By Chris Rourk
On June 1, 2009, the Supreme Court granted certiorari for one of the most significant patent cases ever decided by the Federal Circuit, the October 30, 2008, decision in In re Bilski. The issue: what constitutes patentable subject matter? In Bilski, the Federal Circuit reversed its previous decision in State Street Bank & Trust Co. v. Signature Fnl. Group, which held that the test for determining whether a claim is drawn to patentable subject matter under 35 U.S.C. § 101 is whether the claimed invention provides a useful, concrete, and tangible result. In its place, the Federal Circuit adopted the “machine or transformation” test, one of several earlier tests applied by the Supreme Court. After the Federal Circuit’s decision in Bilski, the new test for determining whether a claim is drawn to patentable subject matter is whether the claimed invention is tied to a particular machine or transforms or reduces a particular article into a different state or thing.
The new test in Bilski, as predicted by the dissent in that case, has resulted in findings of invalidity under 35 U.S.C. § 101 for patents issued under the State Street standard. To date, these include a grant of summary judgment of invalidity in CyberSource Corporation v. Retail Decisions, Inc. on March 26, 2009, in the United States District Court for the Northern District of California and Every Penny Counts v. Bank of America Corp. on May 27, 2009, in the United States District Court for the Middle District of Florida.
Perhaps one of the more unsettling aspects of the post-Bilski decisions by the District Courts and even the Board of Patent Appeals and Interferences has been the lack of consistency. For example, the Federal Circuit held that a computer-readable medium storing a program was patentable subject matter under 35 U.S.C. § 101 in In re Beauregard, a decision that the Board of Patent Appeals and Interferences appears generally to be following post-Bilski. However, the court in Cybersource refused to do so and held such claims invalid under 35 U.S.C. § 101. Likewise, the Federal Circuit in WMS Gaming v. International Game Technology held that claims for software invoking the provisions of 35 U.S.C. 112, paragraph 6 (“means plus function claims”) are drawn to a special purpose machine. Although the Board of Patent Appeals and Interferences also generally appears to be following that decision post-Bilski, the court in Every Penny Counts refused to do so and held such claims invalid under 35 U.S.C. § 101. Thus, rather than clarifying what constitutes patentable subject matter under 35 U.S.C. § 101, Bilski has instead created uncertainty and inconsistency.
In the petition for certiorari, Bilski argued two main points. First, the Federal Circuit’s holding in Bilski relied on a test that the Supreme Court had only used as a guideline for determining whether claims were drawn to patentable subject matter under 35 U.S.C. § 101, a test that is more applicable to inventions from the “industrial age” and which the Supreme Court had never adopted as an absolute rule for patentability. Second, Congress enacted legislation after the Federal Circuit’s ruling in State Street Bank that specifically embraced that ruling and has declined to enact legislation that would overrule the holding in State Street Bank on several occasions. The Patent Office argued in response that the holding in Bilski did not require review, but the Supreme Court disagreed and granted certiorari. While it is too early to tell what change the Supreme Court is going to make, the fact that they have granted certiorari makes it likely that some change is coming. Meaning that it will likely be many more years before any level of certainty is reached about what, exactly, constitutes patentable subject matter.
The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.