I posted a short blurb on the Amazon decision recently. One of my colleagues (thanks again Peter!) mentioned that a notice of appeal was filed yesterday.
law, technology, finance and other ruminations
business method
amazon one-click patent – federal court decision
If I were to pick a subtitle for this post, it would probably be “Bilski, Canadian style”.
One of my colleagues (Thanks Peter!) was kind enough to mention that the judgement of the Federal Court of Canada (PDF) was released earlier today, so I set aside a few minutes to go through it. Admittedly, I haven’t been following the case all that closely.
In any event, rather than slogging through all 35 pages yourself, the following is a rather abbreviated summary of the decision:
- After quite a bit of back and forth on the application process, the Commissioner of Patents ultimately rejected Amazon’s patent application in 2009
- The Commissioner rejected Amazon’s patent on the basis that it was “non-patentable subject matter”, primarily for any one of three reasons:
- the claimed invention was not physical in nature nor did it result in some change or effect on physical objects;
- the claims were claims on business methods, which the Commissioner concluded were not patentable; and
- the claims were not “technological” in nature (meaning that they could be used to address a technical problem) and therefore not patentable.
- The Federal Court disagreed with each of the Commissioner’s reasons:
- the Court was of the opinion that the physicality test was too restrictive – instead, the proper test was whether or not the claims had “practical application” – i.e. something that results in a “change in character or condition” and found that Amazon’s claims could meet that standard through Amazon’s customers “manipulating their computer and creating an order”;
- the Court did not agree that business methods were non-patentable under Canadian law; and
- the Court did not agree that there was a “technology” test for patentability under Canadian law.
On the first point relating to physicality, the Court’s comments seem to echo, to some degree, the Bilski decision by the US Supreme Court and its rejection of the “machine or transformation” test.
Although the Federal Court did not agree with the Commissioner’s rejection of the patent, it also did not affirm its validity nor did it grant the patent. Instead, it sent back the patent for re-examination.
Of course, there is quite a bit more in the decision itself, including riveting details on novelty, analyses of the process used to assess patentability, elements of that process versus application of same to the patent itself, etc. etc. So consider the bullet points above a gross oversimplification and use accordingly.
us supreme court releases bilski decision on patents
The US Supreme Court yesterday released its decision on the Bilski v. Kappos case.
The bottom line:
Business methods can still be patented in the U.S.
The summary:
Bilski attempted to patent a method of hedging energy commodities, primarily in the form of a mathematical formula. The US Patent Office rejected the application. The rejection was upheld by the Board of Patent Appeals and the Court of Appeal for the Federal Circuit.
Most notably, the Court of Appeal rejected the previous test which had enabled the claiming of business method patents (the State Street Bank & Trust case), instead holding that “a claimed process is patent eligible [only] if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing”.
Needless to say, this new test would have put a bit of a damper on business method patents.
The Supreme Court did not agree with the Court of Appeal. It held that the “machine or transformation” test is not the only test for patent eligibility for a process and that business method patents are in fact permissible under the Patent Act.
That being said, they nonetheless agreed with the Court of Appeal that Bilski’s patent should be rejected, not because it failed to meet the “machine or transformation” test, but rather because it was an attempt to patent an abstract idea rather than a business method. The Supreme Court affirmed that abstract ideas are not patentable.
Comments:
Many like the EFF seem to be disappointed, but from a jurisprudential perspective the judgement makes sense to me. The Supreme Court’s rationale was that courts “should not read into the patent laws limitations and conditions which the legislature has not expressed” and there was no reasonable basis on which the term “process” had to be specifically tied to a machine or the transformation of an article.
In other words, it’s not the job of the courts to make up new stuff when it comes to the law – their job is only to interpret the law correctly. And if there’s any issue with the Patent Act, then it should be dealt with through legislative change rather than a judicial decision.
Perhaps not quite the interventionist approach that some might have been hoping for.
So, as the EFF notes, all of you out there that have a glimmer of inspiration on how to make your fortune from, for example, a system for reserving toilets, (or suing others who come up with the same thing but didn’t apply for a patent) can still pursue that dream.
bilski going up to the supremes
As most readers probably know, Bilski was a rather important case on patent law in the US. There have been many, many, many analyses and commentaries on the impact of the decision of the federal circuit court which would significantly limit the patentability of business methods. In short – patents would only be available if embodied within a machine or transformed one tangible thing into another.
According to SCOTUSblog, the decision is being appealed:
“This case,” the petition’s opening line says, “raises the most fundamental question in patent law: what can be patented? Are patents only for manufacturing processes that are tied to a particular machine or produce some physical transformation? Or do patents also embrace modern business procsses that do not depend on a particular machine or device?”
First time since 1981 since the Supreme Court has considered this, according to SCOTUSblog. Patent agents everywhere await with bated breath.
