March 20, 2006--A case before the Supreme Court this week is seeking to establish what kind of discoveries can and cannot be patented and may have implications on intellectual property rights for everything from computer software to innovative management techniques, legal experts said.

The case, which pits a large clinical testing firm against a team of university researchers, comes on the heels of a recent U.S. Patent Office campaign urging small businesses to file more patents.

Kevin Noonan, a partner with McDonnell Boehnen Hulbert & Berghoff in Chicago, said the outcome could be "grave" for smaller firms, particularly those in the biotech field.

"If the court goes as far as it might, there could be a wholesale destruction of the value of any patent claiming diagnostic tests," among other innovations, Noonan said.

Still, the case has also caught the attention of patent holders in other sectors -- with briefs filed by Lehman Brothers, American Express, and IBM, among others.

The case centers on a clash between LabCorp, a clinical testing firm based in Burlington, N.C., and a team of researchers at both Columbia University and the University of Colorado.

In 1998, LabCorp stopped paying royalties for using a diagnostic test -- patented by the researchers a decade earlier -- for detecting vitamin deficiencies in patients, which it said consists of a "basic scientific relationship."

The researchers sued LabCorp and were awarded $5 million.

LabCorp has since appealed twice -- and lost -- on the grounds that the group's patent is a violation of patent laws.

Under the Patent Act, intellectual property protections cannot be owned for natural phenomenon, laws of nature or abstract ideas.

The group insists the patent covers a unique method developed by a team of university researchers. Throughout its brief, the researchers are cited as the "inventors."

According to the Solicitor General's office, which filed a brief on the case at the request of the court, questions of patentability were not raised at the lower court level, and as such, the case should be dismissed.

Still, Noonan said the court, in agreeing to hear the case at all, might be seeing it as a way of curbing the growing number of patents filed in recent years.

"The court has show the propensity recently to get involved in these types of issues, so any predictions about what they will do are just tea-leaf reading," he said.

Other recent high-profile infringement suits have involved Blackberry maker RIM and eBay.