Last month, the Court of Appeals for the Federal Circuit decided (sua sponte) to reconsider its landmark State Street decision on patentable subject mater , and ordered an en banc hearing for an appeal in the case of In re Bilski. In its order, the Court presented the following five questions:
(1) Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under 35 U.S.C. § 101?
(2) What standard should govern in determining whether a process is patent-eligible subject matter under section 101?
(3) Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that constitutes both mental and physical steps create patent-eligible subject matter?
(4) Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101?
(5) Whether it is appropriate to reconsider State Street Bank & Trust Co. v Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?
On March 6, 2008, the Patent Office and Bilski’s attorneys filed their supplemental briefs pursuant to the court’s order. The amici briefs should be filed by April 7, 2008.
Bilski’s rejected claim relates to “a method of managing the consumption risk costs associated with a commodity sold at a fixed price for a given period.” In its supplemental brief, Bilski argued that the rejected claim sets forth patentable subject matter because it provides the “useful, concrete, and tangible result” of making “possible the sale, purchase and supply of commodities for a given period of time at a fixed price.” This result, it argued, establishes that the claim does not cover an idea itself and is adapted and applied to a particular end use consistent with the requirements of the relevant Supreme Court decisions.
Bilski further argued that a process does not need to result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101. Instead, it took the position that these tests merely inform the determination of whether the claimed subject matter skirts the prohibited categories of “laws of nature, natural phenomena, and abstract ideas” by demonstrating that a “useful, concrete, and tangible result” is derived from the process.
In addition, Bilski argued that State Street and AT&T should not be modified in any respect because they are based on the Patent Statute as properly interpreted in light of legislative history and the Supreme Court precedent.
In its supplemental brief, the Patent Office argued that Bilski’s rejected claim fails to recite patent-eligible subject matter under section 101 because (1) it is not machine-implemented, and it does not transform any article to a different state or thing, or (2) it constitutes a disembodied abstract idea.
In addition, the Patent Office urged the Federal Circuit to clarify the meaning of State Street and AT&T, which, it argued, have been read inconsistently with Supreme Court precedents. More specifically, the Patent Office argued that State Street and AT&T have been misunderstood to mean that that any innovation with a beneficial effect is automatically patent-eligible.