Stuart Freen is a JD candidate at Osgoode Hall Law School.
Following the release of the much anticipated U.S. Supreme Court decision of Bilski v. Kappos, the U.S. Patent and Trademark Office has recently published some interim guidelines on subject matter patentability. Titled Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos, the document provides a consistent approach for patent examiners to apply the principles espoused by the SCOTUS. Notably, the guidelines instruct examiners to place less emphasis on §101 of 35 U.S.C. (subject matter eligibility) which the Supreme Court noted was only a “threshold test”. Instead, the guidelines suggest that examiners focus on other requirements such as §102 (novelty), §103 (non-obviousness) and §112 (specification).
As covered here last month, Bilski v. Kappos was a highly anticipated patent case that hinged on whether business methods are patentable. The applicant had devised a method of hedging fluctuating commodity prices by selling consumers energy at fixed rates. The Supreme Court was unanimous in its finding that the claimed invention was unpatentable because it was an abstract idea (a category of invention which is inherently non-statutory). However, the Court was split on the issue of whether business methods as a category are patentable. The majority held that they can be, so long as they don’t run afoul of the other sections and exceptions of the legislation.
The Court also rejected a strict application of the “machine-or-transformation” test under which abstract processes must either a) be tied to a particular machine or apparatus, or b) transform a particular article into a different state or thing. The Court found that the machine-or-transformation test is only a “useful and important clue” as to whether an abstract process is patentable.
The new USPTO guidelines attempt to delineate when a method is an abstract idea vs. a patentable process in light of Bilski. The guidelines suggest that the machine-or-transformation test should still be applied, but that it is only one non-determinative factor to consider. Many other factors are outlined in the guidelines, including generally: the specificity of the claims, whether there is a narrow field of application, and whether it is essentially an application of laws of nature.
The effect of the guidelines will be that §101 will no longer be an insurmountable hurdle for abstract method claims to climb. The guidelines are clear that §101 is “merely a coarse filter and thus a determination of eligibility under §101 is only a threshold question for patentability.” It is unclear exactly which types of claims Bilski will pave the way to patentability for, but certainly some business method patents will now be issued where the claims are specific and applied enough to not cast too wide a net. It may represent a lower burden for certain types of software and computer algorithms that don’t fit neatly into any of the §101 categories.