Thursday, October 30, 2008

FedCirc Decides High-Profile Patent Case

The Federal Circuit Court of Appeals on Thursday upheld a decision by the Patent and Trademark Office's appeals board in a high-profile “business methods patent” dispute. At issue was PTO's rejection of an application by inventor Bernard Bilski, who tried to patent what some believe is an abstract idea to reduce risk in buying and selling commodities. The case generated immense interest in the high-tech and intellectual property communities with amicus briefs filed by the American Intellectual Property Law Association, Business Software Alliance, Computer and Communications Industry Association and a number of individual firms.

The 9-3 ruling largely rejected State Street Bank & Trust v. Signature Financial Group, a decade-old case that established a test that helped pave the way for business method patents. Chief Judge Paul Michel, who wrote the majority opinion in the Bilski case, explained that "because the applicable test to determine whether a claim is drawn to a patent-eligible process under § 101 is the machine-or-transformation test set forth by the Supreme Court and clarified herein, and Applicants' claim here plainly fails that test." Michel has repeatedly criticized State Street but court watchers were unsure of which way the wind would blow.

The case has significance far beyond whether the inventor in question ought to be granted a patent, Accenture Intellectual Property Director Wayne Sobon said earlier this year. The judges acknowledged that impact by focusing on the possible effects of "any kind of a bright-line rule on our new economy," which is largely information-driven. At an April briefing, Foley & Lardner attorney Pavan Agarwal predicted the case would be sent to the Supreme Court, regardless of who won since the justices have shown more interest in hearing patent cases in recent years. Read a more detailed analysis on the Patently-O blog.