SAN JOSE, Calif. The Supreme Court heard arguments in the Bilski case Monday (Nov. 9). Attorneys observing the arguments said the court appeared "hostile" to granting Bernard Bilski a patent for a business method, but reluctant to set a sweeping standard for what can and can't be patented.
"The question is not whether the Supreme Court will cut back on business method patents, but by how much," said Edward Reines, a partner at Weil, Gotshal & Manges.
"Just how far the Supreme Court will go beyond holding that the Bilski claim is not patentable is the key question," agreed Steven Baik, a partner with Orrick, Herrington & Sutcliffe LLP.
"A cloud may develop over software patenting, but it is unlikely to be banned altogether," added Reines. "The conservative wing of the Court is likely to attempt to keep the ruling incremental, rather than sweeping," he said.
A full transcript of the arguments will be posted on the Supreme Court's Web site. According to its rules, the court can issue a ruling anytime before its summer recess begins.
In the oral arguments, attorney J. Michael Jakes asked the court to strike down a Federal ruling that said Bernard Bilski's methods of hedging a financial trade could not be patented. The Federal court decision suggested a patentable technology should either involve a machine or the transformation of something physical.
"The Federal Circuit's rigid and narrow machine-or-transformation test for all patent-eligible methods should be reversed," said Jakes. "One of the problems with the transformation test is that it would exclude some valuable inventions such as data compression [and] FM radio," he said.
"I have a great, wonderful, really original method of teaching antitrust law, and it kept 80 percent of the students awake," joked Justice Stephen Breyer. "I could probably have reduced it to a set of steps and other teachers could have followed it, [so] are going to say is patentable, too?" he asked.
"Potentially," said Jakes.
Justice Breyer said patent law struck an appropriate balance between protecting an innovation and yet making it available in the nineteenth century when the technology was thought of in terms of machinery.
"Now you're telling us: Make it today in respect to information," Breyer told Jakes. But "if I am honest, I have to tell you: I don't know" if that decision would strike a similar balance, Breyer added.
Justice Ruth Bader Ginsburg noted that patent office in Europe and elsewhere do not allow patents on business methods.
"How about if we say something as simple as patent law doesn't cover business matters," said Justice Sonia Sotomayor. "But I have no idea what the limits of that ruling will impose in the computer world, in the biomedical world, and [other business sectors] who are talking about how it will destroy industries," she added.
Indeed the Bilski case sent waves of concern across the industry where more and more innovation is in software or hybrid mixtures of systems, software and business methods. Dolby, Google, the IEEE-USA, Medtronic, Microsoft, Philips, Pitney Bowes, Red Hat and Yahoo were among those who sent briefs to the Supreme Court arguing their opinions on the case.
Engineers are expressing a wide range of opinions about software and business method patents in our online forum.