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US to reconsider business method patents
26 February 2008

In 1998, the US Court of Appeals for the Federal Circuit (CAFC) re-interpreted US patent law to allow the grant of patents for methods of doing business. This sparked controversy around the world, as various jurisdictions quickly acted to re-define their own positions. As a result, the granting of patents for business methods is allowable to different extents in different jurisdictions.

 

The CAFC has now indicated that it will look again at the question of business method patents. The issue at stake is whether such patents fulfill the requirements of s 101 of the US Patents Act (35 U.S.C.), the section which defines patentable subject matter.

In re Bilski will be the subject of an en banc rehearing. The patent concerns a method of managing risk during commodity trading. As such, it is a 'pure business method'. The Patent Office Board of Appeals has specifically asked the CAFC to provide its opinion. The court has agreed to consider five questions:

  1. Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under 35 U.S.C.s 101?
  2. What standard should govern in determining whether a process is patent-eligible subject matter under section 101?
  3. Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that contains both mental and physical steps create patent-eligible subject matter?
  4. Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101? 
  5. Whether it is appropriate to reconsider State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?

 

Of particular interest is the prospect that the CAFC may reconsider if it 'got things right' ten years ago, in the State Street Bank case. No matter what the outcome, the ruling in the present case is sure to provoke similar controversy to that one.

Barry Newman