Business Methods Patents to Receive Scrutiny

June 16th, 2009

Posted by: admin

The Supreme Court has agreed to hear a case regarding the validity of business method patents (H/T Wall Street Journal).  Business method patents cover ways of doing business, and became a larger share of patents as electronic commerce and other computerized activities became widespread.  An example of such a patent is Amazon’s 1-Click method for expediting online orders.

As the petition for a writ of certiorari reads, the issue in this case is:

Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”

In other words, should process patents be drawn more narrowly to apply only to those processes that are tied to a machine or make a transformation of some physical item.  The underlying case at the Federal Circuit answered yes to this question, contrary to recent practice and precedent.  If that perspective is upheld, some claim the removal of patent protection for these processes would chill innovation.  Others would counter that the costs of litigation that arise from inadvertent infringement are an impediment as well.

If the Court rules against a broadly interpreted patent, it is possible that patents in other areas that some consider too broad (genes, plant varieties, etc.), will be revisited as well.

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