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Unsettled Decision

The U.S. Supreme Court has ruled on a closely watched patent case, but with the ruling, is the issue finally closed?

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The U.S. Supreme Court’s June 28 decision in the Bilski v. Kappos case, despite being hailed as a victory for patent holders, leaves open a host of questions about intellectual property law with deep ramifications for the region’s technology and IP communities.

In the most closely watched patent decision in years, the nation’s high court tossed an appeals court ruling that had significantly narrowed the definition of what is patentable, jeopardizing a host of software and “business method” patents. While the opinion puts those patents—which include intangible processes like Amazon’s 1-click checkout—on safer ground, it charted a unclear future for an already foggy area of the law.

The IP field is going to have to adjust to new ambiguity and uncertainty, said Hans Sauer, deputy general counsel of the Washington, D.C.-based Biotechnology Industry Organization.

“There is a lot of pressure for rigid tests in patent law,” he said. “And I think it’s a good development that the Supreme Court keeps saying ‘No, we understand there is this instinct to want to have these bright-line tests, but patent law is like other commercial law—it must have some flexibility, and it must have some tolerance for ambiguity.’”

Legal battles over medical patents could be the first to test the effect of Bilski. Two major biotech lawsuits were sent back to the federal appeals level in light of the June 28 decision: Mayo Collaborative v. Prometheus Laboratories, which involves an attempt to patent a dosing method for a Crohn’s disease drug, and Classen Immunotherapies v. Biogen Idec., which concerns Baltimore, Maryland-based Classen’s patent of a way to test the effectiveness of vaccine schedules.

Many of the region’s tech companies rely heavily on software patents. Washington, D.C.-based e-learning company Blackboard Inc. recently settled protracted litigation against competitor Desire2Learn Inc. over Blackboard’s education software patent.

In the Bilski decision, the Supreme Court backed the appeals court ruling that a method for hedging risk in commodities trading proposed by Bernard Bilski and Rand Warsaw was not patentable, but it rejected the lower court’s notion that the sole test for a patent was the “machine or transformation test.”

The standard requires an invention to be a new apparatus or turn one material into another to be eligible for a patent.

“I’m obviously very happy about that” broader ruling, said attorney Michael Jakes, who argued for the two inventors. “But we couldn’t convince them to go the last step and say our claims weren’t too abstract.”

While the machine or transformation test may have been suitable for the industrial age, “there are reasons to doubt whether the test should be the sole criterion for determining the patentability of inventions in the Information Age,” Justice Anthony Kennedy wrote in the majority opinion. He left open, however, the possibility that other limitations could be imposed by courts on what can be patented.

Kennedy’s wording “makes clear that there are still some questions left to be answered,” said Deanne Maynard, chair of the appellate and Supreme Court practice group in the D.C. office of Morrison & Foerster LLP.

Establishing a lone test for patent eligibility is “hardly possible” under constantly evolving technology and law, said Alexander Poltorak, CEO of patent-enforcement company General Patent Corp.

“It’s hard to imagine there will be one single test the Supreme Court is going to be very happy with,” he said.


Bill Flook is a writer for the Washington Business Journal.

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