The US Supreme Court has given its broad support for efforts to make it easier for technology companies to protect software innovations and business methods under patent law in the future.
Despite ruling against two men applying for just such a patent, the court has recommended a review of the near-30-year-old guidelines governing which innovations were eligible for protection under the US Patent and Trademark Office.
Inventors Bernard Bilski and Rand Warsaw had tried to patent a method for hedging the impact that changes in the weather have on energy prices in 1997, but were denied. The pair decided to sue, and the case has been making its way through the US legal system ever since.
The matter came to the wider attention of the technology community in 2006, when the US Court of Appeals for the Federal Circuit ruled against the two men on the grounds that their patent application didn’t involve the use of a machine or transform a substance – known as the “machine or transformation test”.
However, many technology companies objected to this narrow definition, claiming the ruling jeopardised their ability to protect their innovations, many of which involved digital processes and non-physical concepts. Other large companies outside the IT industry, however, wanted the status quo maintained in order to avoid lawsuits.
The Supreme Court finally and unanimously brought Bilski and Warsaw’s quest for a patent to an end, but only on the grounds that it was “too abstract” an idea to warrant patent protection. But in doing so it also rejected the lower court ruling requiring patent applications to stand up to the machine and transformation test, giving wider scope for technology companies looking to patent new technologies.
While US law defines patentable inventions as including “any new and useful process, machine, manufacture, or composition of matter”, deciding just where that line is drawn has become increasingly difficult in the information age.
And as the Bilski and Warsaw case developed, it increasingly became less about the two men and their idea and more a symbolic battle to focus attention on the patent review process.
“I’m disappointed for our client,” attorney J Michael Jakes told The Washington Post after the ruling. “But more broadly it’s a very good ruling for the patent system. [It] should encourage people that our patent system remains open to all types of inventions.”
According to the court ruling, the machine and transformation test creates uncertainty over the potential for software, advanced medical diagnostics and digital signal manipulation to be patented.
“This age puts the possibility of innovation in the hands of more people and raises new difficulties for patent law,” wrote Justice Anthony M Kennedy in the court’s opinion. “The patent law faces a great challenge in striking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of general principles.”
However, the court was divided on just how this challenge should be faced – as demonstrated by their rejection of the weather hedging patent on the technically of being too abstract. “The Court, in sum, never provides a satisfying account of what constitutes an unpatentable abstract idea,” Justice John Paul Stevens wrote in a concurring opinion.
“This mode of analysis [or lack thereof] may have led to the correct outcome in the case, but it also means that the Court’s musings on this issue stand for very little.”
Regardless of any change to the patent laws, the Supreme Court ruled that patents already granted would remain in place.
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