Is Your Patent Safe?

Supreme Court asked to hear a case that would determine whether business methods in any industry are patentable.

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The Supreme Court is being asked to hear an appeal that will determine whether business methods are patentable, which will have serious ramifications for the software, financial services, and biotech industries.

Finnegan LLP, an intellectual property firm based in Washington, DC, has filed a petition for the court to hear In re Bernard L. Bilski and Rand A. Warsaw, which concerns whether a method for hedging risk in commodities trading is eligible for patent protection.

The final decision in Bilksi will determine whether business methods in any industry are patentable.

Michael Jakes, a partner at Finnegan who heads their appellate practice, expects the court to take the case because it has been 30 years since it last ruled on the issue. He argues that the Unites State's transition to a service-based economy and developments like the software boom require expanded patent protections.

"One of the great strengths of our system is it doesn't exclude new things," he said.

Business methods were not considered patentable until 1998, when the State Street Bank won protection for a process involving mutual funds. The decision resulted in a flood of software-related patents. But on October 30, 2008, the Federal Circuit appeals court ruled 9-3 against Bilski, essentially eliminating process-related patents.

The case has major implications for financial services, software, and biotech companies, who may see patents invalidated. According to the standard set by the October decision, abstract ideas can't be patented, and a process only qualifies if it is tied to a machine or if it transforms something.

If the Supreme Court does not take the case, October's stricter standard will stand.

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