October 31, 2008

Putting the Toothpaste Back in the Tube? [7:19 am]

Going to be a long, uphill battle, though: Ruling may make it hard to patent business process (pdf)

The US Court of Appeals for the Federal Circuit yesterday rejected a Philadelphia mans attempt to obtain a patent on a way to buy or sell energy at a fixed price based on the expected weather for a season. The court said patents on business methods must either be connected to a machine or must “transform” an item from one state to another.

The decision is a victory for companies including Microsoft Corp. and International Business Machines Corp. who had urged the court to narrow the standard for the patents. The decision puts the United States closer to the standard in Europe, which requires that software have a technical link to be patented.

A local copy of the decision, In Re Bilski

From the opinion:

The question before us then is whether Applicants’ claim recites a fundamental principle and, if so, whether it would pre-empt substantially all uses of that fundamental principle if allowed. Unfortunately, this inquiry is hardly straightforward. How does one determine whether a given claim would pre-empt all uses of a fundamental principle? [...]

The Supreme Court, however, has enunciated a definitive test to determine whether a process claim is tailored narrowly enough to encompass only a particular application of a fundamental principle rather than to pre-empt the principle itself. A claimed process is surely patent-eligible under ยง 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. [...] A claimed process involving a fundamental principle that uses a particular machine or apparatus would not pre-empt uses of the principle that do not also use the specified machine or apparatus in the manner claimed. And a claimed process that transforms a particular article to a specified different state or thing by applying a fundamental principle would not pre-empt the use of the principle to transform any other article, to transform the same article but in a manner not covered by the claim, or to do anything other than transform the specified article.

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