Reading The Bilski Tea Leaves For What The Supreme Court Thinks Of Software Patents

from the there's-still-a-possibility-there dept

Since it's been a week or so since the Bilski ruling, and as more people have had more time to look at and sift through the rulings in greater detail, some are realizing there may actually be a light at the end of the tunnel for those who dislike software patents. Contrary to the claims of the IEEE, the ruling did not, in fact, come out and say that software patents are legit. It sidestepped that question -- in part due to Justice Scalia's decision to opt-out of two sections of Kennedy's majority opinion.

Tim Lee does an excellent job delving into just why Scalia may have opted-out of those sections, suggesting that Scalia is not comfortable with software patents, and didn't want to give that part of the ruling precedential powers:

Back in 2007 I noticed that Justice Scalia (along with Stevens and Breyer) was asking questions that suggested skepticism about the patentability of software. Scalia's position in Bilski confirms that impression: Whenever Justice Kennedy waxes poetic about the Information Age, Justice Scalia gets off the bus. The result is an exceptionally narrow holding that doesn't give much comfort to partisans on either side.

Larry Downes, in looking over the opinions notes something very similar (as part of a much longer analysis of the ruling), in that Scalia seems to very clearly signal that he does not agree with the court's State Street ruling, which is the ruling that opened the floodgates for all sorts of software to be patented:

As noted, Scalia joined all of Justice Kennedy's opinion other than the two sections expressing concern about the impact "machine-or-transformation" would have on what Kennedy refers to repeatedly as inventions of "The Information Age."

There's no way to know why Scalia declined to join those sections (and, therefore, robbed them of precedential status), but one clue can be found in a third concurrence, this one by Justice Breyer, which Scalia joined in part.

...

Scalia joins Part II of Breyer's opinion, which tries to summarize the points on which all nine Justices are, at the end of the day, in agreement. (All nine, of course, voted to affirm the Federal Circuit's rejection of Bilski's application. The only question had to do with the reasoning for that rejection.)

Breyer returns to the cases from which the Federal Circuit derived the "machine-or-transformation" test, and notes that "transformation is the clue to the patentability of a process claim that does not include particular machines." (emphasis in original)

The error of the Federal Circuit, then, was to treat "machine-or-transformation" not as a test, but as "the exclusive test." (emphasis in original) And "machine-or-transformation" is still a far better test, Breyer (with Scalia) goes on, than the much broader statement from State Street ("useful, concrete and tangible result") that started this whole mess.

Here's the kicker. Breyer and Scalia agree that "[t]o the extent that the Federal Circuit's decision in this case rejected [the State Street] approach, nothing in today's decision should be taken as disapproving of that determination."

So, there you have it. Scalia doesn't like State Street and doesn't hate "machine-or-transformation."

Finally, an analysis over at Patently-O by Shubha Ghosh also suggests that the Supreme Court is signalling that it's not a fan of the State Street decision, and thinks it's important for the Federal Circuit to establish a different test for software patents:

Specifically, the Court has now revived the Gottschalk-Parker-Diehr line of cases, which were established before the creation of the Federal Circuit and which the Federal Circuit had distilled over time into the expansive "useful-concrete-tangible" approach to patentable subject matter and then into the "machine or transformation test." In effect, the Supreme Court by reviving its precedent has negated over twenty-five years of the Federal Circuit's attempts at doctrine. This revival opens up possibilities for examiners to rethink the relationships among process, machine, and the physical world. "Dubious" patents may be rejected because the physical phenomenon is trivial or too preemptive of the field. Patent claims might require closer connection to a machine embodiment as opposed to an abstracted, disembodied form. An interesting question to ask is whether the patent at issue in State Street would survive the analysis proposed by Bilski. On the one hand, the asset allocation method at issue is arguably as abstract as the hedging method. On the other hand, the method seems closely tied to a machine to give the process some specific limits.

So, what does this mean for folks who are troubled by software patents? Well, Bradley Kuhn has a few suggestions, but I would imagine some folks are out there scouring the country for a potential new test case that really zeroes in on the question of what test should be used to judge whether or not a software is patentable. Right now we have an effectively clean slate, but it doesn't mean that software is, inherently, patentable. It just means the courts still need to determine the appropriate test, and it appears that an important bloc of Supreme Court Justices are at the very least open to a rather strict test on software patentability.

Filed Under: bilski, patents, scalia, software patents