Supreme Court hearing of Bilski surprises some patent followers

Marilyn Tennissen Jun. 4, 2009, 6:26am

The U.S. Supreme Court agreed to hear a patent case this week that many in the intellectual property world thought would never happen.

On June 1, the court took on review of Bilski v. Doll, a landmark case that narrowed the patentability of business methods, as opposed to patents for tangible inventions tied to a particular machine.

The high court could reverse a ruling by the U.S. Court of Appeals for the Federal Circuit last fall.

"Since Bilski is anti-patent, and the Supreme Court decisions have been largely anti-patent, I can't see the court in a hurry to consider this case," Los Angeles intellectual properties attorney Steven Sereboff said in a Southeast Texas Record article published in April.

The case began in 1997 when plaintiff Bernard Bilski sought a patent for a method of predicting and hedging risk in commodities trading.

In Bilski, the appellate court ruled that a process for anticipating and hedging risk in commodities markets did not deserve a patent. The court ruled that business methods in and of themselves could not be patented, and that a patent must either make an actual machine or result in a physical transformation of something existing.

As the Southeast Texas Record reported, the Federal Circuit ruling caused a stir among technology businesses fearful their speculative patents waiting in the pipeline were suddenly worthless.

The last few months have started a new direction in patent law that Bilski and other pending cases all suggest is the Court of Appeals' effort to clamp down on what can be patented, how many patents can be issued, and vicariously, how aggressively businesses will defend themselves from patent infringement lawsuits.

Washington, D.C., patent attorney Peter Strand told the Record in April that the case helps limit the patents of questionable value, which will in turn lessen the impact of frivolous lawsuits.

"Here's the practical effect," Strand said. "Post-Bilski, courts are more willing to invalidate patents on abstract ideas that do not expressly employ machines or other man made things. Moreover, on the licensing front, prospective licensees are more willing to challenge patents near the boundaries of patentable subject matter in court as opposed to arranging for a royalty or other payment terms. Patents in litigation that are perceived to be on the margins will be more frequently challenged by motions for summary judgment."

When Bilski first petitioned the Supreme Court in January, several experts predicted the court would not grant review, because the Federal Circuit appeared to be following the recent Supreme Court trend of narrowing the scope of patents.

Paul M. Janicke, professor of law at University of Houston Law Center told the Record only two months ago, "It seems pretty obvious that the Federal Circuit in Bilski made a special effort to track the Supreme Court precedents to the letter; so I think cert would be very unlikely."

Some experts say about 10 percent of existing software claims might be invalidated by Bilski.

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