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Bilski Oral Argument at the Supreme Court

By Peter Zura

"If you're not confused, you're not paying attention."   -- Tom Peters

Well, the analysis has started to roll in, and one thing is certain about the Bilski case: almost no one believes that the claims on appeal will be held patentable.  Not one Justice defended Bilski's method claim directed to hedging risks in commodities trading.  What appeared to bother the court the most was the concept of business methods based entirely on human activity, or, as Bilski's attorney Michael Jakes put it, "methods of organizing human behavior."

The Court didn't care much for these types of patents, and they made this clear - over and over - by citing examples of  trivial patents throughout the arguments, almost as a taunt to Bilski's counsel in the hopes that he would eventually stop mid-argument and acknowledge "you know what, your honor - that's a pretty stupid invention right there; someone would need to have their head examined before filing a patent application on that."  Some theoretical patents proposed by the Justices:

- How to resist a corporate takeover (Ginsburg)
- How to choose a jury (Ginsburg)
- Patent the method of speed dating (Sotomayor)
- A "great, wonderful, really original method of teaching antitrust law [that keeps] 80 percent of the students awake" (Breyer)
- "I buy low and sell high.  That's my patent for maximizing wealth" (Roberts)
-  Questioning whether a person at the Bureau of Statistics can compile statistics on life expectancy and get a patent (Kennedy)
-  "Let's take training horses. Don't you think that -- that some people, horse whisperers or others, had some, you know, some insights into the best way to train horses? And that should have been patentable on your theory." (Scalia)

And so on.  Entertaining?  Yes.  Helpful?  Not really.  The Justices were quite frank in telling the counsel that they were having trouble formulating any kind of concrete test for patentable subject matter:

JUSTICE BREYER: [I]n the nineteenth century, they made it one way with respect to machines. Now you're telling us: Make it today in respect to information. And if you ask me as a person how to make that balance in respect to information, if I am honest, I have to tell you: I don't know. And I don't know whether across the board or in this area or that area patent protection will do no harm or more harm than good.

So that's the true situation in which I find myself in respect to your argument. And it's in respect to that, I would say: All right, so what do I do?

* * *

JUSTICE SOTOMAYOR: And so it begs the question, because we go around in a circle: What does "process" mean in a patent law that was passed in 1952 that had one set of manufacturing and other items that are technologically tied and this is not? So how do we discern Congress's intent, other than by the use of the word "process" in context?

* * *

JUSTICE BREYER: Now, [the Federal Circuit has] left much unresolved. One, transformation; how broad or narrow is that? We don't know. Many people's problems will be solved if it's broad on the one hand or narrow in the other.

Two, are you automatically patented -- in the patent statute, if you just sort of reduce this to a machine by adding a computer on at the end? They've flagged that as a problem. They haven't answered it. Could there ever be a situation where it doesn't meet this test but still is patentable? We are not sure.

At this point, the Justices appeared to tacitly accept the Federal Circuit's "machine-or-transformation" (MOT) test by default - i.e., unless they hear of something better, the MOT test will have to do for now.

JUSTICE SOTOMAYOR: Well, isn't the manipulation of electronic signals a substance that is different in kind from just a method of how to go about doing business or a method of how to approach a particular problem?

Isn't there -- isn't that what the Federal Circuit was trying to explain, which is that there has to be something more substantive than the mere exchange of information; that it has to involve -- it used the word "transformation." It hasn't defined the outer limits of what it means by that.

* * *

MR. STEWART (USPTO): Well, first of all the only ruling that we're -- backtrack a bit, to say, we oppose,sir, in this case because we recognize that there are difficult problems out there in terms of patentability of software innovations and medical diagnostics.

JUSTICE KENNEDY: You thought we -- you thought we would mess it up.

MR. STEWART: I didn't think --

(Laughter.)

MR. STEWART: We didn't think the Court would mess it up. We thought that this case would provide an unsuitable vehicle for resolving the hard questions because the case doesn't involve computer software or medical diagnostic techniques, and therefore, we thought the Court would arrive at the position that I think, at least some members are feeling that you have arrived at, that you will decide this case, and most of the hard questions remain unresolved. And, frankly, we think that's true.

JUSTICE GINSBURG: But this case could be decided without making any bold steps.

MR. STEWART: Again, I don't -- I don't think it would be a bold step to say that machine-or-transformation is the test. That is, we have gone for --

JUSTICE GINSBURG: But even the Federal circuit didn't say it was a retest. It said it is for now. We know that things that we haven't yet contemplated may be around the corner, and when they happen, we will deal with them.

For people that still cling to the fantasy that software patents will be banned, you will have to wait for another day.  The court appeared to recognize that this case was not about computers and computer software (in the words of Justice Sotomayor: "no ruling in this case is going to change State Street"), and the majority of the discussion was directed to human-activity business methods.  As such, it is highly unlikely that the Court will rule in any meaningful way against software patents.

One interesting discussion worth noting is the following exchange between Scalia and Jakes, where Scalia appears to contradict the Federal Circuit's holding in In re Nuijten (signal claims are not patentable subject matter):

JUSTICE SCALIA: Sound -- sound is not physical, and electric current is not physical?

MR. JAKES: I think electric current is physical.

JUSTICE SCALIA: Yes, I think so.

MR. JAKES: Yes.

JUSTICE SCALIA: Sound is, too.

MR. JAKES: It can be, but when it's transmitted over a wire, it's not. It's something else. It's an electrical current then.

JUSTICE SCALIA: Sound is not transmitted over the wires. Sound has been transformed into current, and current is transmitted over the wire and then transformed back at the other end into sound.

MR. JAKES: Yes, and I would agree --

JUSTICE SCALIA: I think it clearly --clearly would have been covered by -- by the test

Read/download a transcript of the oral arguments here (link)

Full post as published by Two-Seventy-One Patent Blog on November 10, 2009 (boomark / email).