Saturday, July 3, 2010

Bilski: Has the Court ruled right?

The much awaited Bilski vs Kappos was decided on Monday, 28th June by the US Supreme Court. The Bilski patent was rejected earlier by the Federal court on the ground that the claimed invention was not tied to a "machine" or caused "transformation of a physical object". However, the Supreme Court rejected that line of argument saying that rejecting a "process" by a test not explicitly stated in the statute will violate the "ordinary, contemporary, common meaning of words" in a statute. So "machine or transformation" test is not "exhaustive or exclusive" test for patentability.

SC rejected the patent not on "machine or transformation" test that was used by the Federal Court. But by the test of abstractness and justified the test by:

"Any suggestion in this Court’s case law that the Patent Act’s terms deviate from their ordinary meaning has only been an explanation for the exceptions for laws of nature, physical phenomena, and abstract ideas."

And the Bilski claims are abstract ideas and do not qualify as "process" to be patentable. Here is what the court said:

"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."

Now the question is has the court ruled correctly by categorically not rejecting all "business method patents" and "software patents". While I would love the court decision that would have completely rejected the entire category of "business methods/software" patents, I think the court has taken the right decision by not doing so. Courts refrained from categorical rejection as that would have stepped into the legislative domain. If people agree that some categories do not need patent protection, then the legislatures (US Congress in this case) should amend the law to exclude it (as India has done). Courts should not be drawing arbitrary lines that has not been contemplated by the legislatures. While this puts additional burden on the legislatures, that is where the burden lies and not on the courts.

The abstractness test is however vague and it will be interesting to see how the test is used in subsequent patent rulings. One issue is however certain: Patents that merely outline a process will have a hard time defending in the court. The patents has to be more particular in its explanation and usage. In my understanding, a lot of patents are mere description of a vague idea and they will get invalidated when brought in the court.

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