decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books

Gear

Groklaw Gear

Click here to send an email to the editor of this weblog.


You won't find me on Facebook


Donate

Donate Paypal


No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster
Here's Bilski: It's Affirmed, But . . .No Decision on Software Patentability - Updated
Monday, June 28 2010 @ 10:04 AM EDT

Here's the US Supreme Court's opinion [PDF] in Bilski v. Kappos, at last. The lower court's decision is affirmed, and so no patent for Bilski. However, business methods are not found totally ineligible for patents, just this one. But the door is not swung wide open. From the Syllabus:
Finally, while §273 appears to leave open the possibility of some business method patents, it does not suggest broad patentability of such claimed inventions.
I think the State Street and AT&T interpretations of Section 101 by the Federal Circuit just got tossed overboard, as I'll show you in a minute, in favor of Benson, Flook, and Diehr. That's a good thing, if so, since it was State Street that opened the floodgates for software patents. If you recall, one dissent to the US Court of Appeals for the Federal Circuit's opinion in Bilski, the one by Justice Mayer, thought the court had not gone far enough. Why? "State Street has launched a legal tsunami....Patents granted in the wake of State Street have ranged from the somewhat ridiculous to the truly absurd." This Supreme Court opinion acknowledges a need to find a limiting principle. And Benson, Flook and Diehr were the three cases cited as technically correct in the article Groklaw published last year, An Explanation of Computation Theory for Lawyers.

Not everyone on the court agrees in all particulars. So it's complicated, and obviously not all we hoped for. But it's encouraging in some respects as to the future. What is clear is that the "machine or transformation test," while useful, is not the *sole* test for eligibility to obtain a patent. That was what the US Court of Appeals for the Federal Circuit had decided was the sole test. The US Supreme Court decided not to decide today about the patentability of software as a category, but they did provide some guidelines, and they didn't slam the door.

Yes, Justice Ruth Ginsburg is on the bench, despite losing her husband in death yesterday. All the other decisions will be listed here.

Here's a snip mentioning software, beginning on page 13 of the PDF, 9 of the opinion:

The machine-or-transformation test may well provide a sufficient basis for evaluating processes similar to those in the Industrial Age—for example, inventions grounded in a physical or other tangible form. But there are reasons to doubt whether the test should be the sole criterion for determining the patentability of inventions in the Information Age. As numerous amicus briefs argue, the machine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals. See, e.g., Brief for Business Software Alliance 24–25; Brief for Biotechnology Industry Organization et al. 14–27; Brief for Boston Patent Law Association 8–15; Brief for Houston Intellectual Property Law Association 17–22; Brief for Dolby Labs., Inc., et al. 9–10.

In the course of applying the machine-or-transformation test to emerging technologies, courts may pose questions of such intricacy and refinement that they risk obscuring the larger object of securing patents for valuable inventions without transgressing the public domain. The dissent by Judge Rader refers to some of these difficulties. 545 F. 3d, at 1015. As a result, in deciding whether previously unforeseen inventions qualify as patentable “process[es],” it may not make sense to require courts to confine themselves to asking the questions posed by the machine-or-transformation test. Section 101’s terms suggest that new technologies may call for new inquiries. See Benson, supra, at 71 (to “freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology[,] . . . is not our purpose”).

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.

So, no blanket decision on categories. Sadly. But notably there is no confirmation of patentability of any categories here either, other than business methods. Here's the explanation, in part, on page 16 of the PDF:
At the same time, some business method patents raise special problems in terms of vagueness and suspect validity. See eBay Inc. v. MercExchange, L. L. C., 547 U. S. 388, 397 (2006) (KENNEDY, J., concurring). The Information Age empowers people with new capacities to perform statistical analyses and mathematical calculations with a speed and sophistication that enable the design of protocols for more efficient performance of a vast number of business tasks. If a high enough bar is not set when considering patent applications of this sort, patent examiners and courts could be flooded with claims that would put a chill on creative endeavor and dynamic change.

In searching for a limiting principle, this Court’s precedents on the unpatentability of abstract ideas provide useful tools. See infra, at 12–15.

Indeed, if the Court of Appeals were to succeed in defining a narrower category or class of patent applications that claim to instruct how business should be conducted, and then rule that the category is unpatentable because, for instance, it represents an attempt to patent abstract ideas, this conclusion might well be in accord with controlling precedent. See ibid. But beyond this or some other limitation consistent with the statutory text, the Patent Act leaves open the possibility that there are at least some processes that can be fairly described as business methods that are within patentable subject matter under §101.

What they did is pull back some from the lower court's decision slightly. They don't get the tech, I'm afraid. And they believed the BSA, which in my view is a mistake. And they think patents are a good thing. They didn't specifically address software patentability. They passed on that question. So, this will require more work, later cases. But I find it significant that they searched for a *limiting* principle, even if not ruling today on certain categories, like software patents. They did not say everything under the sun is patentable. And they are clearly aware that patents can get out of control to the point where they hinder, rather than foster, innovation. Have we seen that before in a Supreme Court opinion? They seem to think they are describing a future problem, though, not one already happening, as far as chilling innovation. That is already happening in software development, particularly for Free and Open Source software development. Presumably future cases may open opportunities to further explain the problem.

But although they didn't specifically decide about software patentability as a category, they did provide some strong hints and some guidance that I view as helpful overall. So, this will require more work, later cases, if software patents are to be recognized as the problem that they are. That's how law usually works, incrementally, like turning an ocean liner, not a car or a bike.

So where is the line to be drawn for business methods?

Finally, even if a particular business method fits into the statutory definition of a “process,” that does not mean that the application claiming that method should be granted. In order to receive patent protection, any claimed invention must be novel, §102, nonobvious, §103, and fully and particularly described, §112. These limitations serve a critical role in adjusting the tension, ever present in patent law, between stimulating innovation by protecting inventors and impeding progress by granting patents when not justified by the statutory design.
Why then doesn't Bilski qualify?
Even though petitioners’ application is not categorically outside of §101 under the two broad and atextual approaches the Court rejects today, that does not mean it is a “process” under §101. Petitioners seek to patent both the concept of hedging risk and the application of that concept to energy markets. App. 19–20. Rather than adopting categorical rules that might have wide-ranging and unforeseen impacts, the Court resolves this case narrowly on the basis of this Court’s decisions in Benson, Flook, and Diehr, which show that petitioners’ claims are not patentable processes because they are attempts to patent abstract ideas. Indeed, all members of the Court agree that the patent application at issue here falls outside of §101 because it claims an abstract idea.
That's a start. What they don't realize yet is that software is abstract ideas. They do sort of get it, actually:
In Benson, the Court considered whether a patent application for an algorithm to convert binary-coded decimal numerals into pure binary code was a “process” under §101. 409 U. S., at 64–67. The Court first explained that “‘[a] principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.’” Id., at 67 (quoting Le Roy, 14 How., at 175). The Court then held the application at issue was not a “process,” but an unpatentable abstract idea. “It is conceded that one may not patent an idea. But in practical effect that would be the result if the formula for converting . . . numerals to pure binary numerals were patented in this case.” 409 U. S., at 71. A contrary holding “would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself.” Id., at 72.
The opinion traces the history of all this in the major cases that discuss mathematical algorithms:
In Flook, the Court considered the next logical step after Benson. The applicant there attempted to patent a procedure for monitoring the conditions during the catalytic conversion process in the petrochemical and oil-refining industries. The application’s only innovation was reliance on a mathematical algorithm. 437 U. S., at 585–586. Flook held the invention was not a patentable “process.” The Court conceded the invention at issue, unlike the algorithm in Benson, had been limited so that it could still be freely used outside the petrochemical and oil-refining industries. 437 U. S., at 589–590.

Nevertheless, Flook rejected “[t]he notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process. Id., at 590. The Court concluded that the process at issue there was “unpatentable under §101, not because it contain[ed] a mathematical algorithm as one component, but because once that algorithm [wa]s assumed to be within the prior art, the application, considered as a whole, contain[ed] no patentable invention.” Id., at 594. As the Court later explained, Flook stands for the proposition that the prohibition against patenting abstract ideas “cannot be circumvented by attempting to limit the use of the formula to a particular technological environment” or adding “insignificant postsolution activity.” Diehr, 450 U. S., at 191–192.

Finally, in Diehr, the Court established a limitation on the principles articulated in Benson and Flook. The application in Diehr claimed a previously unknown method for “molding raw, uncured synthetic rubber into cured precision products,” using a mathematical formula to complete some of its several steps by way of a computer. 450 U. S., at 177. Diehr explained that while an abstract idea, law of nature, or mathematical formula could not be patented, “an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” Id., at 187. Diehr emphasized the need to consider the invention as a whole, rather than “dissect[ing] the claims into old and new elements and then . . . ignor[ing] the presence of the old elements in the analysis.” Id., at 188. Finally, the Court concluded that because the claim was not “an attempt to patent a mathematical formula, but rather [was] an industrial process for the molding of rubber products,” it fell within §101’s patentable subject matter. Id., at 192–193.

In light of these precedents, it is clear that petitioners’ application is not a patentable “process.”

By that reasoning, I think there is hope that they may see eventually that software is algorithms, and if the above reasoning is applied to software patents, they all have to go in due time, even if processes including them may survive, meaning the process remains patentable but not the math used. Obviously, the court knows you can't patent math. It's processes that might include math in the process, but not in the patent, as I read this. But that would, I think, have to exclude the math from the patent, because software is math, algorithms. For sure, abstract ideas can't be patented, they say, nor mathematical algorithms. What else is there in software, by the way? For example, here's more on why Bilski didn't qualify:
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.
And here's the most encouraging part, to me:
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.

Is that not saying that they reject the interpretations of §101 in State Street? If I'm reading it right, I'd call that a win. If you recall, Microsoft asked that the court agree with State Street and AT&T and set the bar at anything "useful, concrete and tangible":
The cases in which the "useful, concrete and tangible" phrase originated -- Alappat, State Street, and AT&T Corp. v. Excel Comms., Inc., 172 F.3d 1352 (Fed. Cir. 1999) -- all involved claims with physical limitations that satisfied the essential requirement of Section 101 as articulated by the Supreme Court. As the Supreme Court also made clear, however, physical limitations do not necessarily satisfy Section 101, if the practical effect of allowing the claim, viewed as a whole, would be to grant patent rights on an abstract idea or fundamental principle. See, e.g., Diehr, 450 U.S. at 191; Flook, 437 U.S. at 590; Benson, 409 U.S. at 72-73. Thus, where a process claim incorporates an abstract idea or fundamental principle, Section 101 requires confirmation that the claim is not simply a dressed-up version of that idea or principle -- that is, does the claimed process, viewed as a whole, have specific, practical utility? See, e.g., Diehr, 450 U.S. at 187. This Court's "useful, concrete and tangible" formulation is a useful analytical tool to confirm that an invention that is sufficiently physical in nature is indeed patent-eligible under Section 101. It does not, however, function as a stand-alone test or alternative to the requirement that a patent-eligible invention have a physical foundation.
I read today's decision as declining Microsoft's invitation to adopt that standard, and in fact rejecting it. So a mixed day. Definitely not as bad as it could have been, but not all we hoped for. But a step forward, in my view, even if only slightly.

That's how I read it, but as lawyers begin to analyze and post their interpretations and conclusions, I'll update this article so you can get a broad view of how the world sees this, not just me.

Update: Statements from Eben Moglen and Dan Ravicher of Software Freedom Law Center:

Attributable to Eben Moglen: "The landscape of patent law has been a cluttered, dangerous mess for almost two decades," said Eben Moglen, Chairman of the Software Freedom Law Center. "The confusion and uncertainty behind today's ruling guarantees that the issues involved in Bilski v. Kappos will have to return to the Supreme Court after much money has been wasted and much innovation obstructed."

Attributable to Daniel Ravicher: "For over a decade we've seen patents on ideas, thoughts, and even genes," said Daniel Ravicher, the legal director of the Software Freedom Law Center. "Today the Court missed an opportunity to send a strong signal that ideas are not patentable subject matter. The Court's rejection of Bilski's patent application got rid of a symptom of the disease, but failed to treat the real cause by reconfirming that thought and thought processes are not patentable."

So. A missed opportunity, from their perspective. Mine too. The court didn't address the Constitutional First Amendment issue raised in the SFLC's amicus brief, so they will have to do that again for a future case, which is disappointing. But I'm sure they'll do it.

Here's Tony Mauro on Law.com:

Justice Anthony Kennedy read from Bilski v. Kappos (pdf), in which the Court majority struck down the specific patent at issue, but did not rule out patent eligibility for other kinds of business methods. Stevens read from his concurrence, criticizing the Court ruling which he said will "cause mischief" by leaving open the possibility of patentability for intangible methods and processes.
Tomorrow is Justice Stevens' last day on the court. I'll post his dissent and the entire opinion as soon as I can get it done as text. If you can help, please sing out.

Bilski's lawyer, believe it or not, says he likes the decision overall for patent owners, according to AP, and even hopes for wiggle room for his client:

Michael Jakes, the lawyer who represented Bilski and Warsaw, said it may just mean a rewording of the patent application to “make the claims less abstract.”

“For most patent owners, it’s a very good decision,” Jakes, a lawyer at Finnegan Henderson in Washington, said in a telephone interview. “It eliminates the federal circuit’s very restrictive test and leaves open patents for things that are not physical” inventions.

The pro patents guys never give in or give up. They just reword.

Ashby Jones at the Wall St. Journal Law Blog got more reactions from patent attorneys, all of whom express relief:

To Shearman & Sterling’s Michael Bednarek, the ruling comes a “big relief.” Bednarek says that “there was a big possibility that the patent system was going to get gutted, that the court would go too far and put up too many hurdles to getting anything patented.”

Had the court clung to the “machine-or-transformation test,” in Bednarek’s opinion, lower courts would have been forced to wipe out many, many patents, and that would have hurt the U.S. economy. “Look, the smartest people are going into financial services, medical technologies, computer technologies,” he said. “This isn’t the industrial age anymore, and the innovation in this country isn’t solely in the rust belt. To hold that would be to help foreign economies at our own expense.”

Jones Day’s John Biernacki thinks the ruling affords courts “greater flexibility” when looking at business-method patents. “The district courts were using the Federal Circuit’s ruling to strike down a lot of patents, especially those pertaining to e-commerce,” said Biernacki. “Patentees and courts now will have greater latitude.”

Indeed. That's a bug, not a feature. Patent lawyers love to talk about the economy, but I never see them factor in the damage to FOSS and what that does to the economy. It's no doubt quantifiable. Someone should probably work on that for the next case, I'm thinking.

More on that, and some more lawyers' reactions, from the Wall Street Journal's news coverage:

Bank of America Corp. (BAC), Google Inc. (GOOG) and a group of Internet retailers are among those who argued in friend-of-the court briefs that the explosion of questionable business-method patents has harmed innovation and led to a wave of costly litigation.

The pharmaceutical and biotechnology industries, along with high-tech companies like International Business Machines Corp. (IBM) and Yahoo Inc. (YHOO) had argued that a lower court's legal test limiting business-method patents did not adequately protect technological innovations.

Edward Reines, a patent lawyer with the Weil Gotshal law firm, said the court largely punted in the case. "This appeared to be based on a lack of confidence that it could determine rules in this tough terrain with such high-stakes and rapidly evolving technology," Reines said.

Alex Hadjis, a patent attorney with Morrison & Foerster, said the Supreme Court's decision to disavow the appeals court's restrictive test could actually benefit some method patents. "Business method patents in view of this opinion appear to clearly be in business," he said.

Here's Google's amicus brief [PDF] and Bank of America's [PDF], if you'd like to know why patents harm the economy and innovation, if that's a new thought to you. Here's IBM's [PDF]. More on Groklaw's permanent Bilski resource page. The complete collection of amicus briefs is available on the ABA's website.

Two more lawyers from Stephen Shankland's coverage on CNET:

Advocates for software patents hailed the ruling. Tom Sydnor, a fellow at the free-market Progress and Freedom Foundation, called it a "moderate, sensible position" that "rejected implausible bright-line rules that would prohibit" patenting software or business methods.

"This is not the bright-line test anybody was hoping for," said Steven Bauer, an intellectual-property attorney and co-head of the Proskauer Patent Law Group. Instead, it will add another layer to every software patent case, requiring defendants to show their patents aren't abstract ideas, he said.

Steven J. Vaughan-Nichols at ComputerWorld spoke to Peter Brown at FSF, just prior to the opinion being published:
Peter Brown, executive director of the FSF (Free Software Foundation) told me before the decision that, "Whatever the Supreme Court decides, it's clear that this issue won't end anytime soon. Congress is considering a patent reform bill, and the US government has been working to push its software patent laws to other countries through treaties like ACTA [Anti-Counterfeiting Trade Agreement]." In other words, after this decision, we're as far away from the complete overhaul of the U.S. patent system that we, software developers and users alike, need as ever.
I'm not as agitated and upset as some, because I didn't really expect this to be the final word. And it's not. And I'm optimistic by nature. Maybe covering SCO gave me a thick skin, with all the ups and downs, so I don't get thrown by either too much. But as I view it, now it's just time to begin looking for the next, better case involving software patents directly to push the court toward technical reality. They have left that door open. That's what's significant to me in what happened today. Now it's time for me to read it all more carefully and slowly and work on the text. -- End Update.]

Meanwhile, here are the Syllabus section and Opinion as text, so you can read it all and form your own impressions. As always, for anything that matters, check the PDF itself. We strive for accuracy, but we are only human:

*****************************

(Slip Opinion)

OCTOBER TERM, 2009

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

BILSKI ET AL. v. KAPPOS, UNDER SECRETARY OF
COMMERCE FOR INTELLECTUAL PROPERTY AND
DIRECTOR, PATENT AND TRADEMARK OFFICE

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE FEDERAL CIRCUIT

No. 08964. Argued November 9, 2009--Decided June 28, 2010

Petitioners' patent application seeks protection for a claimed invention that explains how commodities buyers and sellers in the energy market can protect, or hedge, against the risk of price changes. The key claims are claim 1, which describes a series of steps instructing how to hedge risk, and claim 4, which places the claim 1 concept into a simple mathematical formula. The remaining claims explain how claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand. The patent examiner rejected the application on the grounds that the invention is not implemented on a specific apparatus, merely manipulates an abstract idea, and solves a purely mathematical problem. The Board of Patent Appeals and Interferences agreed and affirmed. The Federal Circuit, in turn, affirmed. The en banc court rejected its prior test for determining whether a claimed invention was a patentable "process" under Patent Act, 35 U. S. C. §101 -- i.e., whether the invention produced a "useful, concrete, and tangible result," see, e.g., State Street Bank & Trust Co v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373 -- holding instead that a claimed process is patent eligible if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. Concluding that this "machine-or-transformation test" is the sole test for determining patent eligibility of a "process" under §101, the court applied the test and held that the application was not patent eligible.

Held: The judgment is affirmed.

545 F. 3d 943, affirmed.

JUSTICE KENNEDY delivered the opinion of the Court, except as to Parts IIB2 and IIC2, concluding that petitioners' claimed invention is not patent eligible. Pp. 48, 1011, 1216.
(a) Section 101 specifies four independent categories of inventions or discoveries that are patent eligible: "process[es]," "machin[es]," "manufactur[es]," and "composition[s] of matter." "In choosing such expansive terms, . . . Congress plainly contemplated that the patent laws would be given wide scope," Diamond v. Chakrabarty, 447 U. S. 303, 308, in order to ensure that "'ingenuity should receive a liberal encouragement,'" id., at 308309. This Court's precedents provide three specific exceptions to §101's broad principles: "laws of nature, physical phenomena, and abstract ideas." Id., at 309. While not required by the statutory text, these exceptions are consistent with the notion that a patentable process must be "new and useful." And, in any case, the exceptions have defined the statute's reach as a matter of statutory stare decisis going back 150 years. See Le Roy v. Tatham, 14 How. 156, 174. The §101 eligibility inquiry is only a threshold test. Even if a claimed invention qualifies in one of the four categories, it must also satisfy "the conditions and requirements of this title," §101(a), including novelty, see §102, nonobviousness, see §103, and a full and particular description, see §112. The invention at issue is claimed to be a "process," which §100(b) defines as a "process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material." Pp. 45.
(b) The machine-or-transformation test is not the sole test for patent eligibility under §101. The Court's precedents establish that although that test may be a useful and important clue or investigative tool, it is not the sole test for deciding whether an invention is a patent-eligible "process" under §101. In holding to the contrary, the Federal Circuit violated two principles of statutory interpretation: Courts "'should not read into the patent laws limitations and conditions which the legislature has not expressed,'" Diamond v. Diehr, 450 U. S. 175, 182, and, "[u]nless otherwise defined, 'words will be interpreted as taking their ordinary, contemporary, common meaning,'" ibid. The Court is unaware of any ordinary, contemporary, common meaning of "process" that would require it to be tied to a machine or the transformation of an article. Respondent Patent Director urges the Court to read §101's other three patentable categories as confining "process" to a machine or transformation. However, the doctrine of noscitur a sociis is inapplicable here, for §100(b) already explicitly defines "process," see Burgess v. United States, 553 U. S. 124, 130, and nothing about the section's inclusion of those other categories suggests that a "process" must be tied to one of them.

2

Finally, the Federal Circuit incorrectly concluded that this Court has endorsed the machine-or-transformation test as the exclusive test. Recent authorities show that the test was never intended to be exhaustive or exclusive. See, e.g., Parker v. Flook, 437 U. S. 584, 588, n. 9. Pp. 58.
(c) Section 101 similarly precludes a reading of the term "process" that would categorically exclude business methods. The term "method" within §100(b)'s "process" definition, at least as a textual matter and before other consulting other Patent Act limitations and this Court's precedents, may include at least some methods of doing business. The Court is unaware of any argument that the "ordinary, contemporary, common meaning," Diehr, supra, at 182, of "method" excludes business methods. Nor is it clear what a business method exception would sweep in and whether it would exclude technologies for conducting a business more efficiently. The categorical exclusion argument is further undermined by the fact that federal law explicitly contemplates the existence of at least some business method patents: Under §273(b)(1), if a patent-holder claims infringement based on "a method in [a] patent," the alleged infringer can assert a defense of prior use. By allowing this defense, the statute itself acknowledges that there may be business method patents. Section 273 thus clarifies the understanding that a business method is simply one kind of "method" that is, at least in some circumstances, eligible for patenting under §101. A contrary conclusion would violate the canon against interpreting any statutory provision in a manner that would render another provision superfluous. See Corley v. United States, 556 U. S. ___, ___. Finally, while §273 appears to leave open the possibility of some business method patents, it does not suggest broad patentability of such claimed inventions. Pp. 1011.
(d) Even though petitioners' application is not categorically outside of §101 under the two atextual approaches the Court rejects today, that does not mean it is a "process" under §101. Petitioners seek to patent both the concept of hedging risk and the application of that concept to energy markets. Under Benson, Flook, and Diehr, however, these are not patentable processes but attempts to patent abstract ideas. Claims 1 and 4 explain the basic concept of hedging and reduce that concept to a mathematical formula. This is an unpatentable abstract idea, just like the algorithms at issue in Benson and Flook. Petitioners' remaining claims, broad examples of how hedging can be used in commodities and energy markets, attempt to patent the use of the abstract hedging idea, then instruct the use of well-known random analysis techniques to help establish some of the inputs into the equation. They add even less to the underlying abstract principle than the invention held patent ineligible in Flook. Pp. 12-

3

15.
(e) Because petitioners' patent application can be rejected under the Court's precedents on the unpatentability of abstract ideas, the Court 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.

Nothing in today's opinion should be read as endorsing the Federal Circuit's past interpretations of §101. See, e.g., State Street, 49 F. 3d, at 1373. The appeals court may have 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. In disapproving an exclusive machine-or-transformation test, this Court by no means desires to preclude the Federal Circuit's development of other limiting criteria that further the Patent Act's purposes and are not inconsistent with its text. P. 16.

KENNEDY, J., delivered the opinion of the Court, except for Parts II B2 and IIC2. ROBERTS, C. J., and THOMAS and ALITO, JJ., joined the opinion in full, and SCALIA, J., joined except for Parts IIB2 and IIC 2. STEVENS, J., filed an opinion concurring in the judgment, in which GINSBURG, BREYER, and SOTOMAYOR, JJ., joined. BREYER, J., filed an opinion concurring in the judgment, in which SCALIA, J., joined as to Part II.

1

Cite as: 561 U. S. ____ (2010)

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 08964

_________________

BERNARD L. BILSKI AND RAND A. WARSAW,
PETITIONERS v. DAVID J. KAPPOS, UNDER
SECRETARY OF COMMERCE FOR INTEL-
LECTUAL PROPERTY AND DIRECTOR,
PATENT AND TRADEMARK OFFICE

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT

[June 28, 2010]

JUSTICE KENNEDY delivered the opinion of the Court, except as to Parts IIB2 and IIC2.*

The question in this case turns on whether a patent can be issued for a claimed invention designed for the business world. The patent application claims a procedure for instructing buyers and sellers how to protect against the risk of price fluctuations in a discrete section of the economy. Three arguments are advanced for the proposition that the claimed invention is outside the scope of patent law: (1) it is not tied to a machine and does not transform an article; (2) it involves a method of conducting business; and (3) it is merely an abstract idea. The Court of Appeals ruled that the first mentioned of these, the so-called machine-or-transformation test, was the sole test to be used for determining the patentability of a "process" under the Patent Act, 35 U. S. C. §101.

1

BILSKI v. KAPPOS

Opinion of the Court

I

Petitioners' application seeks patent protection for a claimed invention that explains how buyers and sellers of commodities in the energy market can protect, or hedge, against the risk of price changes. The key claims are claims 1 and 4. Claim 1 describes a series of steps instructing how to hedge risk. Claim 4 puts the concept articulated in claim 1 into a simple mathematical formula. Claim 1 consists of the following steps:
"(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumers;

"(b) identifying market participants for said commodity having a counter-risk position to said consumers; and

"(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions." App. 1920.

The remaining claims explain how claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand for energy. For example, claim 2 claims "[t]he method of claim 1 wherein said commodity is energy and said market participants are transmission distributors." Id., at 20. Some of these claims also suggest familiar statistical approaches to determine the inputs to use in claim 4's equation. For example, claim 7 advises using well-known random analysis techniques to determine how much a seller will gain "from each transaction under each

2

historical weather pattern." Id., at 21.

The patent examiner rejected petitioners' application, explaining that it "'is not implemented on a specific apparatus and merely manipulates [an] abstract idea and solves a purely mathematical problem without any limitation to a practical application, therefore, the invention is not directed to the technological arts.'" App. to Pet. for Cert. 148a. The Board of Patent Appeals and Interferences affirmed, concluding that the application involved only mental steps that do not transform physical matter and was directed to an abstract idea. Id., at 181a-186a.

The United States Court of Appeals for the Federal Circuit heard the case en banc and affirmed. The case produced five different opinions. Students of patent law would be well advised to study these scholarly opinions.

Chief Judge Michel wrote the opinion of the court. The court rejected its prior test for determining whether a claimed invention was a patentable "process" under §101 -- whether it produces a "'useful, concrete, and tangible result'" -- as articulated in State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373 (1998), and AT&T Corp. v. Excel Communications, Inc., 172 F. 3d 1352, 1357 (1999). See In re Bilski, 545 F. 3d 943, 959960, and n. 19 (CA Fed. 2008) (en banc). The court held that "[a] claimed process is surely patent-eligible under §101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing." Id., at 954. The court concluded this "machine-or-transformation test" is "the sole test governing §101 analyses," id., at 955, and thus the "test for determining patent eligibility of a process under §101," id., at 956. Applying the machine-or-transformation test, the court held that petitioners' application was not patent eligible. Id., at 963966. Judge Dyk wrote a separate concurring opinion, providing historical support for the

3

court's approach. Id., at 966-976.

Three judges wrote dissenting opinions. Judge Mayer argued that petitioners' application was "not eligible for patent protection because it is directed to a method of conducting business." Id., at 998. He urged the adoption of a "technological standard for patentability." Id., at 1010. Judge Rader would have found petitioners' claims were an unpatentable abstract idea. Id., at 1011. Only Judge Newman disagreed with the court's conclusion that petitioners' application was outside of the reach of §101. She did not say that the application should have been granted but only that the issue should be remanded for further proceedings to determine whether the application qualified as patentable under other provisions. Id., at 997.

This Court granted certiorari. 556 U. S. ___ (2009).

II

A

Section 101 defines the subject matter that may be patented under the Patent Act:
"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."
Section 101 thus specifies four independent categories of inventions or discoveries that are eligible for protection: processes, machines, manufactures, and compositions of matter. "In choosing such expansive terms . . . modified by the comprehensive 'any,' Congress plainly contemplated that the patent laws would be given wide scope." Diamond v. Chakrabarty, 447 U. S. 303, 308 (1980). Congress took this permissive approach to patent eligibility to ensure that "'ingenuity should receive a liberal encouragement.' " Id., at 308-309 (quoting 5 Writings of Thomas

4

Jefferson 7576 (H. Washington ed. 1871)).

The Court's precedents provide three specific exceptions to §101's broad patent-eligibility principles: "laws of nature, physical phenomena, and abstract ideas." Chakrabarty, supra, at 309. While these exceptions are not required by the statutory text, they are consistent with the notion that a patentable process must be "new and useful." And, in any case, these exceptions have defined the reach of the statute as a matter of statutory stare decisis going back 150 years. See Le Roy v. Tatham, 14 How. 156, 174-175 (1853). The concepts covered by these exceptions are "part of the storehouse of knowledge of all men . . . free to all men and reserved exclusively to none." Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U. S. 127, 130 (1948).

The §101 patent-eligibility inquiry is only a threshold test. Even if an invention qualifies as a process, machine, manufacture, or composition of matter, in order to receive the Patent Act's protection the claimed invention must also satisfy "the conditions and requirements of this title." §101. Those requirements include that the invention be novel, see §102, nonobvious, see §103, and fully and particularly described, see §112.

The present case involves an invention that is claimed to be a "process" under §101. Section 100(b) defines "process" as:

"process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material."
The Court first considers two proposed categorical limitations on "process" patents under §101 that would, if adopted, bar petitioners' application in the present case: the machine-or-transformation test and the categorical exclusion of business method patents.

5

B

1

Under the Court of Appeals’ formulation, an invention is a “process” only if: “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” 545 F. 3d, at 954. This Court has “more than once cautioned that courts 'should not read into the patent laws limitations and conditions which the legislature has not expressed.’” Diamond v. Diehr, 450 U. S. 175, 182 (1981) (quoting Chakrabarty, supra, at 308; some internal quotation marks omitted). In patent law, as in all statutory construction, “[u]nless otherwise defined, 'words will be interpreted as taking their ordinary, contemporary, common meaning.’” Diehr, supra, at 182 (quoting Perrin v. United States, 444 U. S. 37, 42 (1979)). The Court has read the §101 term “manufacture” in accordance with dictionary definitions, see Chakrabarty, supra, at 308 (citing American Fruit Growers, Inc. v. Brogdex Co., 283 U. S. 1, 11 (1931)), and approved a construction of the term “composition of matter” consistent with common usage, see Chakrabarty, supra, at 308 (citing Shell Development Co. v. Watson, 149 F. Supp. 279, 280 (DC 1957)).

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. See Parker v. Flook, 437 U. S. 584, 588–589 (1978). This Court has not indicated that the existence of these well-established exceptions gives the Judiciary carte blanche to impose other limitations that are inconsistent with the text and the statute’s purpose and design. Concerns about attempts to call any form of human activity a “process” can be met by making sure the claim meets the requirements of §101.

Adopting the machine-or-transformation test as the sole

6

test for what constitutes a "process" (as opposed to just an important and useful clue) violates these statutory interpretation principles. Section 100(b) provides that "[t]he term 'process' means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material." The Court is unaware of any "'ordinary, contemporary, common meaning,'" Diehr, supra, at 182, of the definitional terms "process, art or method" that would require these terms to be tied to a machine or to transform an article. Respondent urges the Court to look to the other patentable categories in §101 -- machines, manufactures, and compositions of matter -- to confine the meaning of "process" to a machine or transformation, under the doctrine of noscitur a sociis. Under this canon, "an ambiguous term may be given more precise content by the neighboring words with which it is associated." United States v. Stevens, 559 U. S. ___, ___ (2010) (slip op., at 12) (internal quotation marks omitted). This canon is inapplicable here, for §100(b) already explicitly defines the term "process." See Burgess v. United States, 553 U. S. 124, 130 (2008) ("When a statute includes an explicit definition, we must follow that definition" (internal quotation marks omitted)).

The Court of Appeals incorrectly concluded that this Court has endorsed the machine-or-transformation test as the exclusive test. It is true that Cochrane v. Deener, 94 U. S. 780, 788 (1877), explained that a "process" is "an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing." More recent cases, however, have rejected the broad implications of this dictum; and, in all events, later authority shows that it was not intended to be an exhaustive or exclusive test. Gottschalk v. Benson, 409 U. S. 63, 70 (1972), noted that "[t]ransformation and reduction of an article 'to a different state or thing' is the clue to the pat-

7

entability of a process claim that does not include particular machines." At the same time, it explicitly declined to "hold that no process patent could ever qualify if it did not meet [machine or transformation] requirements." Id., at 71. Flook took a similar approach, "assum[ing] that a valid process patent may issue even if it does not meet [the machine-or-transformation test]." 437 U. S., at 588, n. 9.

This Court's precedents establish that the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible "process."

2

It is true that patents for inventions that did not satisfy the machine-or-transformation test were rarely granted in earlier eras, especially in the Industrial Age, as explained by Judge Dyk’s thoughtful historical review. See 545 F. 3d, at 966–976 (concurring opinion). But times change. Technology and other innovations progress in unexpected ways. For example, it was once forcefully argued that until recent times, “well-established principles of patent law probably would have prevented the issuance of a valid patent on almost any conceivable computer program.” Diehr, 450 U. S., at 195 (STEVENS, J., dissenting). But this fact does not mean that unforeseen innovations such as computer programs are always unpatentable. See id., at 192–193 (majority opinion) (holding a procedure for molding rubber that included a computer program is within patentable subject matter). Section 101 is a “dynamic provision designed to encompass new and unforeseen inventions.” J. E. M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U. S. 124, 135 (2001). A categorical rule denying patent protection for “inventions in areas not

8

contemplated by Congress . . . would frustrate the purposes of the patent law." Chakrabarty, 447 U. S., at 315.

The machine-or-transformation test may well provide a sufficient basis for evaluating processes similar to those in the Industrial Age -- for example, inventions grounded in a physical or other tangible form. But there are reasons to doubt whether the test should be the sole criterion for determining the patentability of inventions in the Information Age. As numerous amicus briefs argue, the machine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals. See, e.g., Brief for Business Software Alliance 24-25; Brief for Biotechnology Industry Organization et al. 14-27; Brief for Boston Patent Law Association 8-15; Brief for Houston Intellectual Property Law Association 17-22; Brief for Dolby Labs., Inc., et al. 9-10.

In the course of applying the machine-or-transformation test to emerging technologies, courts may pose questions of such intricacy and refinement that they risk obscuring the larger object of securing patents for valuable inventions without transgressing the public domain. The dissent by Judge Rader refers to some of these difficulties. 545 F. 3d, at 1015. As a result, in deciding whether previously unforeseen inventions qualify as patentable "process[es]," it may not make sense to require courts to confine themselves to asking the questions posed by the machine-or-transformation test. Section 101's terms suggest that new technologies may call for new inquiries. See Benson, supra, at 71 (to "freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology[,] . . . is not our purpose").

It is important to emphasize that the Court today is not commenting on the patentability of any particular inven-

9

tion, 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.

C

1

Section 101 similarly precludes the broad contention that the term “process” categorically excludes business methods. The term “method,” which is within §100(b)’s definition of “process,” at least as a textual matter and before consulting other limitations in the Patent Act and this Court’s precedents, may include at least some methods of doing business. See, e.g., Webster’s New International Dictionary 1548 (2d ed. 1954) (defining “method” as “[a]n orderly procedure or process . . . regular way or manner of doing anything; hence, a set form of procedure adopted in investigation or instruction”). The Court is unaware of any argument that the "'ordinary, contemporary, common meaning,'" Diehr, supra, at 182, of “method” excludes business methods. Nor is it clear how far a prohibition on business method patents would reach, and whether it would exclude technologies for conducting a business more efficiently. See, e.g., Hall, Business and Financial Method Patents, Innovation, and Policy, 56 Scottish J. Pol. Econ. 443, 445 (2009) (“There is no precise definition of . . . business method patents”).

The argument that business methods are categorically

10

outside of §101's scope is further undermined by the fact that federal law explicitly contemplates the existence of at least some business method patents. Under 35 U. S. C. §273(b)(1), if a patent-holder claims infringement based on "a method in [a] patent," the alleged infringer can assert a defense of prior use. For purposes of this defense alone, "method" is defined as "a method of doing or conducting business." §273(a)(3). In other words, by allowing this defense the statute itself acknowledges that there may be business method patents. Section 273's definition of "method," to be sure, cannot change the meaning of a prior-enacted statute. But what §273 does is clarify the understanding that a business method is simply one kind of "method" that is, at least in some circumstances, eligible for patenting under §101.

A conclusion that business methods are not patentable in any circumstances would render §273 meaningless. This would violate the canon against interpreting any statutory provision in a manner that would render another provision superfluous. See Corley v. United States, 556 U. S. ___, ___ (2009) (slip op., at 9). This principle, of course, applies to interpreting any two provisions in the U. S. Code, even when Congress enacted the provisions at different times. See, e.g., Hague v. Committee for Industrial Organization, 307 U. S. 496, 529530 (1939) (opinion of Stone, J.). This established rule of statutory interpretation cannot be overcome by judicial speculation as to the subjective intent of various legislators in enacting the subsequent provision. Finally, while §273 appears to leave open the possibility of some business method patents, it does not suggest broad patentability of such claimed inventions.

2

Interpreting §101 to exclude all business methods simply because business method patents were rarely issued

11

until modern times revives many of the previously discussed difficulties. See supra, at 89. At the same time, some business method patents raise special problems in terms of vagueness and suspect validity. See eBay Inc. v. MercExchange, L. L. C., 547 U. S. 388, 397 (2006) (KENNEDY, J., concurring). The Information Age empowers people with new capacities to perform statistical analyses and mathematical calculations with a speed and sophistication that enable the design of protocols for more efficient performance of a vast number of business tasks. If a high enough bar is not set when considering patent applications of this sort, patent examiners and courts could be flooded with claims that would put a chill on creative endeavor and dynamic change.

In searching for a limiting principle, this Court's precedents on the unpatentability of abstract ideas provide useful tools. See infra, at 1215. Indeed, if the Court of Appeals were to succeed in defining a narrower category or class of patent applications that claim to instruct how business should be conducted, and then rule that the category is unpatentable because, for instance, it represents an attempt to patent abstract ideas, this conclusion might well be in accord with controlling precedent. See ibid. But beyond this or some other limitation consistent with the statutory text, the Patent Act leaves open the possibility that there are at least some processes that can be fairly described as business methods that are within patentable subject matter under §101.

Finally, even if a particular business method fits into the statutory definition of a "process," that does not mean that the application claiming that method should be granted. In order to receive patent protection, any claimed invention must be novel, §102, nonobvious, §103, and fully and particularly described, §112. These limitations serve a critical role in adjusting the tension, ever

12

present in patent law, between stimulating innovation by protecting inventors and impeding progress by granting patents when not justified by the statutory design.

III

Even though petitioners' application is not categorically outside of §101 under the two broad and atextual approaches the Court rejects today, that does not mean it is a "process" under §101. Petitioners seek to patent both the concept of hedging risk and the application of that concept to energy markets. App. 1920. Rather than adopting categorical rules that might have wide-ranging and unforeseen impacts, the Court resolves this case narrowly on the basis of this Court's decisions in Benson, Flook, and Diehr, which show that petitioners' claims are not patentable processes because they are attempts to patent abstract ideas. Indeed, all members of the Court agree that the patent application at issue here falls outside of §101 because it claims an abstract idea.

In Benson, the Court considered whether a patent application for an algorithm to convert binary-coded decimal numerals into pure binary code was a "process" under §101. 409 U. S., at 6467. The Court first explained that "'[a] principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.'" Id., at 67 (quoting Le Roy, 14 How., at 175). The Court then held the application at issue was not a "process," but an unpatentable abstract idea. "It is conceded that one may not patent an idea. But in practical effect that would be the result if the formula for converting . . . numerals to pure binary numerals were patented in this case." 409 U. S., at 71. A contrary holding "would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself." Id., at 72.

In Flook, the Court considered the next logical step after

13

Benson. The applicant there attempted to patent a procedure for monitoring the conditions during the catalytic conversion process in the petrochemical and oil-refining industries. The application's only innovation was reliance on a mathematical algorithm. 437 U. S., at 585586. Flook held the invention was not a patentable "process." The Court conceded the invention at issue, unlike the algorithm in Benson, had been limited so that it could still be freely used outside the petrochemical and oil-refining industries. 437 U. S., at 589590. Nevertheless, Flook rejected "[t]he notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process." Id., at 590. The Court concluded that the process at issue there was "unpatentable under §101, not because it contain[ed] a mathematical algorithm as one component, but because once that algorithm [wa]s assumed to be within the prior art, the application, considered as a whole, contain[ed] no patentable invention." Id., at 594. As the Court later explained, Flook stands for the proposition that the prohibition against patenting abstract ideas "cannot be circumvented by attempting to limit the use of the formula to a particular technological environment" or adding "insignificant postsolution activity." Diehr, 450 U. S., at 191192.

Finally, in Diehr, the Court established a limitation on the principles articulated in Benson and Flook. The application in Diehr claimed a previously unknown method for "molding raw, uncured synthetic rubber into cured precision products," using a mathematical formula to complete some of its several steps by way of a computer. 450 U. S., at 177. Diehr explained that while an abstract idea, law of nature, or mathematical formula could not be patented, "an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection." Id., at 187. Diehr emphasized

14

the need to consider the invention as a whole, rather than "dissect[ing] the claims into old and new elements and then . . . ignor[ing] the presence of the old elements in the analysis." Id., at 188. Finally, the Court concluded that because the claim was not "an attempt to patent a mathematical formula, but rather [was] an industrial process for the molding of rubber products," it fell within §101's patentable subject matter. Id., at 192-193.

In light of these precedents, it is clear that petitioners' application is not a patentable "process." Claims 1 and 4 in petitioners' application explain the basic concept of hedging, or protecting against risk: "Hedging is a fundamental economic practice long prevalent in our system of commerce and taught in any introductory finance class." 545 F. 3d, at 1013 (Rader, J., dissenting); see, e.g., D. Chorafas, Introduction to Derivative Financial Instruments 75-94 (2008); C. Stickney, R. Weil, K. Schipper, & J. Francis, Financial Accounting: An Introduction to Concepts, Methods, and Uses 581-582 (13th ed. 2010); S. Ross, R. Westerfield, & B. Jordan, Fundamentals of Corporate Finance 743-744 (8th ed. 2008). 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 pre-empt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea.

Petitioners' remaining claims are broad examples of how hedging can be used in commodities and energy markets. Flook established that limiting an abstract idea to one field of use or adding token postsolution components did not make the concept patentable. That is exactly what the remaining claims in petitioners' application do. These claims attempt to patent the use of the abstract idea of hedging risk in the energy market and then instruct the

15

use of well-known random analysis techniques to help establish some of the inputs into the equation. Indeed, these claims add even less to the underlying abstract principle than the invention in Flook did, for the Flook invention was at least directed to the narrower domain of signaling dangers in operating a catalytic converter.

* * *

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.

It is so ordered.

16

[PJ: For the concurring opinions by Justices Stevens and Breyer, go to this page.]


  


Here's Bilski: It's Affirmed, But . . .No Decision on Software Patentability - Updated | 243 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections thread ...
Authored by: nsomos on Monday, June 28 2010 @ 10:50 AM EDT
If there be any corrections for this short article,
please post them here. A summary in title would be nice.

[ Reply to This | # ]

Newspicks discussion here please ...
Authored by: nsomos on Monday, June 28 2010 @ 10:52 AM EDT
Should you have comments on newspicks, this might be
a good place for them. Please remember to let us know
which newspick you are referring to. Providing the
link may be helpful in case the given pick has
scrolled off the main page.

[ Reply to This | # ]

That was quick...
Authored by: leopardi on Monday, June 28 2010 @ 11:00 AM EDT

I was just reading the judgement a few seconds after it was posted from the SCOTUS live blog. So your analysis must have been lightning fast.

[ Reply to This | # ]

Not terribly bad, but hardly good ...
Authored by: nsomos on Monday, June 28 2010 @ 11:02 AM EDT
I suppose if Bilski had been held patentable, it would have
been a much worse outcome. But as PJ points out, ... the
supremes this time, did not understand the tech, and this
particular opinion does not do much if any good, in helping
to eliminate software patents.

Well, at least we can stop wondering how Bilski is going
to turn out.

[ Reply to This | # ]

One word
Authored by: Anonymous on Monday, June 28 2010 @ 11:02 AM EDT
Cop-out

[ Reply to This | # ]

They missed the point, because they are too old to understand maybe?
Authored by: Anonymous on Monday, June 28 2010 @ 11:03 AM EDT
Brian Cantwell Smith was right.

It may take the next generation to understand that there
is nothing really special about computers. This ruling
shows the Justices almost afraid to touch them (kinda like
how our older parents approach computing, vs the
understanding of computing already by those who have grown
up with it around them.

Lawyers, or a large number of them, my sisten included,
and so we can add Judges to the list, ... and such as the
SCO case shows, do not understand computers.

Sad but true.

[ Reply to This | # ]

off topic posts here please
Authored by: nsomos on Monday, June 28 2010 @ 11:06 AM EDT
For all your posts that are off-topic for this article,
while being on-topic for Groklaw in general.

Please read the posting hints, and try to follow
the comments policy. Thanks.

[ Reply to This | # ]

COMES here please ..
Authored by: nsomos on Monday, June 28 2010 @ 11:08 AM EDT
If you are helping out by summarizing or transcribing
a COMES document, please place it here. It is most
helpful to use HTML markup posted as Plain Old Text
to make it easy for PJ to put it where it should go.

Thanks.

[ Reply to This | # ]

Here's Bilski: It's Affirmed, But . . .
Authored by: Anonymous on Monday, June 28 2010 @ 11:13 AM EDT
<blockquote> They don't get the tech, I'm afraid. So, that will require
more work, later cases.</blockquote>

or the appearance of more up to date judges that knows a computer from a
telegraph key.

[ Reply to This | # ]

Maybe they do get the tech but they're afraid of being irrelevant
Authored by: Tolerance on Monday, June 28 2010 @ 11:25 AM EDT
I've now read the opinion, and some of the briefs.

They do, I think, get the tech. But they are afraid that whatever solid position
they take on patentability of broad swathes of tech will be made to look silly
by the pace of advance.

It's sad because it's clear from the opinion that they won't rule out the
patenting of abstractions such as math. Even such exceptions as “laws of
nature, physical phenomena, and abstract ideas” are "not required by the
statutory text."

It's not a statutory question but a constitutional one they need to worry about.
The Patent Office is an arm of the Federal Government; as such any patent grant
infringing on freedom of thought and expression should be subject to first
amendment review. I'm sure the Supremes don't believe this. They should. The
negative effects on industry can only get worse from here.

---
Grumpy old man

[ Reply to This | # ]

I figured this would be the outcome
Authored by: TennSeven on Monday, June 28 2010 @ 11:40 AM EDT
Even when the Supreme Court entirely agrees it is hard in
cases like these to get them to make sweeping decisions that
affect more than the case in front of them. I think that,
unfortunately, it will take a true software patents case to
get the Supremes to rule on it, and even then it would have
to be very representative of the issue in general, and not
something too quirky, to get a good ruling affecting all
software patents.

I haven't looked into it, but does anyone know if the EFF or
any other groups have ever looked for a good test case to
take up on appeal?

-TennSeven

[ Reply to This | # ]

  • So did I - Authored by: Anonymous on Tuesday, June 29 2010 @ 03:10 AM EDT
Not endorsing State Street
Authored by: Anonymous on Monday, June 28 2010 @ 11:41 AM EDT
And nothing in today’s opinion should be read as endors-
ing 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 pre-
cisely because its case law had not adequately identified
less extreme means of restricting business method pat-
ents, 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 limit-
ing 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.

[ Reply to This | # ]

Lawyers Win
Authored by: Anonymous on Monday, June 28 2010 @ 11:42 AM EDT
No clear rules, no one can tell what is patentable and what isn't till an
appeals court rules on it after multiple years and millions of dollars. Full
employment for laywers. Small surprise given all three branches of government
are dominated by people who make their living arguing over the law.

[ Reply to This | # ]

One small victory at least
Authored by: jdg on Monday, June 28 2010 @ 11:55 AM EDT
Well, I won because we were concerned about this PARTICULAR patent application,
which was used against us as a threat.

---
SCO is trying to appropriate the "commons"; don't let them [IANAL]

[ Reply to This | # ]

bad assumptions ...
Authored by: nsomos on Monday, June 28 2010 @ 12:00 PM EDT
From page 14 of the opinion ...
-----------------
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.
-----------------

I would hazard a guess, that the vast majority if not all
software patent applications are not from private individuals,
but from businesses. For things like mechanical inventions,
I would imagine that the number of non-business applicants
is a much greater percentage, than for software.

Copyright is adequate protection for the expression of
ideas in software. Individual programmers understand this.
Business try to get software patents, as protection because
other business have software patents. The only ones who
really benefit are the lawyers.

It isn't really lots of private inventors seeking software
patents. It is lots of businesses as a protection from
the dysfunction that the allowance of software patents has
created. Programmers can innovate just fine without
software patents, and can protect their expressions with
copyright.

So SCOTUS is seeing the result of a bad decision, and
misinterpreting this result as an indication that there
is something about software patents that may be worth
providing patent protection for. This is plain wrong.

Perhaps someone could come up with a good analogy of
this disconnect. One (may not be good) that comes to
my mind, is what we see with situations where there is
some artificial scarcity. When an artificial scarcity
of something is created, more and more people try
harder and harder to obtain the artificially scarce thing.
Others may see this result, and fearing they might be
left out, will themselves try to get the artificially
scarce thing. Only in this case, it is businesses who
are reacting and trying to get software patents.

Right now, there are no individual inventors being
protected by software patents. Only businesses are
using them as bargaining tools for cross-licensing
agreements or in some cases by trolls. It is an
artificial situation where only the lawyers for
software patents benefit from it. Everyone else
(pretty much) loses.

[ Reply to This | # ]

Here's Bilski: It's Affirmed, But . . .No Decision on Software Patentability
Authored by: Anonymous on Monday, June 28 2010 @ 12:10 PM EDT
Is that not saying that they reject the interpretations of §101 in State Street? If I'm reading it right, I'd call that a win.
No, I don't think you're reading that right. At the very least, it's possible to read the opinion as coming to precisely the opposite conclusion. For example, from Dennis Crouch's writeup at Patently-O (emphasis added):
Software: Although the court expressly refused to rule on the patentability of software, it appears that software will largely remain patentable. The court neither endorsed nor rejected the Federal Circuit's past interpretations of Section 101 -- Noting that "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."
Methinks it might be useful to focus more carefully on objective analysis, rather than hearing what you want to hear.

--CF

[ Reply to This | # ]

Two thoughts
Authored by: Ian Al on Monday, June 28 2010 @ 12:19 PM EDT
I note what they say.
As numerous amicus briefs argue, the machine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals.
They are saying that they don't want to prevent some fabulous new tech being patented just on the basis of the machine-or-transformation test. However, it may well be a sufficient test for business processes similar to those from the industrial age. I read that as saying that anything that parallels something that could have equally been invented in the industrial age could be rejected on just that basis even if it had some modern tech applied to it so long as the modern tech was not an integral part of the innovation. In other words, doing maths with a calculator rather than a pen and paper does not become patentable just because the calculator is used to make it quicker and more reliable (no comments about my mental arithmetic skills, please).
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.
They were warned about patent trolls, the damage to proprietary software companies and to the open source business. They talk about striking the balance. They seem to be saying that the present situation does not do that because it is stacked against 'not granting monopolies over procedures that others would discover by independent, creative application of general principles'.

I read this as a shot across the bows of the courts (not the USPTO) in that the courts must be careful to test whether someone skilled in the arts could have come up with the same invention especially if the evidence shows no sign of the defendant using the patent publication or some other way of using the materials of the patent holder to duplicate the patented invention. Could it also be a warning shot to the patent lawyers about obfuscating invention statements and details? Could it be a warning to the USPTO about too many over-broad patents being issued? I have never read about the courts testing the 'skilled in the arts' issue and yet this is both a Constitutional issue and the only issue raised, in this instance, by SCOTUS.

They seem to be asking 'how could a submarine patent have been violated by someone independently coming up with the same invention when they never knew about the submarine patent. They don't want to grant monopolies over procedures that others would discover by independent, creative application of general principles. How can penalising the defendant and enriching the troll possibly be protecting the inventor. I notice they did not say 'the owner', but 'the inventor'. This may be a misunderstanding of how patents work (yes, it is a sly dig at SCOTUS).

They have gone out of their way to avoid any denial of the patentability of the tech that they list, but, by the same token, they go out of their way to avoid confirming that it is patentable. They specifically mention software and the patenting of algorithms. So the 'software is maths' argument is ignored. Sorry, POiR.

It is a cop-out over the fundamental issues put before them, but I don't think it is a confirmation of the status quo.

Got to go, now. My glass is still half-full.

---
Regards
Ian Al
SCOG, what ever happened to them? Whatever, it was less than they deserve.

[ Reply to This | # ]

All Software is Math?
Authored by: codemaster2b on Monday, June 28 2010 @ 12:31 PM EDT
I have been unable to find the evidence to support it, but in school I was
taught that it is theoretically possible to represent any piece of software as a
purely mathematical construction. If there exists a mathematical proof to this
end, would it not be a simple extension to say, legally, that software is
unpatentable?

(With the possible exception listed in the third case quoted by the supreme
court where the software was part of a rubber manufacturing process.)

[ Reply to This | # ]

Our special friend Florian says
Authored by: Anonymous on Monday, June 28 2010 @ 12:49 PM EDT
not one software patent invalidated. Decision a major
disappointment. (on fosspatents.blogspot.com)

[ Reply to This | # ]

Given the amicus briefs, not a surprise
Authored by: Anonymous on Monday, June 28 2010 @ 12:52 PM EDT

Given the wide range of opinions in the amicus briefs, I'm not really surprised they decided to forego any sweeping changes.

On the one hand, you've got many arguing for a big reduction in software patents, especially those briefing from an open source point of view. On the other hand, you've got a lot of companies briefing against Bilski getting his patent, and saying the scope needs to be narrowed some, but saying its important to keep software patentable. And you've got IBM saying that patent protection on software fueled the explosive growth of open source!

Given all that, and given the fact that the Constitutional grant of power to Congress to enact a patent system is very broad so that it is clear that there isn't a Constitutional issue with software patents (which would make it something the Supreme Court would pretty much have to take a stand on), it makes a lot of sense that they would consider the issue of software patents to be something for Congress to deal with, not the Court.

[ Reply to This | # ]

What a terrible disappointment.
Authored by: Anonymous on Monday, June 28 2010 @ 01:34 PM EDT
The Supreme Court yet again makes a mockery of itself. With a chance to finally
reverse some of the economic damage that software patents are causing (or at
least prevent them from causing more of it in the future), they totally passed
on it.

If the U.S. Supreme Court won't step up and do something about software patents,
we're probably going to be stuck with them for another 20 or 30 years. How
frustrating.

[ Reply to This | # ]

Here's Bilski: It's Affirmed, But . . .No Decision on Software Patentability - Updated
Authored by: StormReaver on Monday, June 28 2010 @ 02:15 PM EDT
And the United States continues its inexorable slide into self-destructive
obsolescence.

Business method patents will continue to grow into an ever-heavy anchor on
American competitiveness, and software patents will continue the
self-destruction of a once vibrant software ecosystem.

There is a scene in Attack of The Clones where Obi-wan is fighting Jango Fett.
Obi-wan's hands are tied, so he summons his lightsaber to free his bonds.
Instead of catching the lightsaber and freeing himself, the lightsaber flies by
while he watches helplessly.

In this case, the Supreme Court is Obi-wan, and the lightsaber is the United
States' future. The Supreme Court had an ideal opportunity to set right a major
wrong, but just managed to watch helplessly as the obvious whooshed over their
heads.

[ Reply to This | # ]

Holdings.
Authored by: Anonymous on Monday, June 28 2010 @ 02:18 PM EDT

The way I see the results are as follows.

1. 9 justices said that Bilski's method is not patent eligible subject matter.

2. 9 justices said that the machine-or-transformation test cannot be the sole guide for deciding which processes are patent eligible subject matter.

3. Only 4 justices sided with a broad minded view of patent eligible processes (ie, Kennedy's opinion sections II-B-2 and II-C-2).

4. 5 justices said that at least some (but which ones were never specified with any level of clarity) business methods could be patent eligible, while 4 said that business methods were never patentable.

5. 5 justices do not agree with the federal circuit's previous "useful, concrete, or tangible result" test as being an overly liberal standard for deciding patent eligible subject matter.

6. I think to truly understand the holding of the current court, Breyer's opinion which was joined by Scalia (ie, his section II), should be carefully consulted, since that is the most narrow holding, and I am convinced that at least 5 justices would support that position.

IANAL, but IAAPE. My opinion only, obviously.

[ Reply to This | # ]

Here's Bilski: It's Affirmed, But . . .No Decision on Software Patentability - Updated
Authored by: Anonymous on Monday, June 28 2010 @ 02:35 PM EDT
This decision can only be interpreted as an absolute, crushing defeat for those
against the patenting of software (and, consequently for freedom). While some
may optimistically pontificate that the court has simply "remained
silent" as to the patentability of software, the court has clearly
indicated that at least some business methods are patentable. This means
essentially that we are no longer safe from patents covering methods of petting
your dog, parting your hair, or resolving marital problems. If the Circuit
Court's decision could be considered a minor victory for freedom, today's
decision represents a complete reversal of that victory.

If business methods, the most pernicious form of patent, are patentable, this
surely guarantees that the somewhat less pernicious category of patent, the
software patent, is patentable as well in the view of the court, regardless of
whether they have left the door open to possibly changing their mind in the
future. It has been over twenty years since the court last addressed the issue
of patentable subject matter, and it may be just as long until they address it
again.

Moreover, Justice Stevens, quite possibly the last remaining voice of reason on
the court (at least with respect to this issue), has retired and will be
replaced by Kagan, who is likely just another neoliberal crony who will bow to
the will of her corporate overlords, evidenced at least by her stint at Goldman
Sachs. It is well known that prevailing corporate interests get their way here
in the good ol' US of A, and all the big software corporations have developed
veritable arsenals of software patents that they would like to remain valid,
thank you very much (with the notable exception of Google, who argued against
the patentability of software in their amicus).

In sum, today's decision reaffirms my longstanding belief that there is no hope.
We are completely, fully, and utterly screwed. There are very few, if any,
bastions of freedom that remain upon the globe. There is virtually nowhere you
can go where you will be unmolested by the oppressive and overarching reach of
the corporate greed-machine and its government prostitutes. God help us all.

[ Reply to This | # ]

Well that's disappointing...
Authored by: SilverWave on Monday, June 28 2010 @ 05:02 PM EDT
:-(

---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

Disappointing
Authored by: Anonymous on Monday, June 28 2010 @ 05:29 PM EDT
Has anyone else been disappointed by some of the recent Supreme Court opinions?
It's not that they're way off base, but it seems like whenever they get near the
right answer, they get there from completely the wrong direction. And it's not
just this opinion, either.

If I had to describe it, I would say that I feel like many of the justices are
simply out of touch.

The subtext of this ruling is interesting, though. It seems almost like the
minority switched sides to avoid a more sweeping ruling.

[ Reply to This | # ]

Consider the car.
Authored by: darkonc on Monday, June 28 2010 @ 05:38 PM EDT
The car is a general purpose device -- much like a computer.

Let's say that State Street - like patents were allowed when the car was created.

  • A car carrying carrots is a different machine than a car just carrying a person. ... patentable.
  • Similarly with a car carrying potatoes ... patentable.
  • consider a car carrying cereal ... patentable
  • How about a car with a tank of water .... obviously patentable.
I think you know where this is going .... Pretty soon, somebody wanting to throw a bag of groceries and a 5-gallon watter bottle in the back of their car is going to need to negotiate patent rights with a couple dozen patent trolls.

Simply put, the machine itself should be patentable, but the various uses that you can put it to should not be.

... using a screwdriver to open a jar?

---
Powerful, committed communication. Touching the jewel within each person and bringing it to life..

[ Reply to This | # ]

When communism and capitalism merge
Authored by: Anonymous on Monday, June 28 2010 @ 06:00 PM EDT
This court has repeatedly sided with big money, at the expense of the people.
Killing software patents clearly would be against these interests, but software
patents also sometimes hurt big money, too, as I4i demonstrates. The court
simply decided this would be the best way to serve those interests, but it looks
like they couldn't make up their minds exactly how to do that.

But all this is beside the real point -- the concentration of wealth.

When this gets to a certain point, capitalism and communism become the same. Not
in their stated ideals, but in their practice. The points of failure become so
few, collapse is inevitable.

So, in the space of 20 years (1989-2008 inclusive), we are treated to the
collapse of the Soviet Union and the near collapse of capitalism, a confluence
that no one but me seems to have noticed. The history of economic panics in the
U.S. suggests that Wall Street will eventually destroy us -- and put Al Qaeda to
shame.

And we'll be just where Russia was after the collapse of communism. Do you think
the U.S. will do better than Russia in rebuilding from the rubble -- and the
oil? Can we learn from Russia's mistakes? Will Russia learn from ours?

In a way, too, it is a religious problem (in the general sense), not an economic
problem. Communism was a religion, and unregulated capitalism is also a
religion.

Do you think these events are trying to tell us something? Does this mean we
actually have to do some critical thinking, instead of letting our religious
leaders tell us what to do? What do we call this brave new world, a world
without big capitalism or big communism? I'm sure academics will come up with a
fancy name. I just call it the greatest good for the greatest number. I hope
that's not too atheistic.

[ Reply to This | # ]

Moglen says it in a Nutshell: despair
Authored by: Anonymous on Monday, June 28 2010 @ 06:10 PM EDT
> "The confusion and uncertainty behind today's ruling guarantees
that the issues involved in Bilski v. Kappos will have to return to the
Supreme Court after much money has been wasted and much innovation
obstructed." <
http://www.softwarefreedom.org/news/2010/jun/28/sflc-bilski-decision-
response/

[ Reply to This | # ]

Too big for a single court decision
Authored by: TiddlyPom on Tuesday, June 29 2010 @ 05:26 AM EDT
As PJ stated in her comments, I believe that this is just too big for a single
court decision. The problem is that there are just too many people making money
out of patents of many types.

This decision has not ratified software patents (which is a very good thing) but
neither has it nullified them. We are still in limbo and I suspect that
Congress will have to have a debate on the matter (which is a bad thing in this
case I believe as they will be lobbied by 'big business' such as Microsoft and
Apple and supporters of software freedom - amongst which I count myself - will
be ignored as usual).

Make no mistake - both Microsoft and Apple are terrified of Linux and the open
source movement in general. Android in particular is rapidly gaining on the
iPhone/iOS. Although Android's marketplace is not as mature as Apple's, it has
more freedom and space to grow unlike Apple's which is controlled by a
(non-too-benign) 'software' dictator(s). Owning a HTC Hero myself (with MoDaCo
firmware) and having used friends iPhones, I actually prefer Android - not just
for the freedom but the usability. Try tethering an iPhone to Linux! (With
Ubuntu I connect the phone to the laptop via a USB cable and tick a tick box on
the phone and it is tethered and just works.)

Modern Linux distributions such as Ubuntu 10.04, Fedora 13, Mepis 8.5, PCLinuxOS
2010, MeeGo etc are miles better than Windows XP and just as usable as Windows 7
or Apple "Snow Leopard".

These are a real threat to the proprietary world as they offer similar better
facilities/performance than proprietary products. Proprietary software
companies cannot compete on cost then the only way that they can compete is to
try and "tax" open source software with software patents hence the
current lawsuit against HTC and the Microsoft 'protection racket'.

I have no desire so see either Microsoft, Apple, Oracle or any of the other
proprietary software vendors go out of business. They CAN compete against open
source by offering extra facilities/bundled support but they need to embrace
change rather than trying to compete unfairly by extortion (which is what the
software patents system is IHMO).

The situation with copyright is just as stupid hence the idiotic suggestions
that "Creative Commons" is somehow trying to undermine/destroy the
publishing industry! Copyright was invented to protect individuals whilst they
made some profit for a few years - not as a means of taxing the world for over a
century. Publications such as (say) "I Robot" (still copyrighted?) or
"Snow White" (film) have been making profits for their organizations
for over half a century. It is time they were in the public domain.

We just have to be a little patient here. Opinions are changing and businesses
are starting to see the real benefits of the open source model and also that
sharing ideas (and even God Forbid copyrighted published materials) benefits
everyone including businesses.

This isn't the decision that we wanted perhaps but we should not be despondent.
Hopefully discussion generated by "Bilski" might start to change
opinions.

---
Microsoft Software is expensive, bloated, bug-ridden and unnecessary.
Use Open Source Software instead.

[ Reply to This | # ]

Translation for Non-lawyers
Authored by: Ian Al on Tuesday, June 29 2010 @ 06:59 AM EDT
Michael Jakes, the lawyer who represented Bilski and Warsaw, said it may just mean a rewording of the patent application to “make the claims less abstract.”

“For most patent owners, it’s a very good decision,” ... “It eliminates the federal circuit’s very restrictive test and leaves open patents for things that are not physical” inventions.
Translation: With the appeals court finding as it stood, there was no way around the 'machine or transformation' test. The SCOTUS decision means, possibly, millions of dollars in additional patent legal work and future litigation. How could this decision be anything other than a good thing?

---
Regards
Ian Al
SCOG, what ever happened to them? Whatever, it was less than they deserve.

[ Reply to This | # ]

I think that Bilsky effectively outlaws software patents..
Authored by: darkonc on Tuesday, June 29 2010 @ 07:37 AM EDT
The SCOTUS seemed to say that a huge chunk of Bilski was rejected because it was reducible to an equation. I'm going to, for a moment, presume that this means that anything reducible to an equation is un-patentable.

If we combine this with the proof (shown a few months ago on this site) that anything which is expressible as a computer program is also expressible as an equation, then we are now just a short nudge away from proving that anything expressible as a program (software) is patently unpatentable.

The other thing that I'm going to claim is that the road from State Street to rampantly obscene software patents was paved over the backs of a programming community that didn't know the damage being done by the patent lawyer community and that didn't have the organization to be able to effectively fight the piecemeal destruction of the art.

With the advent of the freed software and Open Source community, generally -- and GrokLaw, specifically, that era is now over. The software community is now willing and able to fight against the over-patenting of software and lawyers will no longer be able to run roughshod over common sense in this area without a principled push-back.

(presuming, of course, that we're now willing to push back, which seems to be clearly the case.)

---
Powerful, committed communication. Touching the jewel within each person and bringing it to life..

[ Reply to This | # ]

Here's Bilski: It's Affirmed, But . . .No Decision on Software Patentability - Updated
Authored by: Differance on Tuesday, June 29 2010 @ 09:03 PM EDT
While some are disappointed in this ruling in terms of how it might relate to
software patents, I see it as promising in that connection. It simply forces the
argument against software patents to be based on their being abstract ideas. By
finding the machine-or-transformation principle not sufficient and by not
finding an exclusion on business method patents, the court actually pushes us to
making the right point regarding software patents. I believe all the confusion
among these Justices would be sorted out if they acknowledged the following.

Software patents are patents not just on abstract ideas, but on *pure* abstract
ideas. By pure I don't mean "extremely" -- I mean "independent of
empirical facts or particulars," like math.

The general purpose logic processor does *pure* logical operations; it follows
that the instructions provided to that processor are likewise *pure* logic. What
translates a pure logical algorithm or process to something of specific use is
the devices you attach to the logic processor; it is in principle perfectly
conceivable that the exact same set of logic instructions could control entirely
different processes, just depending on what devices you attach. And while
higher-level, human-readable code uses language that humans can relate to
specific things or uses in the empirical world (variable names like
"PartNo" or "EmployeeID" or "Chemical1Proportion,"
or function names like "InitiateStirring" or
"TurnOnBlender"), at bottom the compiled code is a pure logical
abstraction.

The point is, the software is in principle not patentable, though it may be the
case that a particular empirical process that that code is being used to
control, is patentable. But what decides that is the empirical process as such,
not the pure algorithm that the code expresses.

Note that interestingly, this ruling may also undermine the European
"computer-implemented inventions" formula, since it disallows the
machine-or-transformation test as solely determining the question, and then it
specifically resorts to the abstract idea exclusion. Note also that the Court
states that its ruling should not be construed as endorsing the Federal
Circuit's past interpretations of patentable subject matter under section 101.

So I see this ruling as simply excluding the easier resolution to the software
patent issue (an approach not really on point and not really addressing the
nature of the issue of software patents) that sees software patents becoming
untenable along with business methods, as well as the notion that what makes
something patentable is that it is a machine or a transformation.

What makes software unpatentable is not really directly related to either of
those points, but rather to the fact that it is *pure* abstraction. You don't
have to say patents only cover machines and transformations to eliminate
software patents. Instead, all you have to do is show that software is always
abstract because the nature of the logic processor is inherently pure -- it
deals only in bits/numbers and logical and methematical operations and
algorithms -- and when one says those numbers and algorithms are meant to refer
to something more, what you're really saying is that there's also an empirical
process, alongside the pure code, which is the actual process which may be
patentable or not.

[ Reply to This | # ]

Here's Bilski: It's Affirmed, But . . .No Decision on Software Patentability - Updated
Authored by: Anonymous on Wednesday, June 30 2010 @ 02:01 PM EDT
You're right it is in the complete 20 volume version, and the online version
(which I forgot I have an account for). Seems to have originated around 1911 in
England. They aren't clear on the etymology, or don't want to admit it was
borrowed from the French (1856).

To be quite "frank" (go ahead look up the OED definition, I dare you,
IDDDY), I'd forgotten about all the silly stuff put into the OED as
"words" and definitions (like "big bang", and 7 entries for
"set", covering pages). BTW, the OED Online is maybe the best (or
worst) way to use the OED.

And is self-explanatory as to why I rarely ever use my OED. Preferring simpler,
more sensible dictionaries. The complete OED is also exemplary as to how easy it
is to confuse an actual word in the English language as a nonsense word, and
vice versa. There's simply too many variants, no person could remember them all.
Nor easily find out if one is or is not a word, without aid of a ridiculously
large dictionary.

-- Celtic_hackr

[ Reply to This | # ]

Here's Bilski: It's Affirmed, But . . .No Decision on Software Patentability - Updated
Authored by: soronlin on Thursday, July 01 2010 @ 08:56 AM EDT
Can I put up a straw-man here for discussion?

Say I have a dog, and I don't like taking him for a walk in the rain. Instead I have a couple of treadmills, and he walks on one, and I walk on the other.

Now controlling his treadmill is difficult because I have to lean over, so I want to control his treadmill from mine. Let's say the manufacturer makes that simple by having an output shaft on one and an input shaft on the other. So far no patent issues.

Then one day I notice that my dog would rather walk faster than I walk. I do a bit of experimenting and find just how much faster, and then make up a device with a couple of cogs in it so his treadmill goes that much faster. I think this is a good idea, patent it ('001) and start making them in my garage.

Six months later I upgrade the treadmills to the latest versions and I find that the input and output shafts have gone and there is now a computer interface instead. I build a device containing a computer following the manufacturers specification except for one line of code.

DogSpeed = ManSpeed * 1.36

In order to keep my business active I also patent this ('002) and start making these devices in my garage alongside the original ones.

Some time later someone starts making four devices that are identical to mine:

  1. A mechanical device to put between two treadmills
  2. A computer-based device to put between two treadmills
  3. A mechanical device to put between two industrial machines
  4. A computer-based device to put between two industrial machines.

In your individual opinions, which of my patents are valid, and which competing devices should infringe?

[ Reply to This | # ]

Hanging hat on wrong case . . .No Decision on Software Patentability - Updated
Authored by: Anonymous on Friday, July 02 2010 @ 08:53 PM EDT
Bilski was the wrong case on which to hang the hope that software patents would
be quashed. It was a business methods question.

I'v about given up hope on the concept of writing code without a patent lawyer
on 24 hour call reviewing every function I write. Nothing but a bunch of
corporate apologists on the supreme court.

[ Reply to This | # ]

Get rid of patents entirely!
Authored by: rlhamil on Friday, July 09 2010 @ 05:14 PM EDT
Ok, I've had too much caffeine, so I'm going to go way too far!

Based on the article about computability theory, every program is a
discovery rather than a creation, since in an appropriate system of
representation, it corresponds to one among many very large
numbers.

In physics, every particle and their interaction, that makes up you, me,
the computer, the physical manifestations of the program it is
running, and the entire universe is defined by a set of quantum
numbers. And all of these are intimately connected, in ways we're only
beginning to learn. It is possible that even time is an illusion, and all
that moves is our perspective, across a universe that is really nothing
more than a vast network of numbers.

The logical conclusion is that _everything_ is information, and
_everything_ is discovery rather than creation. Assume for a moment,
even if you're an atheist, the existence of an absolute ultimate creator.
Surely the creation of everything ex nihilo, would be creation rather
than discovery. Sorry, no. The creator him(/her/it)self already existed
and discovered creation, and the very _concept_ of creation and of
other-ness, within him(/her/it)self. Some atheists use that to argue
against the existence of a creator, since to them, an uncreated creator
is an unnecessary complication compared to an uncreated universe.

Creation and discovery can arrive at the same conclusions from the
same starting point, although in everyday experience we may think of
them as very different; but if there is a difference, I'm not seeing it.
Even the methods may be similar. Discovery can incorporate trial and
error; but ask any inventor to be candid, and they'll admit quite a few
of both along the way to their invention.

I think the distinction between creation and discovery has _no_ useful
meaning whatsoever, whether applied to physical objects or to
information. A specialized digital device can be implemented in non-
programmable circuitry, on as a program running on programmable
circuitry, or as something perhaps in-between on an FPGA. Physicality
doesn't distinguish them. A drug can be designed or discovered; and
what if a designed program of discovery finds something that has
been in use for centuries, along with perhaps the usual soup of
natural variants? (Lovastatin, red yeat rice)


Maybe one can distinguish between whether something is intended to
manipulate objects, human activity, or information. But probably not;
they're all information too.

I think I'm arriving at the conclusion that copyrights and patents are
different ways of saying the same thing, and should be subject to
a single definition and set of laws.

This also suggests to me that quality of programs and quality of
physical objects should be subject to a single set of standards when it
comes to liability. Some advocates of computer security and software
quality might like that statement, but given the practical difficulties of
creating correct programs, perhaps those that profit from product
liability suits ought to fear it instead.

_None_ of the above is novel, except perhaps (but I doubt it) the
juxtaposition of all the above concepts, which anyone else could have
done.

Finally, let me make it even worse. The concept of the uniqueness or
originality of either creation or discovery is dubious. The history of
literature and science shows similar writings and discoveries whenever
sufficient prerequisites were in place and used similarly. I'm not
enough up on literature to cite cases, but I know I have read of similar
stories by independent authors that depended on prior literature (and
on the marketplace) for ideas and direction. Alfred Wallace and
Charles Darwin arrived at the idea of natural selection almost in
parallel, and certain aspects of Wallace's ideas were even more
powerful; yet Darwin is more often remembered. This happens in
music, art, and the development of physical objects as well.

I think if one were honest, one could only say whether it is or isn't
clear that B stole the work of A, or vice versa; but surely both
depended on alpha and beta (or aleph and beth) before them.

Eliminating patents in favor of copyrights even makes sense from the
traditional standard of patents, where at one time one had to have a
working model. An _implementation_ may be distinctive, even if, with
a sufficiently limited number of parameters being measured, other
implementations produce similar results. Let them compete on
efficiency, cost, suitability in a particular environment, etc.

[ Reply to This | # ]

Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )