Guest Post: Bilski and Software Patents

In the last few posts, SpicyIP has discussed the Bilski decision of the US Supreme Court. In this post, we bring forth a crisp analysis by Adithya Banavar (a brilliant and socially-conscious final year student of NLSIU, Bangalore) on the effect of the decision on software patents.

Adithya too agrees that Bilski for the most part does not affect patent eligibility of softwares and does not bar grant of patents to business methods.

In 1998, the Court of Appeals for the Federal Circuit (CAFC) opened the floodgates on the patentability of software where it laid down the ‘useful, concrete and tangible result test’ (State Street). Prior to State Street, in 1994, the CAFC had held that a general-purpose computer was structurally altered when a computer program was used in it (Alappat).

This proceeded from the then prevailing logic laid down by the Supreme Court in Chakrabarty that ‘anything under the Sun made by man’ was intended by Congress to be patentable. In the 15 years between Alappat and Bilski, the Supreme Court had declined to interfere, during which period business methods as well as software were considered patentable almost without a doubt.

Prior to Bilski, the CAFC and earlier the CCPA were both pro-patenting and always sought to distinguish or otherwise circumvent the Supreme Court cases in order to grant patents. Diehr and Chakrabarty showed a marked change in the stance of the Supreme Court where they granted the patent as opposed to Benson and Flook.

This was followed by increasingly wider interpretations of the word ‘process’ adopted by the CAFC. State Street was perhaps the widest possible definition that could be taken by the CAFC in light of the trilogy of cases.

The Federal Circuit decision in Bilski, on the other hand is the other extreme. This is possibly because the CAFC felt that the test was too broad and acknowledged this in its judgement. This was reproduced in the Supreme Court (Justice Breyer’s) opinion in Bilski where it is stated that the “’method of training janitors to dust and vacuum using video displays,” a “system for toilet reservations,” and a “method of using colour-coded bracelets to designate dating status in order to limit ‘the embarrassment of rejection’” would all be patentable under the ‘useful concrete and tangible’ test.

It seems clear however that the Supreme Court decision in Bilski does not change the position related to software patents due to two main reasons. First, the facts of the case are strictly limited to a business method that was quite clearly abstract and fell under the broad tests laid down by the earlier trilogy of cases of the Supreme Court.

This meant that the interpretation of ‘process’ was not greatly furthered by the Court in this case. The Federal Circuit had left the question as to whether a general-purpose computer would fulfil the first test (that of being tied to a machine) to future cases.

Second, although the majority judgement overrules the State Street test (Only Justice Stevens seems to believe that State Street is distinguishable on fact), it seems that they more emphatically believe that the MT test is not the exclusive test. It held that this test was a sufficient test, but was by no means a necessary test.

The majority opinion of the Supreme Court in Bilski did not expressly disallow software patents or even business method patents. They have left it to the lower Courts to determine the exact limits on patentability, but it is clear that software will still remain patentable.

In conclusion, it seems that the interpretation of Bilski by the CAFC will actually walk the middle path as was intended by the trilogy of Benson, Flook and Diehr. However, this would affect business method patents that are too broad and would not affect software patents.