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Supreme Court Reexamines Patent Laws

A reversal of the earlier decision that business methods are not patentable could likely change the face of business.
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The Supreme Court agreed to hear a patent case that seeks to challenge the current U.S. patent law. Last week, the court began reviewing an appeal of the landmark case Bilski v. Doll, which states that patents must be tied to a machine or transformation, and that "business methods" are not considered patentable. Bilski v. Doll was heard in the United States Court of Appeals for the Federal Circuit in October 2008. This is the first time since 1981 that the Supreme Court will revisit this issue.

Michael Jakes, a patent lawyer and partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, a Washington D.C.-based firm that focuses on intellectual property, is representing the petitioner, Rand A. Warsaw, the CEO of WeatherWise, a company that uses a computer modeling process to develop products they sell to energy providers and consumers. Because no machine, device or chemical process is used in the WeatherWise system, under the current law, a patent for their business method cannot be issued.

Jakes says that this case drives at the fundamental question of what is patentable. Under the current law, a patent application on a method for managing risk in commodities trading, as another example, was denied because it was not tied to a machine and did not result in a physical transformation. This lack of protection has created unrest among inventors, investors and companies looking to patent new business models and cutting-edge processes.

"I'm a strong believer that small businesses benefit from the patent system, it gives them exclusive rights to practice their processes and recover investments and capital that they put into their company," explains Jakes.

Although the patent law was originally framed in a broad, neutral and open fashion, the examination of what is eligible to be patented has not been examined since 1981, according to Jakes.

Amicus briefs have been filed by Accenture and Pitney Bowes. "Innovation should be protected," says Wayne Sobon, director of intellectual property and associate general counsel at Accenture. "A patent levels the playing field between the big guys and the small companies, so that if a small company has a patent, they are able to complete or build their own company up from the ground with more protection around them during the early stages."

Last updated: Jun 17, 2009




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