Kennedy indicated that "new technologies may call for new inquiries." In short, Kennedy acknowledged that inventions today may be different than inventions seen in the so-called "Industrial Age" and that an industrial-era test may not be appropriate now. Given the similarities between business method claims and software claims, much of this discussion is germane to software patents as well.

Four other Justices filed a second opinion that business method patents should never be patentable. This opinion suggests that business methods were not considered patentable historically, and so should not be considered patentable subject matter now.

In short, business methods and software still may be eligible for patent protection and the "machine or transformation test," which could exclude many such inventions, is not the sole law of the land for determining patentability. However, the Supreme Court left ambiguity in place by refusing to articulate any particular patentability test. This, it appears, will be left up to the Federal Circuit and the Patent Office. Given the Federal Circuit's long history with patent law, perhaps this was the wisest possible choice.

Dr. Dobb's: How will this affect software developers?

Hemenway: Software developers should continue to seek patent protection where appropriate and possible. However, developers and companies need to realize that the law is again in a state of flux and a new test may come out that could -- again -- change the playing field. Thus, although software patent applications are legitimate and valid, one should prepare for the possibility that future rulings could impact existing patents. I would suggest continuing to include at least some claims in software and business method patents that satisfy the "machine or transformation" test to ensure that future rulings don't strip issued patents in these areas of all enforceability. After all, if the "machine or transformation" test is too restrictive in view of Bilski, then any claims satisfying its requirements should likewise meet the (presumably) relaxed standards of the future.

Dr. Dobb's: How will this decision affect software users?

Hemenway: Software users shouldn't see much of an impact from this ruling. In most cases users have legal copies of software in the first place and software is also protected by copyright. To the extent that patent coverage for software is expanded by Bilski, it may lead to an uptick in patent infringement lawsuits against developers, distributors and manufacturers.

Dr. Dobb's: Thanks for your time.

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