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Earlier this week, the Supreme Court heard oral arguments in Mayo v. Prometheus, an important case that deals with many of the same §101 issues as were present in Bilski earlier this year. 
 
Briefly, Prometheus concerns patents on a method for determining optimal dosage levels for drugs used to treat autoimmune diseases.   In the claimed process, a particular drug is administered to a patient, and the levels of the drug's metabolites present in the patient are then determined.   The process also includes steps wherein presence of a metabolite at certain levels indicates a need to increase or decrease the amount of drug administered in the future.

This case first came to the Federal Circuit after it had decided In re Bilski, but before the Supreme Court issued its decision in Bilski v. Kappos.  As a result, the Federal Circuit applied the machine-or-transformation test as the definitive test under §101, and found the claims to be patent-eligible.   According to the Federal Circuit, the administering and determining steps were transformative and therefore satisfied the second prong of the test, and as a result the claims did not wholly preempt the use of the correlations between metabolite levels and therapeutic efficacy or toxicity.
 
After Bilski v. Kappos, the Supreme Court vacated this case and remanded it to the Federal Circuit for reconsideration, giving that court one of its first opportunities to attempt to apply and interpret Bilski.  On remand, the Federal Circuit characterized the central question as whether Prometheus's claims are drawn to a natural phenomenon, the patenting of which would entirely preempt its use, or whether the claims are only drawn to a particular application of the phenomenon.  Mayo, argued, before the Federal Circuit and again this past week before the Supreme Court, that this was the sole controlling standard, and that Bilski stood for the proposition that, while the machine-or-transformation test is a helpful clue, it cannot be outcome-determinative in this analysis.   According to Mayo, even if the claims passed the machine-or-transformation test, more analysis, such as a robust preemption analysis, would be necessary to make a subject-matter eligibility determination.  Prometheus, on the other hand, argued that the Bilski ruling only meant that patents which did not satisfy the machine-or-transformation test were not necessarily unpatentable, but did not go so far as to say that some patents that do satisfy the test are unpatentable. 
 
The Federal Circuit ultimately agreed with Prometheus.   Does this conception of patent-eligible subject matter comport with the result in Bilski?  In Bilski, the Court never mentioned the machine-or-transformation test as anything other than a useful tool, and a helpful clue in patent-eligibility analysis.  And, as noted by the Federal Circuit, in Benson the Supreme Court stated that "[t]ransformation and reduction of an article to a 'different state or thing' is the clue to the patentability of a process claim that does not include particular machines."   So, while the Supreme Court does support the machine-or-transformation test as useful, it has never explicitly ruled that a claim that passes the test is also per se not preemptive.  However, by the same token, it has never explicitly found a claim that does pass the test to be unpatentable. So, while this line of reasoning in Prometheus does extend somewhat beyond current Supreme Court precedent, it is at least not inconsistent with that precedent.  It will be interesting to see, when the decision in this case finally comes down, whether the Supreme Court is willing to stretch as far as the Federal Circuit. 
 

The Supreme Court of the United States is scheduled to hear arguments regarding Prometheus v. Mayo on December 7, 2011.  This case provides the Supreme Court the oppurtunity to clarify the Bilski ruling regarding patentable subject matter in light of the recent patent reform.  In order to refresh your memory, we have provided a summary of the case thus far:

In Prometheus, the patent at issue is a method for administering and subsequently determining the level of toxicity caused by thiopurine drugs used to treat gastrointestinal and autoimmune diseases, including 6-mercaptopurine ("6-MP") and azathiopurine ("AZA").  The latter is merely a "pro-drug" that converts to 6-MP upon administration to a patient.  Prior to filing these claims, these drugs had been widely used to treat diseases such as inflammatory bowel disease and Crohn's disease, but had sometimes caused complications with non-responsiveness and drug toxicity.  As such, the claimed method is a two-step method for (a) "administering" the drug, and (b) "determining" the levels of the drugs metabolites in order provide the doctor with instructions for the next dosage. 

The Federal Circuit has decided this case twice, most recently reviewing the case on remand in light of the Supreme Court's decision in Bilski.  Upon hearing the case in the first instance, the Federal Circuit overturned the district court's finding that Prometheus's asserted medical treatment method was drawn to non-patentable subject matter under §101.  In making this finding, the Federal Circuit applied the machine-or-transformation test, and found the process to be transformative.  However, after the Federal Circuit handed down this ruling, the Supreme Court handed down the famous (or infamous?) Bilski ruling which rendered the machine-or-transformation test "a useful and important clue" of patent eligibility under §101, instead of the sole test.   Due to this, the Federal Circuit's initial ruling was vacated, and the case was remanded to be reconsidered in light of the Supreme Court's Bilksi determination.  

Upon remand, the court once again found the claimed method to be drawn to patentable subject matter.  However, this time the Federal Circuit provided alternate, but similar, reasoning.   In addition to only examining the claimed method under the machine-or-transformation test for a clue as to the patentability of the method, the Court also analyzed whether the method was merely claiming an abstract idea.  

For more information regarding the Federal Circuit's Ruling upon remand, please continue reading. 

After the Supreme Court handed down its long-awaited decision in Bilski v. Kappos, the United States Patent and Trademark Office had established an Interim Guidance regarding examination subject matter eligibility for process claims in light of Bilski. The USPTO had also requested public comments regarding its new Interim Guidance and the interpretation of the Bilski decision.

One such public comment was recently submitted by Red Hat, a distributor of the open-source Linux operating system. In its comment, Red Hat argued against the patentability of software in general, recommending that the Interim Guidance of the USPTO be revised so as to recognize that software patents fail to satisfy the requirements of 35 U.S.C. § 101.

Red Hat also stated that as many software patents have vague and uncertain boundaries, creating new software entails a risk of infringing vague software patents, and thus discourages innovation in software. Thus, Red Hat argues, "the problem of vagueness is so endemic in software patents that it warrants action at the threshold level of subject matter eligibility."

Previously, Red Hat had submitted an amicus brief to the Supreme Court arguing against the patentability of software. Whether its public comment will have any influence on USPTO policy remains to be seen, but appears unlikely.
It took 231 days for a decision to be rendered in Bilski v. Kappos, longer than any other Supreme Court patent case in recent memory. Since oral arguments took place on November 9, 2009, the Supreme Court had also received 65 amicus briefs, which is also believed to be a record for a case dealing with patent law. The long wait was exacerbated by the fact that the Bilski decision was expected to have determined the fate of business method patents, or to at least provide some guidelines on what constitutes patentable subject matter.

Indeed, business method patents survived -- but by a hair. Departing Justice Stevens was expected to author the majority opinion, but the controlling opinion in the case turned out to be Justice Kennedy's, with five justices concurring with the greater part of it (Justice Scalia didn't sign on to certain portions of the opinion). The majority opinion wound up rejecting Bilski's risk-hedging method because it was an abstract idea -- something all nine justices agreed with -- but left the question of the patentability of business methods untouched.

Justice Stevens wrote a concurring opinion that was an indictment of the patentability of business methods. Stevens opined that business method patents stifled innovation, depressed "the dynamism of the market," and were thus undesirable. However, his opinion garnered only  four votes, and wound up being merely a concurrence, rather than the controlling opinion.

For now, business method patents live on, and United States patent law remains mostly unchanged by the decision in Bilski v. Kappos. However, the Federal Circuit is expected to develop some "limiting doctrines" for the field -- somewhere between the expansive standard set by the Federal Circuit in the State Street Bank decision and the machine-or-transformation test, which has been deemed by the Supreme Court, in the instant case, to be too restrictive.

Read the opinion in Bilski v. Kappos.
Yesterday's long-awaited Bilski v. Kappos holding was rather anticlimactic, in that it provided no new guidelines on whether a particular invention would be patentable under 35 USC § 101. While some had feared that the decision in Bilski may invalidate business method patents altogether, while others expected that the Supreme Court would at least provide clarity to the patentability rules for business methods, the Court instead decided to limit its holding solely to the invention at issue:

It is important to emphasize that the Court today is not commenting on the patentability of any particular invention, let alone holding that any of the above-mentioned technologies from the Information Age should or should not receive patent protection. This age puts the possibility of innovation in the hands of more people and raises new difficulties for the patent law. With ever more people trying to innovate and thus seeking patent protections for their inventions, the patent law faces a great challenge in striking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of general principles. Nothing in this opinion should be read to take a position on where that balance ought to be struck.

The Court did decide that Bilski's risk-hedging method was unpatentable, due to the concept being an abstract idea:

The concept of hedging, described in claim 1 and reduced to a mathematical formula in claim 4, is an unpatentable abstract idea, just like the algorithms at issue in Benson and Flook. Allowing petitioners to patent risk hedging would preempt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea.

However, in reaffirming the Federal Circuit's ruling that Bilski's method was unpatentable, the Supreme Court effectively rejected the Federal Circuit's machine-or-transformation standard as the sole test by which to determine the patentability of a process, electing instead to rely on the precedential cases of Parker v. Flook, Gottschalk v. Benson, and Diamond v. Diehr:

Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act's text. The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what constitutes a patentable "process," beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr. And nothing in today's opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357. It may be that the Court of Appeals thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents, including (but not limited to) application of our opinions in Benson, Flook, and Diehr. In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit's development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text. The judgment of the Court of Appeals is affirmed.

Thus, while certain business method patents and computer-implemented process claims are likely to remain patentable subject matter as far as the USPTO is concerned, the Supreme Court, in this ruling, has effectively directed the Federal Circuit to apply the Benson-Flook-Diehr line of precedent to redevelop a doctrine of patentable subject matter beyond the machine-or-transformation test, and it is likely that we will see the issue relitigated in the years to come.

Stay tuned for further analysis of the Bilski decision and its implications in the coming days.

The Supreme Court has finally released the much anticipated Bilski v. Kappos.  The machine or transformation test was upheld, but it is not the only test to determine if something is patentable under 101.  A look at the factors of Diehr, Benson and Flook is also required.  From SCOTUSblog, which covered the release of Bilski live:

Erin: 
The Federal Patent Act does not categorically exclude business methods from eligibility to be patented.
Erin: 

The word "method" within the law's definition of  "process" may include at least some methods of doing business.  Even though the invention in this case would not be categorically barred from eligibility, the Court says that does not mean it qualifies as a process.

 

We will have much more coverage of Bilski soon, but for now, here is the opinion:

Bilski.pdf

The Supreme Court released five opinions today; however, Bilski was again not amongst them.  Schwab v. Reilly was released today and, while Schwab has nothing to with IP, the significance is that Bilski is now the only case remaining from the November argument sitting.

At this point, it has to be considered a realistic possibility that the Supreme Court will hold the decision over till next term.

No Bilski Today

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We are still waiting for Bilski v. Kappos and are now 217 days removed from oral argument.  The opinions for today have all been released and Bilski is not amongst them. 

Maybe this Thursday?  According to SCOTUSBlog, more opinions may be released then.  For the next few days, however, we will just have to continue waiting.

We are now 211 days removed from oral argument in Bilski v. Kappos.  In comparison, KSR v. Teleflex took 153 days.  Commentators everywhere are speculating about the reason for the delay.  Some are considering it indicative of numerous dissents and concurrences, with no real consensus.  Others are suggesting that the Supreme Court is in "over their head," as this case will require challenging line drawing in the gray area of patentability.

Many commentators are seemingly urging the Supreme Court to "just go ahead and make a decision already."  At this point, the uncertainty has certainly reached the point of hampering productivity.  An entire branch of technology is in somewhat of a "holding pattern" while awaiting the decision of the Supreme Court.  However, it is important to be mindful of how important this decision actually is.  Technological progress in these fields could be severely impeded without a well thought out opinion here.

When a decision finally comes down, we will make sure to follow up with reaction.

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