High-tech groups and experts are closely following a key case before the U.S. Court of Appeals for the Federal Circuit that addresses a type of patent aimed at disclosing and claiming new methods of doing business. Court watchers say the case before the 12-judge panel could reach the Supreme Court and should be monitored closely by policymakers. An attorney representing advocates of a technology-neutral U.S. patent system argued before the court Thursday that limiting types of patentable innovations would defy historic practice and congressional intent. Judicial scrutiny around the paradigm for "business method" patents comes on the heels of a high-profile push on Capitol Hill to make sweeping changes to the nation's patent regime. That bill, however, has languished and is unlikely to pass this year.
Regulatory Datacorp counsel John Duffy, one of many who filed friend-of-the-court briefs in a case involving the Patent and Trademark Office's recent rejection of an obscure patent application, argued the Supreme Court has long recognized that ideas and abstract processes as such are not patentable. A PTO proposal to limit patent protection to processes performed by a machine or those that cause a physical transformation are "fundamentally misguided," he said.
The case has significance far beyond whether the inventor in question ought to be granted a patent, Accenture Intellectual Property Director Wayne Sobon said Friday. The judges acknowledged that impact by focusing on the possible effects of "any kind of a bright-line rule on our new economy," which is largely information-driven. The limits proposed by the PTO could invalidate a number of software patents, Sobon warned.
While it is difficult to tell what direction the court will lean, Chief Judge Paul Michel has repeatedly criticized State Street Bank & Trust v. Signature Financial Group, a decade-old case that established a test that helped pave the way for business method patents. And Judge Pauline Newman stressed that key Supreme Court decisions represent an "evolving view" of patentability and judges are just "keeping up with the times."
High-tech stakeholders expressed an array of views in a flood of amicus briefs last month. The Computer and Communications Industry Association, a group that represents Google, Microsoft, Yahoo and others, argued State Street should be overturned, while the American Intellectual Property Law Association argued it must be upheld. The Business Software Alliance urged the court to reject any artificial limitations on patentable processes that would hinder the development of new technologies.
This article appears in the May 10, 2008, edition of National Journal Daily PM Update.