Patentability and Value of Business Methods and Software in the Balance: the Bilski v. Kappos Case Oral Arguments Heard at the Supreme Court

CONSOR Intellectual Asset Management warns: The future of software and business method patents still hangs in the balance after oral arguments were heard by a Supreme Court with significant unknown factors as far as Intellectual Property law is concerned.

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IP cases have had the breadth of potential consequences for industries like finance and software as the Bilski case. The economic value of myriad companies can be significantly affected if the Supreme Court refines the interpretation of what is patentabl

La Jolla, CA (PRWEB) November 14, 2009 –-

CONSOR Intellectual Asset Management warns: The future of software and business method patents still hangs in the balance after oral arguments were heard by a Supreme Court with significant unknown factors as far as Intellectual Property law is concerned.

At the hearing held Monday, most Justices expressed signs of skepticism about the patentability of pure business methods like those claimed by the Bilski patents on financial hedging strategies. Significant uncertainties remain, however, over the leanings of most justices regarding the status of software patents.

“Few IP cases have had the breadth of potential consequences for industries like finance and software as the Bilski case. The economic value of myriad companies can be significantly affected if the Supreme Court refines the interpretation of what is patentable.” Said Fernando Torres, MSc., Chief Economist at CONSOR® Intellectual Asset Management.

In essence, Mr. Torres explained, the Bilski patent claims to cover a method of hedging risks in commodities trading. The PTO's Board of Patent Appeals (BPAI) found that Bilski's such claimed “invention” of a business method does not satisfy the patentable subject matter requirements of patent law (35 U.S.C. § 101).

In Re Bilski (Fed. Cir. 2008)(en banc) the Federal Circuit affirmed this conclusion and, in doing so, the nine-member majority opinion spelled out what is known as the "machine-or-transformation" test as the sole test of subject matter eligibility for a claimed process. The "test" at issue here is: “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”
Mr. Bilski appealed to the Supreme Court earlier this year, and a total of 68 amicus briefs were filed, a third of them in support of neither party, thus reflecting the importance of the ruling per se, more than the fate of the specific patent.

Positions on the matter are quite definite; for example, The Electronic Frontier Foundation considers business method patents harmful and asks in its brief that such patents should not be allowed to stand. Rather, to be patentable, an invention must be a technological advance.

The Software and Information Industry Association, on the other hand, argues that the patent eligibility of software is well established and should not be disturbed. The consequences for the software industry are clearly dramatic.

In a well known position, the American Bar Association supports the elimination of patents covering tax planning methods in particular, and generally, that patent law should not interfere with the exercise of human intellect by granting a monopoly on processes in which thinking is central.

Numerous corporations from banking to the Internet also seek to have the Supreme Court rule against the patentability of accounting methods, tax mitigation techniques, financial instruments (like Bilski’s), among other methods.

“We await with great interest, on behalf of our clients, the Supreme Court’s decision on this important issue,” Mr. Torres expressed.

About CONSOR:
CONSOR is recognized as an industry leader in the valuation, licensing and disposition of all forms of intellectual property and intangible assets. CONSOR professionals have extensive experience in evaluating, appraising, and testifying to the value of intellectual property and intangible assets in litigation and strategic planning engagement. Over the years CONSOR has consulted in some of the most significant intellectual property litigation cases and corporate restructuring deals where IP has been at the core of the negotiations.

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