The Bilski Tea Leaves:
Which Way Will They Go?
Ahmed J. Davis
Fish & Richardson, P.C.
www.fr.com
TJSTEL Symposium
March 19, 2010
What Is All the Fuss?
 If commercially viable
technology (computer-based,
machine-based and
transforming methods) is
patentable – who cares about
the Bilski results?
Software, Internet and Computer Industries
Standard – Process claims directed to software must satisfy
the machine-or-transformation test and the guidelines
Claims directed to software directed to the operating system
are likely tied sufficiently to a “machine”
Claims directed to rendering data in a visual depiction of a
physical object should be sufficiently tied to “transforming”
• Gray areas:
- Claim involving a general-purpose computer or
- Claims tied to a computer only for data-gathering steps,
mathematical calculations or the display of results
Biotech and Pharma Industries
Same standard – Process claims directed to a research method,
medical procedure or diagnostic testing must satisfy the
machine-or-transformation test
Claims directed to observing blood levels of amino acid and
deciding whether there is a vitamin deficiency – (maybe) valid
process – Metabolite (2006)
Claims directed to method for selecting appropriate
immunization schedules – invalid process – Classen v. Biogen
(Fed. Cir. 2008)
Claims directed to methods of inhibiting gene expression –
invalid under § 112 – Ariad v. Lilly (Fed. Cir. 2009)
Claims directed to optimizing pharmaceutical therapeutic
efficacy – valid process – Prometheus v. Mayo (Fed. Cir. 2009)
IP Associations, Professors, etc.
“Machine or transformation” test is too
limiting – what about the next “flux
capacitor”?
No reason to limit advancements to
“machines” or physical
“transformations”
“Usefulness” is the touchstone “To promote the progress of science
and useful arts, by securing for limited
times to authors and inventors the
exclusive right to their respective
writings and discoveries.”
- U. S. Const. Art. 1, § 8, clause 8.
Bilski Risks Disrupting Settled Expectations
 In her dissent, Judge Newman (Fed. Cir.) observed:
“The court today acts en banc to impose a new and farreaching restriction on the kinds of inventions that are
eligible to participate in the patent system. . . . Its impact
on the future, as well as on the thousands of patents
already granted, is unknown. . . . Uncertainty is the
enemy of innovation. These new uncertainties not only
diminish the incentives available to new enterprise, but
disrupt the settled expectations of those who relied on the
law as it existed.’”
Bilski, 545 F.3d at 976 (Newman, J. dissenting)
Supreme Court Oral Argument:
What Happened To Stable Rules?
 JUSTICE SOTOMAYOR: How about if we say something as
simple as patent law doesn’t cover business matters…
 JUSTICE SCALIA: Also you could say business methods apart
from machines are not patentable. How about that?
 JUSTICE GINSBURG: Isn’t that the basis on which the patent
law rests in Europe, in other countries? They do not permit
business method patents. It has to be tied to technology, to
science or technology. So if other systems are able to work
with the notion of technology-based, why not ours?
 No Supreme Court Justice echoed Judge Newman’s concern for
the settled expectations of IP owners
Supreme Court Oral Argument:
What Happened To Stable Rules?
 JUSTICE SOTOMAYOR: Do you think that there is some benefit to society
from patenting a method to cure someone that involves just human activity,
as opposed to some machine, substance or other apparatus to help that
process?
 JUSTICE GINSBURG: If you read Judge Mayer’s opinion, it has a
simplicity to it. It says, if it’s technology, then its within the realm of patent,
and if its not technology, it isn’t. If it’s based on science or technology, and
that seems to be what is used in other places?
 JUSTICE SOTOMAYOR: So help us with a test that doesn’t go to the
extreme that the Federal Circuit did, which is to preclude any other items,
something we held open explicitly in two other cases, so we would have to
backtrack and say now we are ruling that we were wrong, and still get at
something like this?
 Supreme Court Justice echoed Judge Newman’s concern for the settled
expectations of IP owners
Horse whisperers – really?
JUSTICE SCALIA: You know, you mention that there are all …
these new areas that didn't exist in the past because of
modern business and what-not, but there are also areas
that existed in the past that don't exist today. Let's take
training horses. Don't you think that -- that some people,
horse whisperers or others, had … some insights into the
best way to train horses? And that should have been
patentable on your theory.
MR. JAKES: They might have, yes.
JUSTICE SCALIA: Well, why didn't anybody patent those
things?
MR. JAKES: I think our economy was based on industrial
process.
JUSTICE SCALIA: It was based on horses, for Pete's sake.
You -- I would really have thought somebody would have
patented that.
Are You On the Wrong Side of First Street?
 JUSTICE BREYER: Well, if you leave something out,
Congress can put it back in, tailoring the protection to what
they feel is necessary…
IP Owners Are Entitled To Rely
On Congressional Silence
 Congress has never acted to limit earlier “everything under the
sun made by man” jurisprudence despite the Supreme Court’s
invitation to do so in Chakrabarty and Flook:
“The choice we are urged to make is a matter of high policy for resolution within
the legislative process after the kind of investigation, examination, and study that
legislative bodies can provide and courts cannot.” Chakrabarty, 447 U.S. at 317
“Difficult questions of policy concerning the kinds of programs that may be
appropriate for patent protection and the form and duration of such protection can
be answered by Congress on the basis of current empirical data not equally
available to this tribunal.” Parker v. Flook, 437 US 584, 595 (1978).
IP Owners Are Entitled to Rely On
Congressional Endorsement Of Business Methods
 What the Federal Circuit said in 1998:
“We take this opportunity to lay [the] ill-conceived [business method]
exception to rest.” State Street Bank & Trust Co. v. Signature Financial
Group, Inc., 149 F.3d 1368, 1373 (Fed. Cir. 1998)
 In response, Congress specifically contemplated that there existed a class of
“business method” patents and chose not to outlaw them but instead to provide
additional defenses to infringement for such patents.
 In 1999, Congress specifically added Section 273 – a personal “prior user”
defense to infringement – (when the use is not also invalidating prior art)
 This defense applies ONLY to method claims where the term “method” means
“a method of doing or conducting business”
 Petitioner raised this point in oral argument, but it received no traction with the
Justices
End of Presentation