Source: https://www.ipwatchdog.com/2009/11/09/bilski-arguments-complete-at-the-us-supreme-court/id=7217/
Timestamp: 2019-04-22 04:18:14+00:00

Document:
At 2pm ET on November 9, 2009, Chief Justice John Roberts gaveled the session to a close announcing that the case had now been submitted. The arguments were good, and the Court was most assuredly hot, peppering both sides with question after question seeking to probe the issues. It is clear that the Supreme Court did their homework and spent no time gravitating to the weak points of the parties. Representing Bernard Bilski was Michael Jakes, who was continually questioned about business methods in general and whether the framers or the authors of the 1952 Patent Act could have ever contemplated business methods being patentable. Representing the United States Patent Office, Deputy Solicitor General Malcolm Stewart was questioned repeatedly with respect to the “extreme” decision reached by the Federal Circuit, not to mention the fact that the government’s position is that an old computer running new software could somehow potentially be patented as a new machine. At the end of the day I have to think that it does not bode well for Bilski and his method, but if the questions raised by the Supreme Court are any indication it seems like the Federal Circuit will be overruled and the software and medical industries will dodge a Bilski bullet. For more analysis be sure and check back in the coming days, weeks and months, and join me for a PLI Bilski briefing on Wednesday, November 11 at 1pm ET.
Now as I was ushered into the courtroom with other members of the press I was surprised to see that myself, and about ten others, were given limited view seating, sitting behind Romanesque columns adorned with velvet maroon drapes with gold braided strands touching the floor. There were ornate golden lattice doors about 8 feet tall between the columns, but most were at least open. I never expected my first Supreme Court argument to be viewed from such a place, particularly when there were numerous reserved press seats open, unclaimed and with full view of the courtroom. So the report that follows is accurate with respect to what was said, and for the most part I know which Justices asked which questions, but will follow up with any additions or modifications when I get an advance copy of the oral argument transcript. Who knew watching the Supreme Court would be akin to watching the Boston Celtics at the old Boston Garden!
Jakes started his presentation by explaining that the Federal Circuit ruling does not find any basis in Section 101, anywhere in the Patent Act and is inconsistent with Supreme Court precedent. That was the last time he would get out an offensive presentation until his rebuttal, some 55 minutes later. Jakes was cordial, knowledgeable and professional and gave an excellent presentation, but was kicked around Justice by Justice who seemed very uncomfortable with the patentability of business methods, or at least the patentability of this particular business method.
At one point Justice Breyer jokingly probing to see where the limits on business method patents should be explained that he himself had devised an “original method to teach antitrust law that kept 80% of the students away.” As you can imagine, the gallery erupted with laughter. Justice Breyer then followed up explaining that he is nonetheless “a little nervous about the Circuit’s decision.” This being uncomfortable with the Federal Circuit is really the norm here at the Supreme Court, who rarely if ever any longer take a case from the Federal Circuit to explain that they got it right. Quite to the contrary, the Supreme Court seems to take case after case in the patent area to fix a wrong perpetrated by the Federal Circuit, and I do not expect that trend to stop here with Bilski, although Bilski may, himself, still find that his application is rejected under 101.
Justice Scalia continued his typical approach to patent law by seeming to not really take the issues very seriously, as if they are not particularly important. You may recall that during the KSR oral argument Scalia called patents and patent law “gobbledygook.” Today there was no talk of “gobbledygook”, but Scalia noted at one point that there are certain endeavors of the past that do not exist today, and suggested that certainly there must have been a “horse whisperer” at some point in time that would have liked a patent. Scalia then asked “why didn’t anyone patent that?” Jakes pointed out that the economy at the time was different and steeped in the industrial revolution, to which Scalia replied “our economy was based on horses for Pete’s sake!” The courtroom again erupted in laughter. I just shook my head. I am sure Justice Scalia thinks that horse whispering is important on some level, or perhaps getting the approval via laughter from the gallery is more appropriate than probing the issues.
Justices Kennedy, Scalia and Sotomayor spent time with Jakes asking about the Morse code patent and the core Alexander Graham Bell patent. The exchange was an interesting one, but deserving of some detailed treatment, so I will save that for a follow up post once I have the official transcript and can dig into the briefs in some detail.
Justice Roberts then lead Stewart into the thicket where he most certainly did not want to go. Roberts pointed out that the government in its brief acknowledged that a process might be patentable if it uses a computer or a microprocessor. Roberts said: “that takes away everything you spent 53 pages establishing.” This line of questioning dominated the remainder of Stewart’s presentation. Roberts explained that the government’s position suggests that even a tangential use of a machine makes something patentable, to which Stewart replied that it might indeed.
Justice Breyer then chimed in noting that if all you have to do is define a computer that engages a process all business method patents are back in, which demonstrates that Justice Breyer does well understand the issues, and perhaps the reality of what is done by patent attorneys. The reality is that if Bilski stands as it is today software is still patentable, although we have to play in the fictitious world where the machine is “new” despite being the same old machine just operating new software.
As this exchange unfolded it started to take on Abbot and Costello familiarity; tangential use of a computer being enough to transform a new process into a new machine simply because the new process is carried out on an old machine. This lead Stewart to remark that this is why the government opposed the granting of cert by the Supreme Court, to which Kennedy said: “because you thought we would mess it up.” The courtroom erupted in laughter. That is exactly what every patent attorney fears, and I suppose there is at least some comfort knowing that the Supreme Court understands that there is a lot at stake and no one wants to make matters worse, although it is hard to imagine that we could get anything worse than the Federal Circuit Bilski majority.
The most persuasive part of the presentation made by Jakes was his rebuttal. He reserved 4 minutes, but did not take all of his time. He was short, sweet and to the point, making his best, most forceful points of the afternoon; a perfect rebuttal stylistically. Jakes explained that the Federal Circuit did announce a rigid test that is the sole test, which is obviously pandering to the Supreme Court insistence in the patent realm that rigid tests not be applied (see KSR). For the first time 35 USC 273 was raised, pointing out that Congress knew about business method patents and chose not to prohibit them, but rather chose to create a prior user defense to infringement. Jakes explained that the question that should be asked was whether Bilski was seeking to patent an abstract idea and whether the process in question has a practical application. Jakes also pointed out that there are physical steps associated with the Bilski process. He had previously been asked whether picking up the phone and making calls was the physical step he was referring to, and he had said “yes, possibly.” He again made that point but this time also said that ultimately there is a purchase and sale of a commodity, which is itself, within the physical realm. While your mileage may vary, that is the best physical step he could point to, and being delivered last and then giving up his remaining time that might weigh in the mind of the Court.
Who knows what will happen for sure, but I think we will get a reprieve from the extreme Federal Circuit decision, I think Bilski will still be out of luck and the Supreme Court opinion will look something like the Newman and Rader dissents. Whatever happens, it will be interesting for sure. On a personal note, it sure was cool being granted press credentials to the Supreme Court, and my press credentials were waiting for me under the name IPWatchdog, so maybe bloggers and online reporters are making it into the mainstream, which would be a nice development indeed.
I thought Breyer had said his teaching method kept 80% of his students awake, not away. Certainly brought laughs, either way.
I think it’s pretty clear that the SCOTUS is going to find the Bilski invention unpatentable under 101. I also think that the SCOTUS hinted well-enough that it thinks that a computer + different software would not make a different machine or new invention. But I’m certain they are not going to go that far with this case.
Nevertheless, Gene, I think it’s the height of arrogance to think that we as patent attorneys know what’s best for the patent law and that because it’s an arcane area of the law, no other judges should be able to “tinker” with it. The joke about “messing it up” was spot on. I really can’t imagine practitioners in too many other areas having the kahones to even suggest that that’s what would happen.
But the real point is from “messing it up for whom?” Messing it up for the patent attorneys that thought that those claims should have been allowable, that suggested appealing them all the way to the very top? I personally do not want to defend the Bilski claims since they are idiotic. Claims such as these defy reason.
Since the Fed. Cir. opinion, I have long maintained that the Fed. Cir. was simply using the 101 hammer to smack crappy claims out of patents. But I think that 101 is the wrong tool for that purpose, the claims should have been killed under 112, but that was not before the Fed. Cir.. As a result, SCOTUS has an awkward procedural posture. For this reason, I think that cert. was improvidently granted in this case: crappy claims rejected by a weird Fed. Cir. opinion that arguably shifted a fundamental area of the law. SCOTUS probably has a hard time reconciling these two issues. In an ideal world, the claims should have gone back down and rejected on 112 grounds.
Frankly, I think that the patent world would be much happier if the case before the SCOTUS was set up as a 112 issue that would allow SCOTUS to breath life back into 112.
Thank you for the great report. Excellent work.
‘Justice Stevens (I believe) to say “you cannot say a computer using new software is a new machine.” ‘ — This quote shows how technologically inept the Court is. Surely a general purpose computer programmed with new software is no different that a machine that has been completely rewired to function as its programmed cousin, and therefore, it is a new machine.
“kept 80% of the students away” – slight typo there.
“On a personal note, it sure was cool being granted press credentials to the Supreme Courts, so maybe bloggers and online reporters are making it into the mainstream, which would be a nice development indeed.” – I bet. It really is fascinating the way things are progressing.
Unfortunately, it sounds as if the Supreme Court will throw into play once again patents on the relationships between genetic variants and clinical phenotypes. As Justice Breyer noted in his important dissent in LabCorp v. Metabolite Laboratories, patents that claim unpatentable natural phenomena can be artfully drafted in the form of processes. Genetic variants that correlate with present or future disease, severity of illness, and drug responsiveness are regularly discovered using routine, automated techniques. Why should the biological relationship between a genetic variant and a clinical result be patentable? Often several groups almost simultaneously report a discovery. Frequently, patents are awarded to investigators in other countries.
From the perspective of a pathologist, the sole effect of these patents is to prevent us from practicing our profession. Most such discoveries have been made by academic researchers who are publicly funded, and for whom the requirements for publication and receipt of research grants provide sufficient incentives to perform their daily work. Patents on such correlations are unnecessary to encourage the introduction of testing, because assays are performed using standard, well-established methods and techniques (which are themselves rightfully patented). Setting up molecular diagnostic tests for gene-variant correlations is typically straightforward and a routine part of our practices.
How would the field of medicine have advanced if relationships such the association between diabetes and elevated blood sugar had been patented? Should one person be given the right to exclude others from listening for heart murmurs and correlating the sound with the presence of aortic stenosis? Pathologists have looked through microscopes to make diagnoses for well over a hundred years. We have examined the features of tissues and correlated them with the presence of disease and appropriate therapy. Advances proceeded in the absence of patents. In recent years we have added the examination of proteins and chemical characteristics to microscopy. Again, patents were unnecessary to stimulate this progress. Now we can look at DNA and RNA changes that have the potential to provide much greater accuracy and are far more predictive of therapeutic responsiveness than previous methods. However, we find progress and advancement stifled by the presence of patents on mere biological relationships for which no inventive work was performed.
Only through broad availability of tests for the natural relationships between genetic variants and diagnosis, prognosis, and response to therapy can the benefits of our increased knowledge be realized and improved upon.
I saw you taking pictures Gene, but it does not look as though I’m in the one you have up.
Pretty cool that you were able to get a press pass.
I read online that you can typically get into afternoon arguments by showing up around 11:30, but obviously this case was very popular so that was not the case. I’d guess I would have had to have been in line for the morning arguments to have had a chance.
Thanks for the info, Gene. I wish I could have made it there myself. Any idea when the decision will actually come out?
And anyone have any thoughts on how it may affect Sotomayor’s disposition that her ex-husband is a patent attorney?
Having now read through the oral argument transcript, it speaks volumes on what I’ve said before: using 35 USC 101 as anything other than a coarse screen to rule out patents on abstract ideas, natural phenomena, and discoveries of laws of nature is an exercise in futility. The Justices repeatedly asked for a test other than the Federal Circuit machine or transformation test that could be used, and it’s clear from what was said during oral argument that no objective test can be articulated beyond screening out abstract ideas, natural phenomena, and discoveries of laws of nature. Justice Breyer frankly confessed that he couldn’t come up with any meaningful test under 35 USC 101. The Chief Justice was particularly on target is asking Jakes whether the Bilski claim covered an abstract idea. In other words, what Judge Rader said in dissent was correct: this Bilskl claim is not patentable subject matter because it simply covers an abstract idea.
I also give high marks to what Justice Sotamayor appears to understand: the Bilski claim is being judged for patentability under the wrong patent statute. It’s pretty clear to me she feels this Bilski claim should be judged first under 35 USC 102 or 103, not 35 USC 101. And I give very low marks to Justices Scalia and Ginsburg. Scalia obviously can’t get past the 19th Century. And Justic Ginsburg’s comment about looking to international patent standards was very nicely shot down by Jakes.
I thought Jakes did a pretty good job considering the difficult position he was trying to argue for. He at least understands that O’Reilly v. Morse is really an enablement or claim scope case, not a patentable subject matter case. He certainly had a better command of his argument than those who argued in KSR International.
Bottomline: If the oral argument is any reflection of where SCOTUS is going with this case, they aren’t going to issue an “earthshaking” ruling here. I predict the Federal Circuit “machine or transformation” test will be trounced as too inflexible (SCOTUS may still retain it as a test, but not the only one, like TSM in KSR International). I also preduct that SCOTUS will affirm the PTO ruling that the Bilski claim is not patentable subject matter but on the ground that it covers an abstract idea, as suggested by Judge Rader’s dissent.
The only thing unclear to me is how SCOTUS will treat the enactment of 35 USC 273 on the issue before them. Other than Jakes mentioning it during oral argument, there really wasn’t any comment from the Justices on this statute.
Enjoyed the report and your observations on the justices’ various lines of questioning/comments. Thank you.
It strikes me that this, if true, may have interesting implications with regard to infringement. If you’re right, then the person who runs the software (the end user) creates a new infringing machine each time the software is run. Conversely, the software makers and distributors do not infringe any patents, except when they themselves run the software. Their primary activity is merely distributing instructions for how to create an infringing machine, which I assume is not itself infringement (or else distributing the patent claims would be infringement). So it is the software end users who should be prosecuted for infringement, not the software makers.
273 is the elephant in the room. For all of SCOTUS’s postering, they know that Congress decides what is patentable subject matter and what is not. It would be difficult for SCOTUS to complete ingore that 273 implicitly acknowledges the patentability of business methods.
I think at least some Justicies recognize that they could muck up the works. If SCOTUS reverses on this basis, it would be the first time that SCOTUS decides that Congress already spoke on the issue, and it isn’t up to SCOTUS to put aside Congress’s determination as to patentable subject matter. Thus, if somebody wants to change the definition of what constitutes patentable subject matter, they need to take it up with Congress.
BTW: As an aside — what is a “business method”? Almost all claimed methods are performed by a “business.” We think we know what constitutes a business method, but what would be the legal definition?
Not necessarily. If I have a machine (covered by a patent), and take a part of the machine (so that it is no longer covered by the patent) and then put the part back on the machine (so as to make it again covered by the patent), I highly doubt I could obtain damages calculated based upon two machines. You might be able to convince an unexperienced judge to buy into that, but I very much doubt it would ever make it through the Federal Circuit.
This is where Beauregard claims come into play — as well as contributory infringement.
FYI — there is a difference between a software instructions (i.e., software code) and a recipe.
Funny you should ask. 35 USC 273 defines the term “method” as meaning a “method of doing or conducting business.” But 35 USC 273 provides NOT A CLUE on what a “method of doing or conducting business” is or means. So it’s anyone’s guess what a “business method” really is.
Frankly, this whole focus on whether “business methods” are patentable subject matter under 35 USC 101 is an unnecessary distraction. It just reaffirms my view that you should judge what is claimed first under 35 USC 112, 102 and 103 before you resort to whether 35 USC 101 is implicated. Evaluation of the claimed subject matter, especially under 35 USC 112 (first or second paragraphs), will often shake out whether what is being covered is, in reality, an abstract idea, natural phenomena, or a law of nature. More importantly, 35 USC 112, as well as 102 and 103, can be applied objectively. The Bilski case proves SCOTUS (based on the questions asked during oral argument), as well as the Federal Circuit (based on the nonsensical “machine or transformation” test) can’t apply 35 USC 101 objectively.
Someone on Patently-O made the astute observation about how to separate out the “abstract idea” chaff from the “real world” wheat: reinstitute the “useful, concrete and tangible result” standard. Reinstituting this standard would do much to make 35 USC 101 objective. The Bilski claim would have failed this standard as not providing, as that someone said, a “concrete outcome.” The Federal Circuit should have never dumped this standard in Bilski.
My point here is not that damages could necessarily be collected for the separate infringements happening with each run of the software (though that’s an interesting idea that is consistent with the argument), but simply that the user is the one creating infringing machines.
I’m not sure how Beauregard claims interact with the idea that running software is the same as physically reconfiguring a machine. I know little about the history, but my impression is Beauregard claims are a particular form of writing developed because it’s likely to get a claim through the PTO, but the “software as hardware reconfiguration” idea is the basis for a fundamental argument about patentable subject matter. They only seem related because they’re both ways to convince someone to patent software, but I might be grossly misunderstanding the issues.
On a side note, I don’t think your metaphor matches the “software as hardware reconfiguration” argument.
A more accurate metaphor would be to say that when the user runs the software, it’s like ordering a bunch of parts (rods, plastic pieces, transformers, wires, etc) and assembling them into an infringing machine. When the software exits, it’s the same as taking the entire machine apart back to its original pieces (and probably using them for other purposes). The next run would be a complete new construction from basic parts.
Rob G. I agree it is completely clear that most of the justices on the supreme court do not understand technology well enough to make an informed decision in this case. As evidenced by Justice Stevens (I believe) to say “you cannot say a computer using new software is a new machine.” In order for the court to make the right decision in this case and patent law in general they need to not only understand the law they need to understand facts (technology).
Absolutely correct and on point. SCOTUS is technologically-challenged to the nth degree. What’s worse is they’re too arrogrant to admit it or get help to make them less clueless.
Gottschalk v. Benson was the first indicator of how much computer technology is over the heads of SCOTUS. The more recent case of Microsoft v. AT&T is a real “giggle” where the majority analogized how software works to an architectural blueprint. Dissenting Justice Stevens did much better by analogizing software to how a piano roll works in a player piano (much like the Jacquard loom that was the predecessor to the IBM punch card).
My fellow patent attorney brother has the same low opinion of the current SCOTUS that I do. With the exception of Justice Sotamayor and possibly Chief Justice Roberts, the Bilski oral argument didn’t change my opinion much, if any, that regard. In fact, we in the patent bar should hope that Sotamayor gets to write the opinion for the Court. She at least has had some “real world” IP experience.
Actually, I think the reason that you patent attorneys are so upset is because the Supreme Court Justices understand patent law only too well. I believe that they understand exactly how much damage the current situation causes to our economy. Taking the current situation to its logical extreme goes beyond economic damage and begins to directly impact our rights as citizens.
Software patents in particular should not exist. No other form of abstract idea falls under both patent and copyright law for a good reason. The appropriate solution is to eliminate the abomination that are software patents and go back to the appropriate legal coverage provided by copyrights.
However, I doubt many reading this blog will agree with me.
What Me, you clearly do not understand computers and software if you believe they are abstract ideas. . The arguments against software patents have a fundamental flaw. As any electrical engineer knows and software developer should know, solutions to problems implemented in software can also be realized in hardware, i.e., electronic circuits. The main reason for choosing a software solution is the ease in implementing changes, the main reason for choosing a hardware solution is speed of processing. Therefore, a time critical solution is more likely to be implemented in hardware. While a solution that requires the ability to add features easily will be implemented in software. Software is just a method of converting a general purpose electronic circuit (computer) into a application specific electronic circuit. As a result, to be intellectually consistent those people against software patents also have to be against patents for electronic circuits.
By definition, a copyright applies to any **expressible form** of an idea or information that is substantive and discrete and fixed in a medium.
There is a reason why many of us make fun of the anti-patent/copyright crowd. You know little about the law, and your misconceptions are so bad that it becomes comical.
How did we get to software patent again? Are we still in the Bliski case?
I mean there’s no computer and there’s no software here. Or rather the computer and software are not part of the claim. So how did we get into software patent again?
It is not right to make fun of technical people because they didn’t go to law school.
No human being knows everything.
There is a great deal of technical stuff that we legal eagles are completely ignorant of.
That said, it is well established law that pure “ideas” cannot be blocked by either copyright law or patent law.
Indeed, in copyright law there is a doctrine called the idea/expression dichotomy doctrine. When idea and its expression so merge that it is impossible to provide them separately, the expression cannot be copyrighted.
I’ll give you a simple example. Consider the expression: “buy low, sell high”. That is pretty much the most efficient method of conveying the underlying idea that economic profit is made by buying goods at a low price and reselling them at a higher price. Awarding a copyright to the compact expression, “buy low, sell high” would impede the free flow of the underlying “idea”. The idea/expression dichotomy doctrine therfore comes into play with such an expression.
Justice Sotomayor is not an expert in information/ data/ knowledge theories. So I think she misspoke by using the word “information” rather than “ideas”. A book contains “information”. Copyright laws are clearly intended to prevent the “free” flow of book content “information” without compensating the author or getting his/her permission. What she meant was “ideas”. Bilski’s Claim 1 does not and cannot prevent the free flow of ideas about what the counterpart risks are for commodity buyers and sellers.
position,” “balances the risk position.” The paucity of the description in the Bilski patent specification simply doesn’t define these claim terms, nor does it “enable” the claim scope.
This reinforces my view that claims should be judged first under 35 USC 112 before applying 35 USC 101. That 35 USC 101 comes before 35 USC 112 in the statutes shouldn’t change tihs. Until you understand what the claims mean, and whether the scope of those claims are enabled under 35 USC 112, determining whether the claimed invention is “useful” under 35 USC 101 is an exercise in futility.
I also remain convinced that the “useful, concrete, and tangible result” standard should be reinstated for determining whether 35 USC 101 is satisfied. It is the only objective standard I’ve seen for applying 35 USC 101. How to apply this standard to root out claims to “disembodied” abstract ideas is articulated well by Alappat and State Street. Again, 35 USC 112 should be the initial screen, not 35 USC 101.
will be an interesting outcome but not so sure we will get a bright line without a real understanding of information theory as per step back. while EG is right that allapat and state street should guide, even the mpep at 2106.01 versus 2106.02 is a bit tricky to understand for examiners, lawyers & inventors alike … there is a group in 2400 which does assist on interpreting 101 (outside of your spe you can check with them for guidance), but i have found that people just can’t express an objective enough standard.
and, as i’ve said time and again, every patent (well, that has monetary value) is a claim to a business method. my patented process that can only be performed on your capital intensive equipment still remains my patented process (& maybe i just don;t want to own or invest in equipment but still want that patent!).
I am getting into IP law – studying for the Patent Bar to be a patent agent, and perhaps, patent attorney. The transcript was fun to read. I wonder whether a video recording is available.
SCOTUS technologically-challenged may seem a danger to a “right decision”, but technology is made of vast areas of knowledge, those areas together too vast to make and apply a single standard on. The standard I’m talking about is (“technology”), to apply it, as to what is patentable, based on every area of technology in turn, as a given area applies held as “truth” or “fact” at the time in a Court by the technology holder, with every Court + Judge with the same knowledge level in the given “technology” ?. In my opinion, not only would such a system be poor, but open to control from outside sources of “technology”, being that change is ongoing !.
This article and the associated comments provide exceptional insight into the Bilski case.
As a CEO of a technology start up you have given me great confidence that our software patents will be valid.
The Justices on the US Supreme Court are not totally ignorant. They fully understand that software is a big business and it is responsible for a significant portion of the USA GDP. So they are not going to out and out kill all software patents.
On the other hand they may become reckless in how they handle the Bilski hedge method question and they may create new law that has unintended consequences.
One of the last big patent cases the SCt managed to mangle was KSR v. Teleflex. The unintended consequences there is that it has made patent prosecution far more expensive than it used to be. The ones who bite the bullet thanks to KSR are the small solo inventors who cannot afford long legalistic battles with the US Patent Office over what constitutes “ordinary creativity” and “common sense”. Let’s hope Bilski does not head in the same direction.
I am not sure you are right. The Supremes may have drunk the cool aid that patents are inhibiting innovation (invention). The history of the Supreme Ct. in the last 100 years is almost all on the side that thinks patents are evil.
What about Chakarbarty (everything made by man under the sun)?
What about Diamond v. Diehr?
I think that somewhere under those thick “gobbledygook” skulls, some of the SCt. Justices must have at least a hunch or an inkling that much of the prosperity of the USA in the last 100 years was due to inventors like Edison. Bell, the Wright Brothers, etc. and their ability to patent their new fangled inventions.

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