Bilski Heard by Supreme Court; Hilarity Ensues

Why should everybody care about the Bilski case that was just heard at the Supreme Court? Pending the result of this case, patent law and the dissemination of technical information may never be the same.

The petitioner claims that the metric for developing a current patent is insufficient into cover the algorithms which which produce data.  While this is substantively correct, the court has fears of a runaway patent explosion. The technology industry waits with baited breath.

Issue: Whether a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (”machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101 and whether the “machine-or-transformation” test for patent eligibility, contradicts Congressional intent that patents protect “method[s] of doing business” in 35 U.S.C. § 273. SCOTUSblog

The case involves a patent application by Pittsburgh businessmen Bernard Bilski and Rand Warsaw for a way for utility companies and their customers regularize costs by considering factors of supply, demand, and weather. Legal Times

The Bilski case has a modern cast to it, for at least two reasons: first, it involves the concept of digitizing business methods through creation of new computer software, and, second, it involves the rapid growth of information technology in global commerce. The case is expected to draw a larger number of friend-of-court briefs on both sides of the patentability question. The Bilski-Warsaw petition already has attracted a number of amici – special briefs from “friends of the court”. SCOTUSblog

The data itself is not patentable, but if it is a series of steps, it should be eligible as long as it meets the other statutory requirements as a process.

Under the present governing rule, a “physical step” is required for a patent – thus leaving algorithms out of scope.

Malcolm Stewart, who argued in support of the (current) test on behalf of the Obama administration, suggested that such inventions would still be able to qualify for patent protection if they are tied to a machine such as a computer. He added, however, “hard questions will arise down the road as to where do you draw the line” and urged the court not to use the current case to determine the patentability of software, medical diagnostic tests and other inventions typically patented as processes. Associated Press

JUSTICE SOTOMAYOR: But a patent limits the free flow of information. It requires licensing fees and other steps, legal steps. So you can’t argue that your definition is improving the free flow of information.

MR. JAKES: Your Honor, I would, because of the disclosure requirement of the patent laws. It requires people to disclose their inventions rather than keeping them secret, so there is a second benefit to the patent system just other than encouraging people to invent, and that is to have that information get to the public generally. And in exchange for that –

JUSTICE SCALIA: Even though the public can’t use it, right, until the patent expires?

This exchange encompasses gist of the debate. But since the court has a difficult time understanding the nuance of technology, these discussions quickly devolve into a series of poorly constructed analogies . Hilarity Ensues:

Sotomayor: So how do we limit it to something that is reasonable? Meaning, if we don’t limit it to inventions or to technology, as some amici have, or to some tie or tether, borrowing the Solicitor General’s phraseology, to the sciences, to the useful arts, then why not patent the method of speed dating?

The Supreme Court gave a skeptical and at times scornful reception to arguments that there should be broader patent protection for “business methods,” which several justices suggested did little to spur the technological progress that patent laws were intended to promote. Wall Street Journal

JUSTICE SCALIA: You know, you mention that there are all these — these new areas that didn’t exist in the past because of modern business and what-not, but there are also areas that existed in the past that don’t exist today. Let’s take training horses. Don’t you think that — that some people, horse whisperers or others, had some, you know, some insights into the best way to train horses? And that should have been patentable on your theory.

MR. JAKES (Bilski) : They might have, yes.

JUSTICE SCALIA: Well, why didn’t anybody patent those things?

MR. JAKES (Bilski):  I think our economy was based on industrial process.

JUSTICE SCALIA: It was based on horses, for Pete’s sake. You — I would really have thought somebody would have patented that.

I am personally unconvinced that court accurately understands the nuance. The term of “machine” is casually tossed about so frequently that barely recognizable between justices. Such a simple to explain a highly complex hierarchical series of functions.

Scalia and Roberts were notably overall rather silent and chimed in with generally irrelevant comments. Never mind that bunk “what would the framers envision”  comment by Breyer.  I heard Madison had a PC and Hamilton used Mac, but neither approved of FreeBSD.

CHIEF JUSTICE ROBERTS: You get on the phone and you call the baker and you get on the phone and you call the grocer and say: I can set up a deal for both of you?

MR. JAKES: It could be. It could be done that way because it does take a person acting to do that. It’s not purely –

JUSTICE KENNEDY: And so in the insurance case it takes a person to go over to the Bureau of Statistics and compile statistics on — on life — on life expectancy.

Sotomayor was engaged throughout the entire discussion. Her points were largely focused and represented a superior knowledge of technology. I am impressed by the second youngest member of the court. She was billed as a very intelligent and veracious learner and has not disappointed.

JUSTICE BREYER encapsulates the overall policy issue which is also a great way to end this technical article.

There are actually four things in the patent law which everyone accepts. There are two that are plus and two that are minus. And the two that are plus is by giving people a monopoly, you get them to produce more. As you said, you get them to disclose. The two minuses are they charge a higher price, so people use the product less; and moreover, the act of getting permissions and having to get permission can really slow things down and destroy advance. So there is a balance.