SpicyIP Tidbit: US Supreme Court Affirms Invalidity of Bilski Patent


In what is definitely one of the most anticipated IP decisions in recent times, the US Supreme Court yesterday affirmed the decision of the Court of the Federal Circuit invalidating the Bilski patent which was on a method for commodities hedging. Although this is not an Indian decision, it certainly is of relevance to Indian practitioners and patent applicants.

Based on a strictly cursory skimming of the decision, the Court seems to have upheld the invalidity on grounds that the patent claims did not reveal a concrete invention, but an abstract idea.  Holding that the machine-transformation test (MT Test) is not the sole or exclusive test to determine patentability of a process, the Court  added that it did not altogether do away  with the  MT test under which  for a process to be patentable:

1.   1.  it must be tied to a machine or apparatus or
2.   2. it must transform a particular article into a different state or thing

The stance taken by the US Supreme Court appears to be similar to the one taken in KSR v. Teleflex, where the TSM test was not rejected completely, but its rigid and formulaic application was questioned. A detailed analysis of the decision and the interpretation of the Indian “per se” will be undertaken shortly. 

14 comments.

  1. Avatarankush Bedi

    Correction!

    the supreme court has not upheld the machine or transformation test. Is has been affirmed as one of the test but not THE test for determining patentability under section 101.

    Bilski was invalidated because its an abstract idea. So, even if a process passes the machine or transformation test, it may be unpatentable if its an abstract idea.

    Reply
  2. AvatarShamnad Basheer

    Dear Ankush,

    You’re absolutely right that the key reason for the patent rejection by the Supreme’s was the fact that the claimed hedging method was nothing more than an “abstract idea”.

    However, this is not to suggest that the Supremes rejected the CAFC machine/transformation test. Rather, they merely held that this was not to be sole determining factor or test.

    In pertinent part, the Court held that the machine-or-transformation offers “a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under section 101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible process.”

    Reply
  3. AvatarJ. Sai Deepak

    Dear Ankush,
    Thanks for the correction, but I must say it appears you were more eager to correct than to recognize that the post was meant to merely inform readers of the development rather than undertake an analysis. The post is not even a gross stab at the finer points of the judgment. I was merely conveying that the machine or transformation test is still available for application, in addition to any other criteria that the CAFC may develop in the future.

    I would have appreciated the comment if it had come subsequent to a detailed analysis. Sometimes it helps to be patient…

    Warm Regards,
    Sai.

    Reply
  4. AvatarJ. Sai Deepak

    Actually Ankush, let’s take your argument further. If you say that even if a process passes the MT test (Machine/transformation test), it could be unpatentable if it is a mere abstract idea, the implication is that abstraction and MT test constitute two distinct limbs, with the second limb being a non-exclusive test. If so, you should have corrected me saying the Bilski patent fails on both counts and not just on grounds of failing the MT test. This is assuming that the MT test would be the correct test to be applied in this case. This is because, if the Court acknowledges the possibility of other valid tests, the Court could have also differed from the CAFC saying that the MT test is not the correct test to be applied in this case. Instead, from my limited “skimming” of the decision, it appears that the Court does not seem to contest the use of the MT test, it merely states the MT test should not be treated as the sole test for scrutinizing the validity of a patent under sections other than section 101.

    Nowhere does my post remotely allude or suggest that the MT test has been upheld as the sole test. At best, you could have corrected me for appearing to state that the Bilski patent was rejected solely on grounds of having failed the MT test.

    In any argument, it helps to let the other person have his say so that you wait for him to falter or to counter him comprehensively…

    Best Regards,
    Sai.

    Reply
  5. Avatarankush Bedi

    @ Shamnad:

    Thanks for the detailed explanation. In fact, what you have written is exactly what I wanted to convey, i.e, machine or transformation test is not the sole test for deciding patentability under 101.

    @ Sai: Even I had just skimmed through the case. and the Idea was not to highlight mistakes (seriously), but to add more information to your post for benefit of the readers, which in its current form conveyed that machine or transformation test
    will be the deciding factor.

    Reply
  6. AvatarAnonymous

    Justice Kennedy certainly recognized the place of the Machine-or-Transformation test among others (while ruling that it cannot be the sole test), but he also seems to distance himself from applying it at all in this case for the reason that it is a holdover from the Industrial Age, and so while it is still appropriate for inventions “grounded in a physical or other tangible form”, it is not calibrated to inquire into the patentability of Information Age inventions (such as software, advanced diagnostic medicine techniques, manipulation of digital signals). It may not have much relevance to inventions involving business methods, or indeed any invention not “grounded in a physical or other tangible form”.

    It seemed to me that the real object of Justice Kennedy’s opinion was to locate the invention at hand within the bounds of the Benson-Flook-Diehr trilogy, and thereby avoid having to create a new test to determine the threshold eligibility of business methods under section 101.

    The decision does raise many more questions than it answers, and I’m looking forward to reading Justices Stevens’ and Breyer’s concurring opinions (as well as SpicyIP’s analysis!)

    – Chaitanya

    Reply
  7. AvatarAnonymous

    Deepak:

    Your post states …the Court seems to have upheld the invalidity on grounds that for a process to be patentable:

    OK; so you used “seems to have” which would imply that you were not certain. Then, you go on to pontificate that:

    1. it must …
    2. it must …

    that language “it must” clearly suggests that your “strictly cursory skimming” was strictly wrong.

    So don’t be so sensitive; Ankush did you a favor; you ought to thank him and not try to be so defensive.

    Reply
  8. AvatarAnonymous

    Hi Sai,
    I agree with Ankush on that. There were several of us very concerned about whether the machine or transformation test would hold, particularly for other arts such as diagnostic assays and frankly, we breathed a sigh of relief that M or T test would not be the sole decider in these cases. While I appreciate yours was a quick summary of the decision, it could be easily misinterpreted, in the way you phrased it.

    Reply
  9. AvatarRajiv

    The result in Bilski leaves more questions answered than it provides an answer to. While examining patent applications, the patent office expects a very clear answer-a yes or a no. The ruling in Bilski simply states that other tests may need to be applied (102-novelty, 103-obviousness, 112-description) other than the 101 test. The Supremes have left open the possibility that the Federal Circuit can introduce additional tests if necessary.

    My guess is that the USPTO would simply continue to use the current practice in deciding upon applications. See http://bit.ly/9ENwPF

    Additionally, there was a recent decision from the German Federal Court where client-server software was held to be patentable. See http://bit.ly/adtS0B

    These two cases may very well have an impact upon the future of at least some applications at our IPO.

    Reply
  10. AvatarAnonymous

    Anon 5:58:
    you are reading so much into a tidbit??? then it’s pointless to ask you to be sensible.

    Sai:
    for the benefit of these readers, would you mind rewording the post? or else the core issues will get sidelined

    Lavanya

    Reply
  11. AvatarRajiv

    The result in Bilski leaves more questions unanswered than it provides an answer to. While examining patent applications, the patent office expects a very clear answer-a yes or a no. The ruling in Bilski simply states that other tests may need to be applied (102-novelty, 103-obviousness, 112-description) other than the 101 test. The Supremes have left open the possibility that the Federal Circuit can introduce additional tests if necessary.

    My guess is that the USPTO would simply continue to use the current practice in deciding upon applications. See http://bit.ly/9ENwPF

    Additionally, there was a recent decision from the German Federal Court where client-server software was held to be patentable. See http://bit.ly/adtS0B

    These two cases may very well have an impact upon the future of at least some applications at our IPO.

    Reply
  12. AvatarJ. Sai Deepak

    Hi Ankush,
    If more than one person feels the post conveys a different message, i guess you are right. I have modified the post to better reflect the right position.

    Bests,
    Sai.

    Reply
  13. AvatarJ. Sai Deepak

    Hi Chaitanya,
    I agree with you, but i think Justice Kennedy’s observation on Industrial Age and Information had more to do with the need for a different test for the future, than for the purposes of this case. According to him, he did not need a new test because benson and flook gave him the tools needed for this case. Also,although he discusses and endorses Diehr, he doesnt apply it to Bilski.

    I personally found Justice Steven’s opinion much more incisive and insightful.

    @Rajiv: In a way, i think it’s better that the Court did not propose tests which were not necessary for adjudicating Bilski because that could have affected several applications which are under prosecution. By clarifying that the MT test is not the sole test, the Court may have made the lives of quite a few applicants easier. Of course, the grievance could be that as the Apex Court, the guidance expected of it by USPTO in terms of a new test was not forthcoming.

    Bests,
    Sai.

    Reply

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