On June 28, 2010, the U.S. Supreme Court issued its much anticipated decision in the Bilski case, which was supposed to determine whether or not business methods (and software and other high-tech methods) are patentable. The decision was a 5/4 split holding that some business methods are patentable, but not Mr. Bilski's.
Immediately following the Bilski decision, many legal and business analysts declared that the Court did not provide clear direction. We disagree. Based on our experience with patent examiners over the past few months, combined with a closer look at the decision itself and the official reaction from the Patent Office, we have found clearly navigatable direction for developing practical tips on obtaining patents for software and business methods. Please click here to read our legal analysis and claim drafting best practices, which are also outlined below. Please contact Intellectual Property Partner David Heckadon with any questions or needs for legal assistance.
Clear Direction from the Court
Clear Direction from the Patent Office
Successful, Practical Claim Drafting Tips
There is Clear Direction from the Court:
- The Court indicated that some software and business methods are, indeed, patentable. The machine or transformation test is still valid and the only certain test for now, but it is not the only test. The previous "useful, concrete and tangible result" test is not dead yet, and may receive approval in the future by the Federal Circuit.
- There are certain technologies the Court seems to favor ("software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals") and certain technologies the Court seems to disfavor (claims for abstract ideas such as "hedging bets" or "economic theories" and claims lacking a physical structure such as machines or a way in which a machine could be programmed to perform the method steps).
- Abstract ideas are not patentable and they never were before Bilksi, so this is not new. However, the Court (and the Patent Office) spend much effort explaining what now constitutes an abstract idea. For example, "math" cannot be patented, but a process might be patentable in which only some of the steps are "math" and the invention is "related to an industrial process".
There is Clear Direction from the Patent Office:
- The Patent Office Guidance Memo saves the day for most software and high-tech patents. The most important part of the Patent Office Memo to Examiners is the statement that: "If the claimed method does not meet the machine or transformation test, the claim should be rejected unless there is a clear indication that the method is not directed to an abstract idea."
- It appears that this statement provides an examiner with the ability to look at a complex software or medical diagnostic claims and realize that the method involves much more than a simple abstract idea. In my experience, ideas tend to be viewed as being "abstract" when they are either: (a) too simple, or (b) too vague. A properly written software or medical diagnostic method claim should be neither of these.
We Have Had Success with These Practical Claim Drafting Tips:
(to meet the machine or transformation test and make it clear the claim is not directed to an abstract idea)
- Draft method claims that are tied to real physical objects.
- Draft claims that clearly show how physical objects are transformed from one state to another. (If your claims involve steps of manipulating data, be sure to clearly claim how that data manipulation transforms one physical object or thing into another.)
- Do not just recite "computer" or "processor" in the claim. Instead, show how the computer actually accomplishes the invention. Explain what the computer or processor actually does.
- Never write claims to abstract ideas that are vague or indefinite, such as "managing risks," "structuring legal relationships," "setting up organizational relationships," etc.
- If a claimed process can be performed in a human mind (because it is not tied to a machine or transformation of an article into a different state or thing), then it is not patentable.
- Claim an apparatus as well. Remember, Bilski only deals with method claims.
- Business methods should be claimed in a way that focuses on the improvements made in the business field, e.g. in terms of computer systems, organizational structures.