Money Matters, Simplified.
Supreme Court hears arguments on business method patents
by Ishita Sood - November 10, 2009 - comments
Many companies have been affected by the Bilksi and Warsaw v. Kappos case so far, and the court’s ruling could influence billions of dollars in patent industry
Washington, November 10 -- The Supreme Court on Monday took up the issue of patent protection and the kind of inventions that qualify for it. The case, Bilksi and Warsaw v. Kappos, involves a method of hedging that has deep rooted implications for the software industry.
The judges debated whether the methods of doing business should be eligible for protection. Examples include Software programs, financial transactions and other non- tangible inventions.
Many companies have been affected by the case so far. The court’s ruling could influence billions of dollars in patent industry.
Bilski and Warsaw vs Kappos
When Bilski and Warsaw applied for a patent in 1997, on a process to lock in energy bills, the patent office denied the application.
The court said the process was too insubstantial because, according to the U.S. Circuit Court of Appeals, a process is eligible for a patent only if it is "tied to a particular machine or apparatus" or if it "transforms a particular article into a different state or thing".
Arguments on Monday made it clear that the justices were doubtful.
Sonia Sotomayor, the new justice, asked the lawyer defending the application how the high court could limit patent protection to "something that is reasonable?"
According to Bilski and Warsaw’s lawyer, Michael Jakes, business methods were patentable as long they had “practical application”.
He also said that the test is too "rigid and narrow" and would rule out many useful innovations in today's information-based economy.
Skeptical judges
But Associate Justice Stephen Breyer held different views. He said that Jakes' logic asks for patent on just about any method for doing business.
"Every successful businessman typically has something," he said. "His firm wouldn't be successful if he didn't have anything that others didn't have.... And your view would be ... anything that helps any businessman succeed is patentable?"
"Yes," replied Jakes.
John Whealan of George Washington University Law School said, "Eight justices talked. They all seemed not to agree with the plaintiff's argument."
Malcolm Stewart, deputy solicitor general, suggested that only those inventions will be able to qualify for patent protection that are "tied to a machine" such as a computer.
He said, however, "hard questions will arise down the road as to where do you draw the line", and insisted that the court should not use the current case to determine the patentability of software.
A decision is expected in June next year.