Supreme Court Ruling Seen as Pro-Innovation – Ruling Bodes Well for Software and Medical Diagnostics Industries

The Supreme Court has handed down a ruling on a case that has been in the spotlight of trademark and patent law for the last year - a case that could have had a chilling effect on the ability to protect IP particularly in the areas of software and medical diagnostics.  The case, Bilski v. Kappos, centered on a business process for hedging risk in the commodities market. 

Bernard L. Bilski and Rand A. Warsaw appealed the rejection by the Federal Court of Appeals of a patent application for their business process.  The Court of Appeals held that the “machine-or-transformation test” was the sole test for patentability and that the process in question did not meet the provisions of the test.  According to the “machine-or-transformation test,” a claimed process is only patent-eligible if it is tied to a machine or apparatus; or if it transforms an article into a different state or thing. 
The Supreme Court ruled that while this test might provide a clue as to whether a process is patentable subject matter, using it as the sole criterion would be too narrow  and could create uncertainty as to the patentability of such innovations as software, advanced diagnostics and inventions based on linear programming, data compression and the manipulation of digital signals. 

According to the patent practice at Calfee, Halter & Griswold, while the ruling bodes well for those in software and medical diagnostics, patent applicants should review their process applications to avoid trying to patent an abstract idea which will likely be disallowed by the patent office.  Instead patent applications should be drafted with claims of varying scope and type in order to maximize the possible identification of allowable subject matter. 

For more information on this ruling, see the story on IP Sharing.com

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