PATENTS FOR BUSINESS METHODS (REVISED II)
The Court of Appeals for the Federal Circuit (last stop before the Supreme Court) ruled that a process, i.e., method of performing a function, could be patentable if the process included use of a machine or there was a resulting transformation of a particular article into a different state or thing. Keep in mind this standard pertains to whether a new development is patentable subject matter. There are the separate tests of whether the development is novel or whether the development would be obvious to a person skilled in the art.
What this Court decision signifies is a pulling back on the patentability of business methods. For example, it is unclear whether a standard computer processing unit (CPU) constitutes a machine. Some commentators have already expressed the belief that the Court of Appeals for the Federal Circuit has indicated that a “general purpose computer” is not a machine within the meaning of the machine or transformation test.
Under the specific facts of the recent case (In re Bilski) “the transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test (machine or transformation test) because they are not physical objects or substances, and they are not representative of physical objects or substances. As discussed earlier, the process as claimed encompasses the exchange of only options, which are simply legal rights to purchase some commodity at a given price in a given time period.
Software remains patentable if part of a process meeting the machine or transformation test.
Unfortunately (of fortunately), the Court of Appeals for the Federal Circuit has not been consistent in its decision regarding the patentability of business methods involving computer steps. The Court in Ultramercial v Hulu found a process wherein a subscriber received copyright material in exchange for viewing an advertisement. The Court ignored the machine or transformation test (discussed above). The Court found that the process involved “extensive computer interface” and therefore constituted a patentable invention. Adding to the confusion is an earlier 2011 decision, entitled Cyber Source Corp v. Retail Decisions, determining a method of validating credit card transactions over the Internet was not a patentable process. Undoubtedly there was extensive computer interface in the credit card validation method. The only answer to this dichotomy is that the decision depends upon the composition of the three member court. This is not sustainable. The Supreme Court needs to step in a make a definitive ruling.
It is clear that merely a mental process can not be patented. It is whencomputer programming is added to the process that the uncertainty begins.
November 5, 2011
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