Impact of Bilski v Kappos on Future Business Method Patents
Issue
This paper will analyze whether the Supreme Court judgment in the case of Bilski et al. v Kappos, Under Secretary of Commerce for Intellectual Property and Director, Patent and Trademark Office has any effect on business methods in future.
Rule of Law
Section 100(b) of the U.S Patents Act defines process as a process, art, or method, and includes use of a known process, machine, manufacture, composition of matter, or material. Section 101 of the U.S Patents Act states as follows:
“Whoever invents or discovers any new and useful process, machine, manufacture or composition of matter, or any new useful improvement thereof, may obtain a patent thereof, subject to the conditions and requirements of this title.”
Application of the Law
The Supreme Court affirmed that Section 101 of the U.S Patents Act describes which kind of subject matter can be eligible for a patent.
The term, business method has no widely known definition, but it can be described as a new way of conducting business activities, frequently using computer software. However, the use of computer software is not compulsory.
In Bilski v Kappos, the plaintiff claimed an invention that purposed to mitigate the consumption risks of a product sold by a producer at a fixed rate. The plaintiff wanted to patent the invention. The Supreme Court was of the opinion that the machine or transformation test is not the only test that determines whether a business method is eligible for a patent. It was held that the machine-or-transformation test is useful in determining if a process such as a business method is eligible for a patent under Section 101 of the U.S Patents Act. The particular machine or transformation must have a purposeful contribution to the claimed process. This means that the claim cannot forestall all uses of the underlying principle. The claim should also not preempt all benefits of a principle even within a particular field. Preemption to any degree shows that a claim has no link to any specific application. The link to a specific machine or transformation of an article should also not comprise of mere insignificant post-solution activity. The Supreme Court thus held that the petitioner’s invention was an abstract idea and not a subject matter that could be eligible for a patent. It means that business methods that are merely an abstract idea and not subject matter do not qualify for a patent. The Supreme Court did not give a further definition of what constitutes a process eligible for patent beyond the description outlined in Section 100(b) of the U.S Patents Act. The court did not also give a test that would make a business method eligible for a patent or what makes a business method subject matter. It is not clear whether a future business method will be eligible for a patent. In the future, courts have the freedom to provide a test for determining what makes a business method a subject matter eligible for a patent. However, the Supreme Court decision in Bilski v Kappos does not affect previous business methods under patent.
The Supreme Court decision in Bilski v Kappos calmed fears that innovations during the Information Age would be excluded from processes eligible for a patent as defined under the Machine or Transformation Test.
The Patent and Trademark Office has not issued new principles concerning the eligibility of business methods as processes for a patent. However, there was a memo issued that stated:
Suppose the claimed method meets the Machine or Transformation Test. In that case, it is likely patent-eligible under Section 101 of the U.S Patents Act unless there is a clear indication that the process is directed to an abstract idea.
Suppose the claimed method does not meet the Machine or Transformation test. In that case, the examiner should issue a rejection under Section 101 of the U.S Patents Act unless there is a clear indication that the method is not directed to an abstract idea.
Those who wish to patent business methods will have to ensure that their innovations are subject matters and not abstract ideas. As much as the Supreme Court did not determine what constitutes a subject matter, the guidelines issued by the Patent and Trademark Office should be used while applying for a patent for a business method. Complying with these guidelines will help an inventor obtain a patent for their business method without involving courts.
Conclusion
The Supreme Court Bilski v Kappos emphasizes that apart from the machine or transformation test, subject matter and not abstract idea are crucial in determining a business method’s eligibility as a process for a patent. An inventor should be able to link the business method to a subject matter and meet the guidelines issued by the Patent and Trademark Office to obtain a patent for the business method.
References
Bilski v. Kappos, 08-964 U.S. (2010
- David Donoghue and Micael A. Grill, In re Bliski: A Midpoint in the Evolution of Business Methods, 7 NW.J. TECH. & INTELL. PROP. 316 (2009). https://scholarlycommons.law.northwestern.edu/njtip/vol7/iss3/4
Supreme Court Delivers Long-Awaited Decision in Bilski Case “Business Method” Patents Are Still Viable, And It’s Business As Usual For Patent Licensors And Licensees…For Now. (n.d.). Robinson Waters & O’Dorisio, P.C. Retrieved October 2, 2020, from https://rwolaw.com/supreme-court-delivers-long-awaited-decision-in-bilski-case-business-method-patents-are-still-viable-and-its-business-as-usual-for-patent-licensors-and-licenseesfo/
Mudge, B. (2010, July). A Madness to the Method? The Impact of Bilski on Method Patents. Law Journal Newsletters. https://www.lawjournalnewsletters.com/sites/lawjournalnewsletters/2010/07/29/a-madness-to-the-method-the-impact-of-bilski-on-method-patents/?slreturn=20200902055123
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