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June 28, 2010 at 08:00 PM
The U.S. Supreme Court has ruled 9-0 against petitioners who tried to patent a commodity price hedging strategy, but the court says inventors may still be able to patent some business methods.
Justice Anthony Kennedy holds in an opinion discussing the case, Bernard Bilski et al. vs. David Kappos, Under Secretary of Commerce for Intellectual Property and Director, Patent and Trademark Office, that the inventors, Bernard Bilski and Rand Warsaw, cannot patent the hedging method because abstract ideas cannot be patented.
All 9 justices agreed with that argument.
Kennedy also writes in his opinion that Section 101 of the Patent Act – the provision of the act that describes the kinds of inventions that can be patented – “explicitly contemplates the existence of at least some business method patents.”
Under federal law, “if a patent-holder claims infringement based on a ‘method in [a] patent,’ the alleged infringer can assert a defense of prior use,” Kennedy says. “For purposes of this defense alone, ‘method’ is defined as ‘a method of doing or conducting business.’ … In other words, by allowing this defense, the statute itself acknowledges that there may be business method patents.
Although all 9 justices agreed with the conclusion that the Bilski hedging formula cannot be patented, only 4 of Kennedy’s colleagues — Chief Justice John Roberts Jr. and Justices Antonin Scalia, Clarence Thomas and Samuel Alito – have agreed with the sections of the opinion in which Kennedy suggests that some business methods can be patented.
Justices John Paul Stevens and Stephen Breyer each has written a concurring opinion stating that business methods cannot be patented. Breyer and Justices Ruth Bader Ginsburg and Sonia Sotomayor have joined in the Stevens opinion; Justice Antonin Scalia has joined in a part of the Breyer opinion that does not directly deal with whether business methods can be patented.
EARLIER BILSKI VS. KAPPOS RULINGS
A patent is a government document that gives an inventor the right to profit from an invention for a specified period of time. Life insurers have applied for patents for inventions such as new product pricing methods, new application processing work allocation strategies, and new variable annuity administration systems in recent years.
