Last night I listened through the oral argument before the
Supreme Court in
Bilski v. Kappos. There is a nice
website at www.oyez.org
that has audio files of oral
arguments at the Supreme Court.
These seem to go back a long way: a few months
ago, I was
listening to the audio file for Gottschalk v. Benson
back in
1972. The website has a case page for
Bilski v.
Kappos (2009), and the audio file for the oral argument
is available
there, and moreover the text scrolls past,
identifying the lawyers and the
Justices, in synchronization
with the audio.
The transcript of the
oral argument is available on
Groklaw
here.
I think PJ summarized the essentials of the argument very well
in her second
paragraph:
For sure the questions from the court to Bilski's
attorney, J. Michael
Jakes, and to the attorney for the government, Deputy
Solicitor General
Malcolm L. Stewart, are interesting. I conclude that the
justices
are way ahead of them on just how crazy the current patent system
has
become. Thank heaven there were so many amicus briefs, because
reasonable,
logical arguments were few and far between from either attorney, in
my
view, in that they each seemed to argue very much for the status quo,
or in
the case of Bilski's lawyer for an even broader free-for-all
in
patentability.
Maybe I am overstating the impression I got
from listening though
the audio last night, but the metaphor that occurred to me
was
that of the Supreme Court Justices as a pride of lions hunting down
the
unstated assumptions behind the positions of the parties as expressed
in their
briefs.
The lawyer for Bilski, Mr. Jakes, was refreshingly
straightforward
and consistent. I would summarize his case as
follows:
- Any ‘invention’ that falls within one of
the
four categories of process, machine, manufacture, or
composition of matter
and that is useful is
patent eligible, and the ‘inventors’ are
therefore
entitled to a patent, provided only that the conditions of
sections
102 (statutory ‘novelty’), 103
(statutory
‘non-obviousness’) and 112 (written
description,
definiteness, enablement etc.) have been met.
- Under the
plain words of the statute, any ‘process’
is
patent-eligible.
- Therefore, if the USPTO has not identified any prior
art
invalidating the claims under the conditions of sections 102
and 103,
Bernard Bilski and Rand Warsaw are entitled to
their
patent.
(Disclaimer: I am not a lawyer, and others better
qualified
than me might summarize Mr. Jakes's case on behalf of Bilski more
accurately than
I can.)
Justices Scalia, Breyer, Ginsburg and Sotomeyer,
put the contrary
view, namely that patents are intended for inventions in
the
“manufacturing arts”, not for the ‘inventions’
of a
Dale Carnegie, or for speed dating. Then Chief Justice Roberts
moves in,
observing that to him, claim 1 seems to be drawn to an
abstract
idea:
“ What -- I'm looking at your
Claim 1, in Joint Appendix page
19 to 20. How is that not an abstract idea? You
initiate a series of
transactions between commodity providers and commodity
consumers. You
set a fixed price at the consumer end, you set a fixed price at
the other
end, and that's it. I mean, I could patent a process where I do the
same
thing. I initiate a series of transactions with sellers. I initiate
a
series of transactions with buyers. I buy low and sell high. That's my
patent
for maximizing wealth. I don't see how that's different than your
claim number
1.“
I suggest that this observation is particularly
significant, with
the benefit of hindsight, because it expresses the ground on
which
the majority of the Supreme Court held that Bilski was not entitled
to a
patent:
“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.”
Bilski v. Kappos, 130 S.Ct. at
3219-3220.
It should be noted that, all though the above
quotation is taken from
the ‘Opinion of the Court’, delivered by
Justice Kennedy,
and joined by four other Justices, it is nevertheless stated
that all
nine Justices were in agreement that the patent application claimed
an
abstract idea, and was therefore unpatentable.
Returning to the oral
argument, Mr. Jakes in his response to Chief
Justice Roberts is consistent:
“If that was a novel and unobvious
method, then it should be patentable,
but it's eligible as subject
matter…”
Justice Kennedy
moves in. He points out that the insurance business
really began in England in
1680, and that, according to Mr. Jakes's
view, the process of issuing insurance
would have been patentable.
But “it's difficult for me to think that
Congress would want
to—would have wanted to give only one person the
capacity to
issue insurance.”
Consistent with his brief, Mr.
Jakes has no option but to suggest
that the process of issuing insurance would
be patent-eligible.
Presumably the Supreme Court had by now got the measure of
Mr. Jakes,
and their remaining questions seem directed to establishing how
far
he would go in his view that all forms of human activity are
potentially
patent-eligible. Chief Justice Roberts is very clear as to the
kinds of
processes that Mr. Jakes would consider patentable: “ You get
on
the phone and you call the baker and you get on the phone and you
call the
grocer and say: I can set up a deal for both of you?”.
And indeed Mr.
Jakes has to agree that such a “process”
could be patent-eligible.
Similarly Justice Kennedy establishes that,
to make the insurance
‘process’ patent-eligible, it would
suffice for a person to go over
to the Bureau of Statistics and compile
statistics on life
expectancy.
But perhaps the most memorable probe was that of Justice
Scalia:
“You know, you mention that there are all
these—these new
areas that didn't exist in the past because of modern
business and
what-not, but there are also areas that existed in the past that
don't
exist today. Let's take training horses. Don't you think
that—that
some people, horse whisperers or others, had some, you know,
some insights
into the best way to train horses? And that should have been
patentable
on your theory.”
This puts Mr. Jakes in the
unenviable position of trying to explain
away the fact the Commissioner of
Patents did not issue substantial
numbers of patents to horse-whisperers in the
19th century.
Justices Stevens and Kennedy also establish that, as
regards
Supreme Court jurisprudence, Mr. Jakes bases his argument
on the dicta
in Diamond v. Diehr. And when Justice Breyer
presents the economic
justification for awarding patents, Mr. Jakes
can only respond with “I
think the answer is to follow the
statute”. In other words, he bases his
argument on the theory
that the ‘plain words’ of Section 101 of the
statute
must be taken literally.
When Mr. Jakes's time has come to an
end, the Court move on to
consider the arguments put forward by the Deputy
Solicitor General,
Malcolm L. Stewart. The interrogation of Mr. Stewart by
the
Justices proves to be significantly more revealing.
Mr. Stewart is
very keen to sell the Machine or Transformation
test for statutory
processes to the Supreme Court. Justice Alito
makes his only contribution to
the proceedings:
Near—near the end of your brief you
argue that—that
the patent here is—is not—is unpatentable on
the
independent ground that it would preempt the abstract idea of
hedging
consumption—consumption risk. If you—if you are right
about
that, is this a good case for us to get into the—into the very
broad
issue that Petitioner has raised?
With the benefit of
hindsight, we know that this is precisely the ground
on which the majority on
the Supreme Court deemed Bilski's patent claims
invalid. But, according to Mr.
Stewart, this is not the approach that
the Government wanted the Supreme Court
to adopt: “ I—I think
we would certainly prefer to win on our
primary ground…”
Mr. Stewart continues his efforts to sell
the
Machine or Transformation Test.
Justice Sotomayor floats an
alternative: the Supreme Court could
simply declare that business methods are
unpatentable. (This of course
proved to be the position taken in Justice
Stevens's opinion, concurring
in judgment, which was joined by Justices Breyer,
Ginsburg and Sotomayor.)
But the idea puts Mr. Stewart in a fluster. He is
worried that a
categorical exception for business methods would cast a shadow
over
the Federal Circuit's holding
in State Street: “So to say that
business methods are
categorically ineligible for patent protection would
eliminate new
machines, including programmed computers, that are useful because
of
their contributions to the operation of
businesses.…”
Justice Breyer then counters by pointing out
that the
Machine or Transformation Test approved by the Federal
Circuit
as its sole dispositive test raises more questions
than it
answers:
“Now, you say what is it they have done in
this case in the Federal
Circuit? They have pulled back. That's a move. That's a
move. They pulled
back insofar as they are pulling back from business methods,
not machines,
dah, dah, dah, dah, dah. Okay, we see no problem with that. Now,
they
have left much unresolved. One, transformation; how broad or narrow
is
that? We don't know. Many people's problems will be solved if it's
broad on the
one hand or narrow in the other. Two, are you automatically
patented—in
the patent statute, if you just sort of reduce this to
a machine by adding a
computer on at the end? They've flagged that as a
problem. They haven't answered
it. Could there ever be a situation where
it doesn't meet this test but still is
patentable? We are not sure.”
Mr. Stewart continues with
an exposition of how he considers the
Machine or Transformation Test
compatible with the body of
case law from the 19th century onwards. But Chief
Justice Roberts
interrupts with a very significant
question:
Mr. Stewart, I thought I understood your argument
up until the very last
footnote in your brief. And you say this is
not—simply the method
isn't patentable because it doesn't involve a
machine. But then you say
but it might be if you use a computer to identify the
parties that you are
setting a price between and if you used a microprocessor to
calculate
the price. That's like saying if you use a typewriter to type
out
the—the process then it is patentable.
I—I—it—that
takes away everything that you spent 53 pages
establishing.
This comments prompts Mr. Stewart to explaining
how a mere
veneer of computer-implementation could have rescued
Bilski's patent
application:
Well, I guess there—there were two
different places, I believe,
at which we identified ways in which this sort of
hedging scheme might
be made patent eligible. The first is we described a
hypothetical
interactive website in which people—parties and
counterparties
could essentially find each other by the computer and could agree
to
terms on that basis. And in that situation, the—the computer would
be
at the heart of the innovation. It would be—
But Chief
Justice Roberts is too astute to fall for the notion that
mere invocation of
transacting business ‘using a computer’
or ‘over the
Internet’ or ‘by means of an interactive
website’ can confer
patentability on an otherwise unpatentable
process:
“No, no.
That's just saying instead of looking at the—in the
Yellow Pages, you look
on the computer; and that makes all the difference
to you?
But
Mr. Stewart makes clear his position that an
“interactive computer
techique” amounts to more than simply
looking in the Yellow Pages. But
Chief Judge Roberts remains unimpressed:
“But if you look at your
footnote, that involves the most tangential
and insignificant use of a machine.
And yet you say that might be enough
to take something from patentability to not
patentable.”
And later, pressing the point: “So you think it's a
hard
question. If you develop a process that says look to the
historical
averages of oil consumption over a certain period and divide it by
2,
that process would not be patentable. But if you say use a calculator,
then
it—then it is?”
Justice Sotomayor moves the argument on,
making it clear that it
would not be a good thing for the Supreme Court to
declare the
Machine or Transformation Test to be an exclusive test
in
its holding in Bilski, if there were a possibility
that the Court might
be put in a position of having to
recant in some later
case:
“So help us with a test that doesn't go to the
extreme the Federal
Circuit did, which is to preclude any other items, something
we held
open explicitly in two other cases, so we would have to backtrack
and
say now we are ruling that we were wrong, and still get at something
like
this?”
But now another key question has occurred to
Justice Ginsburg. Who came
up with the Machine or Transformation Test in
the first place?
She asks: “Mr. Stewart, did you—does the government
put
forward this machine-or-transformation test? Was that your test, or was
it
the Federal circuit's on its own?”
Mr. Stewart admits that the
Government came up with the test.
Justice Ginsburg then points out the
“simplicity” of
Judge Mayer's opinion: patents should be limited to
advances in
technology. She also points out that such a restriction is
commonplace
outside the United States.
Justice Kennedy brings the
discussion back to State Street.
It seems that the Government, back in
2009, was only too happy to
stand over State Street. Clearly Mr. Stewart
considers that
the fact that the patent in that case was drawn to a
machine
(namely a programmed computer) should be more than enough to
establish
patent-eligible subject matter. Justice Kennedy presses the
point;
“Just looking at the whole case, do you think the State
Street
holding—the State Street invention was patentable?”
Mr.
Stewart states that it was.
At this point Justice Stevens seeks
clarity, and gets Mr. Stewart to
state that the ‘invention’ in
State Street would
still be considered patentable: ‘the Federal
circuit's decision
in State Street would come out the same way under our
test.’
But is this what the Supreme Court Justices want to
hear?
Justice Stevens asks:
“And you think it should? You think it
should?”
Mr. Stewart says “Yes”, prompting Justices
Stevens
Kennedy and Breyer to express their problems and disagreements
with this
position. Mr. Stewart seems to become really flustered
as it becomes clear to
him that the Supreme Court Justices
don't ‘understand’ the Federal
Circuit's dicta
in Alappat. Moreover the PTO seems only too
comfortable
with Alappat's dictum that programming a computer turns
a
computer into a patent-eligible “special purpose
machine”, and they
would clearly be happy if the
Supreme Court did not mess things up for them in
that regard.
But Justice Breyer understands perfectly the
implications
of this position:
“But then all we do is every
example that I just gave, that
I thought were examples that certainly would not
be patented, you
simply patent them. All you do is just have a set of
instructions for
saying how to set a computer to do it. Anyone can do that. Now,
it's
a machine.
“So all the business patents are all right back
in. Now,
that—what I think we were looking for was—or at least
I
was—was why that isn't so, and how you are going to later, down
the
road, deal with this situation of all you do is you get somebody
who knows
computers, and you turn every business patent into a setting
of switches on the
machine because there are no businesses that don't
use those
machines.”
Mr. Stewart finally gets some uninterrupted
minutes to summarize
his main points.
Looking at, and listening to,
this oral argument with the benefit of
hindsight, it seems only to clear that
the PTO would have been only too
happy if the Supreme Court had placed their
imprimatur on their
Machine or Transformation Test. Such a test
would weed out the
really egregious applications like Bilski or
Comiskey.
But it would have left the PTO free to continue to issue troll
patent
after troll patent on computer-implemented methods of doing business,
or
delivering advertising, or on methods of doing business ‘over
the
Internet’. It is clear from what was said that they would
have issued a
troll patent to Bilski, if only Bilski had included a few
diagrams showing some
standard computer hardware networked together,
and included a few sentences
including the words “computer”
“network” or
“website” in the specification and
the claims. (The PTO would
presumably have required no more than the
minimal veneer of
computer-implementation considered sufficient in order
to justify issuing the
patents that are currently under litigation in
CLS Bank v. Alice Corp and
Ultramercial v. Hulu.) And if
the PTO were forced to justify the
practice of issuing such troll patents,
they would have a recently-minted
Supreme Court judgment to validate
their position.
But the Supreme
Court clearly flushed out where the Government
was coming from. And they
clearly decided that they agreed
with neither party in the litigation. Moreover
the Supreme
Court agreed unanimously on a lot of things. But they could
not
agree on whether or not to declare a categorical exclusion for
business
methods. It would appear that the liberal wing were
swayed by the historical
practice over centuries of not issuing
such patents. But the conservative wing
were more concerned with
principles of statutory interpretation. And given that
the
statute included a mention of patents on methods of doing business
in one of
this provisions, they could not hold that there was
any categorical exception
for business methods implicit in the
statute. Therefore they regarded it as
sufficient to reject
Bilski's claims as being drawn to an abstract idea,
and,
in the process, establish that they still considered both
Benson and
Flook to be good law (thus refuting
Judge Rich's claim, in State
Street, that these
cases had been effectively overruled by
Chakrabarty
and Diehr.)
As I have said before, I am not a
lawyer. But, for what it
is worth, the above is what I consider was at issue in
the
Bilski oral argument. [ Reply to This | Parent | # ]
|