ELECTRONIC NEWSLETTER

Abelman, Frayne, &Schwab

The long anticipated US Supreme Court Bilski v. Kappos 561 U.S. __ (2010) case has been decided. The decision has implications for not only business methods, but as well for other fields such as patent claims addressing medical treatment.

The Justices acknowledged that business method patents are patentable subject matter under the existing state of the law (although 4 Justices would have determined otherwise); --found the Bilski application to be unpatentable as claiming an abstract idea -- and decided that although the machine/transformation analysis is a "useful and important" test of patentable subject matter, it is not the only test.

Nonetheless, a business method claim that does not meet the machine/transformation test has to overcome a "high bar" to demonstrate that it is not directed merely to an "abstract idea." What the Court did not do is provide guidance, beyond referring to its earlier precedents, about what qualifies under 35 U.S.C. § 101 as patentable subject matter. That precedent has been the subject of differing views as to where the line is drawn between a non-patentable "abstract idea" or a patentable method and the decision did not establish any bright line test.

Therefore, except for a recognition by the Court that process patent protection is available for Information Age technology, we are left with little more than the uncertainty that existed before Bilski. Indeed, the Supreme Court invited the Federal Circuit in a proper case, to provide guidance in defining the line between "abstract idea" and patentable subject matter.

The United States Patent & Trademark Office has already issued preliminary guidelines that direct Examiners to reject business method claims which do not meet the machine-or-transformation test, leaving it to the applicant to present arguments (of an unspecified nature) which would support a finding that such claims nonetheless cover patentable subject matter.

It is therefore our recommendation that whenever possible, business method claims include either a "machine" or "transformation" limitation. Prior to Bilski, simply including in a claim something "concrete that has parts" was deemed to satisfy the "machine" test and that "administering" a drug that resulted in a change in the condition of a patient was a transformation. However, in characterizing its prior decisions the Supreme Court decision may be viewed as suggesting that the Patent Office may revise its position and, for example, give little weight to a "machine" limitation that does not add substance to the claim.

Ultimately, we will be evaluating these issues on a case by case basis.