The end of business method patents in US soon to come?

In Insights, Uncategorized

10 October, 2008

It all started in the late 90’s with the State Street Bank decision (State Street Bank & Trust Company v. Signature Financial Group, Inc.) by the United States Court of Appeals for the Federal Circuit (CAFC) broadening the inventive area and thus opening up a flood of business and financially related method patents in the US. After that point, we have seen numerous patent and patent applications for banks, financial institutions and companies like IBM Inc., eBay Inc. and Amazon Inc, relating to on-line bidding, customer relationship management, portfolio handling and so on, together rendering a value of many billions of dollars. However, it looks like the CAFC once again will re-define what may be called an invention, possibly this time decreasing the patentable area and killing the US saying “it is possible to patent anything under the sun made by man”. 

The current trend at the United States Patent and Trademark Office (USPTO) is to tighten up what may be granted in relation to both business method and computer related inventions, e.g. In re Nuijten relating to “encoding to computer signals” and In re Comiskey relating to a business method. The most current case relates to a patent application by Bernie Bilski, which involves claims to a method of managing the risk of bad weather through commodities trading. According to the USPTO the problem is that the wording of the Bilski claims does not include any particular form of technology, e.g. it does not involve any form of computer or storage media, and may thus be seen solely a “mental method” which by the opinion of the USPTO is non-patentable. The case has therefore been forwarded to the CAFC who have to decide if an invention must involve some practical application and if a pure business method really produces “a useful, concrete and tangible result”.

The forthcoming decision was briefly discussed on September 9, 2008 at the AIPPI 41st World Intellectual Property Congress in Boston where Chief Judge Paul Michel of the CAFC said that he expects the Bilski decision to be issued within one to two months. Consequently, we may hopefully expect a publication of the decision no later than early November this year.

As a result and with the present uncertainty, it is necessary (as is well known by all attorneys working in the European jurisdiction) to draft “robust” specifications, and include various embodiments that specify the use of e.g. machines for performing “processing steps”, or demonstrate physical process steps that transform one physical entity into another, thus making the invention concrete and tangible.

Consequently, be prepared for some changes in the US legislation which may have impact on both business method and computer related inventions, and please check back soon – we promise to keep you posted on the forthcoming process.

Magnus Nilsson, Patent Attorney

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