Bilski patent decision coming soon - here's how the oral arguments went

I second the request for a grellas exegesis.

It is true that one often can't tell which direction the justices will go just from reading oral argument.

Nonetheless, it is a worthwhile exercise if one has the time (and, hey, it is Saturday morning) - not just for lawyers but for any intelligent reader - to read through an argument such as this from time. The colloquies actually can be pretty interesting and one sees how engaged and insightful the justices can be. It also helps pinpoint the primary issues that are of concern to them in deciding a case. Well worth the effort here for anyone interested in the question of "what are the limits of patentable subject matter?"

I don't think I have any better take on the case than anybody else might but I have a few thoughts on what might result given the context of the case.

Much has been said about how Bilski will lead to the abolition of software patents. I believe this sort of outcome is highly doubtful, though EFF and others who filed friend-of-the-court briefs have pushed for it and have made at least a plausible case for why it might be a valid way to resolve the issues.

The reason I am skeptical of such an outcome is that what the Court is doing here involves a question of statutory interpretation and thus the Court's role is inherently limited under normal separation-of-powers rules that limit the Court to trying to figure out what Congress intended when it set the rules for this area. Meaning - the Court is not able to write on a clean slate and, therefore, even if it wanted to come up with an idealized method for defining the legitimate scope of patentable subject matter, it could not do so.

Why? Well, the Patent (and Copyright) Clause of the Constitution (Article I, sec. 8, cl. 8) provides that the Congress shall have the power "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." Thus, right in the Constitution (from which all federal power derives) the rule is set out: it is Congress that gets to define the rules for giving inventors "the exclusive Right to their . . . Discoveries."

In the first U.S. Patent Act (Act of April 10, 1790, 1 Stat. 109, 110), Congress implemented its constitutional authority to sanction patent monopolies by defining patentable subject matter very broadly, to include "any useful art, manufacture, engine, machine, or device, or any improvement therein." Congress amended the Act in 1793 and then again in 1952, so that today it reads as to the idea of "patentable subject matter" as follows (35 U.S.C. sec. 101): "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." (my emphasis)

What is at issue in Bilski is the question of what Congress meant by the word "process" when it enacted the 1952 amendment defining patentable subject matter as quoted above.

Before the 1952 amendment, the court decisions did support the idea of processes being patentable but had limited this idea quite severely. For example, in Roberts v. Ryer, 91 U.S. 150, 157 (1875), the Supreme Court held that "it is no new invention to use an old machine for a new purpose." Thus, new uses for existing machines or processes were not patentable. The 1952 amendment abrogated this limitation and really opened the way for a broad grant of process patents of all types.

Even then, it was not until the Court of Appeals for the Federal Circuit was set up specifically to handle patent appeals and rendered its State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), decision that process patents exploded. In State Street, the court held that a process can be patented if it leads to a "useful, concrete and tangible result." In other words, as long as something useful can be said to have come of a new process, it was eligible for being patented. This very broad rule is widely credited with having caused the explosion in software and business method patents that we have experienced of late.

It was precisely this State Street "useful result" test that the Federal Circuit Court significantly reworked in Bilski and the court specifically stated that State Street was no longer to be relied on. Since this was the very court that had decided State Street, what you had in the Bilski case as decided at the intermediate appeal level is a highly important scaling back of the basis upon which process patents might be issued. That court announced a new test for process patents that would supplant the old - to wit, that all patentable methods must either (1) be tied to a particular machine or apparatus, or (2) transform a particular article into a different state or thing. In effect, the Federal Circuit Court rejected a previous subject matter test that looked only to the result of a method to determine whether the method was patentable (with the mere presence of economically useful activity being sufficient to justify patentability of subject matter) and required courts also to look to the means used to accomplish the method (is it tied to a machine, is it transformative).

The Federal Circuit Court derived its "machine-or-transformation" test by interpreting and applying Supreme Court decisions that went back decades and which in their turn had simply sought to determine what Congress intended when it used the word "process" in the 1952 amendment. Of course, the ultimate authority for determining that issue is the Supreme Court itself, and the Court decided to take this issue up when it granted certiorari to hear this appeal.

The issues as framed by the parties (and which color the entire oral argument), then, are: (1) Bilski's lawyer is arguing, on the one side, that "anything under the sun" should qualify as patentable subject matter, with the only constraints being found not in the question of what subject matter might be patentable but rather on related questions of whether the putative invention is non-obvious, is useful, etc.; (2) on the other side, you have the respondent trying to defend the Federal Circuit Court's "machine-or-transformation" test.

As I tracked the oral argument, I heard several of the justices saying to Bilski's attorney, in effect, "If I don't want to go with your extreme approach that everything under the sun is potentially patentable as a 'process' within the meaning of the 1952 amendment, and if I don't want uphold the machine-or-transformation test because it is too arbitrary, then help me articulate something that works as a sound interpretation of what Congress meant by the word 'process.'" In response, the justices got no help on this.

I have gone on and on here, but I think the above illustrates why this case really could go over the board but will not likely lead to any radical outcome. The justices seemed to be looking for a way to strike a balance and did not seem open to a radical solution (such as the abolition of all process patents). Process patents are specifically authorized by Congress, which has the final constitutional say on the issue, and therefore it really is not within the Court's province to undo what Congress has authorized. Beyond that, it is anybody's guess.

I easily may be wrong on the question whether the Court will use this occasion to attempt to bring sanity to this area by severely limiting or even eliminating things such as software patents - they have been given the ammunition to do this and could do this if so inclined (this would be a pretty extreme result).

On a final note, the Court could also dodge the issue by saying that Bilski's patent claims stink and ought to be rejected on traditional ground, could reject the machine-or-transformation test along the way, and could leave the issue open concerning what the ultimate test should be.

Welcome to the world of law!