This post comes more than a week after the Supreme Court decided Bilski. Last Monday when the decision came down I was struggling with what value I could add to the many reports that would fill the intellectual property blogosphere, and was leaning towards waiting a few days (which also allowed me to deal with various client commitments and new opportunities). Then a good friend praised me for being the lone IP blog who had not said a word about Bilski on the day of the decision, after receiving an email of the blog’s content for the day. That comment cemented it for me. I decided to give myself some time to think about the decision before posting here. Of course, that means that much of what can be said already has been. So, links to many excellent commentaries are below.
At its heart, the Bilski decision continues the Supreme Court’s patent law trend moving away from bright line rules and allowing the flexibility to adapt the law to future situations. The business method in Bilski was struck down, but the Court did not strike down all business methods. And the justices made clear that the machine-or-transformation test was not the only option for determining patentability, increasing the law’s flexibility even more. Having preserved at least some business methods, the Court obviously left software patents intact as well. So, Bilski was not the death of business methods or software. And just as after KSR (obviousness) and eBay (injunction standard), the decision injects uncertainty into the law that will take 18 – 24 months to sort out, first in the district courts and then more slowly in the Federal Circuit. The one thing you can be sure of is that you will see lots of Bilski-based motions over the next year. And I am sure I will be writing about Northern District Bilski decisions during that time.
Here is some of the commentary from across the blogosphere:
* 271 Patent Blog;
* Chisum’s Notes on Bilski;
* Filewrapper (noting that the Supreme Court issued grant, vacate and remand orders in two business method cases assuring we will get some realtively quick Federal Circuit guidance on the outlines of Bilski);
* IPWatchdog (arguing, among other things, that even in the post-Bilski world one could write claims that would capture Bilski innovation);
* New York Times Bits Blog (looking at the uncertainty the decision injects into litigation);
* Patent Docs (looking at Bilski’s impact upon biotech patents);
* Patently-O (and here, here, here and here); and
* WSJ Law Blog.

Continue Reading Bislki: More of the Same

The Supreme Court heard oral argument in the Bilski case Monday afternoon. Click here for a transcript of the arguments. Here are a few of the highlights from Bilski’s argument:
JUSTICE GINSBURG: But you say you would say tax avoidance methods are covered, just as the process here is covered. So an estate plan, tax avoidance, how to resist a corporate takeover, how to choose a jury, all of those are patentable?
MR. JAKES: They are eligible for patenting as processes, assuming they meet the other statutory requirements.
JUSTICE BREYER: So that would mean that every — every businessman — perhaps not every, but every successful businessman typically has something. His firm wouldn’t be successful if he didn’t have anything that others didn’t have. He thinks of a new way to organize. He thinks of a new thing to say on the telephone. He thinks of something. That’s how he made his money.
And your view would be — and it’s new, too, and it’s useful, made him a fortune — anything that helps any businessman succeed is patentable because we reduce it to a number of steps, explain it in general terms, file our application, granted?
MR. JAKES: It is potentially patentable, yes.
* * *
JUSTICE BREYER: So you are going to answer this question yes. You know, I have a great, wonderful, really original method of teaching antitrust law, and it kept 80 percent of the students awake. They learned things – (Laughter.)
JUSTICE BREYER: It was fabulous. And I could probably have reduced it to a set of steps and other teachers could have followed it. That you are going to say is patentable, too?
MR. JAKES: Potentially.
And here are some of the highlights from the government’s argument:
JUSTICE SOTOMAYOR: No ruling in this case is going to change State Street. It wasn’t looking at process or the meaning of “process.” It was looking at something else.
* * *
CHIEF JUSTICE ROBERTS: Mr. Stewart, I thought I understood your argument up until the very last footnote in your brief. And you say this is not –simply the method isn’t patentable because it doesn’t involve a machine. But then you say but it might be if you use a computer to identify the parties that you are setting a price between and if you used a microprocessor to calculate the price. That’s like saying if you use a typewriter to type out the — the process then it is patentable. I — I — it — that takes away everything that you spent 53 pages establishing.
* * *
CHIEF JUSTICE ROBERTS: But if you look at your footnote, that involves the most tangential and insignificant use of a machine. And yet you say that might be enough to take something from patentability to not patentable.
MR. STEWART: And all we’ve said is that it might be enough; that is, hard questions will arise down the road as to where do you draw the line, to what extent must the machine or the transformation be central —
CHIEF JUSTICE ROBERTS: So you think it’s a hard question. If you develop a process that says look to the historical averages of oil consumption over a certain period and divide it by 2, that process would not be patentable. But if you say use a calculator, then it — then it is?
MR. STEWART: I think if it’s simply using a calculator for its preexisting functionality to crunch numbers, very likely that would not be enough. But what we see in some analogous areas is that the computer will be programmed with new software, it will be given functionality it didn’t have before in order to allow it to perform a series of calculations, and that gets closer to the line. And again —
CHIEF JUSTICE ROBERTS: Well, your footnote — I don’t mean to dwell on it — it says to identify counterparties to the transactions. So that if what you’re trying to get is the — the baker who sells bread, because you are going to hook him up with the grocer who sells, you know, in the grocery store, if you punched in in your search station, you know, give me all the bakers in Washington, that would make it patentable?
MR. STEWART: Again, we are — we are not saying it would be patent eligible. We would have to review those facts, and the PTO would have to review those facts in the context of an actual application.
I guess the point I’m trying to make is simply that we don’t want the Court, for instance, in the area of software innovations or medical diagnostic techniques to be trying to use this case as the vehicle for identifying the circumstances in which innovations of that sort would and would not be patent eligible, because the case really doesn’t present any — any question regarding those technologies. And therefore, we —
If those highlights, left you wanting more, check out the following posts that give some additional context to the cold transcript or read the tea leaves, as we all wait for a decision, likely this spring:
271 Patent Blog
IPWatchdog (and here)
Patent Docs
Patently-O (and here)
The Prior Art
WSJ Law Blog

Continue Reading Bilski: Reading the Tea Leaves

Earlier today, the Supreme Court granted cert in Bilski, the Federal Circuit’s en banc decision limiting the patentability of business method and software patents. Many commentators are predicting that the Supreme Court will further restrict business method and software claims through the machine or transformation test, although it is hard to imagine that either type of claim will be completely eliminated. Of course, the Supreme Court could also move the law back toward the State Street decision allowing business methods and software to be patented more freely. The questions presented are:
Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”
Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. § 273.
For more takes on the cert decision and its implications, check out:
271 Patent Blog;
IPWatchdog;
Patently-O;
SCOTUS Blog; and
WSJ Law Blog.

Continue Reading Supreme Court Grants Cert in BIlski

It appears that some lawyers are trying to bring their business casual office style into the courtroom, and Illinois judges do not like it. Yesterday, the Wall Street Journal Law Blog reported that a panel of Illinois judges, including Northern District Judges, at the Seventh Circuit Bar conference agreed that attorneys are appearing in court wearing inappropriate clothing, including themed-ties and clothes that would be appropriate for the gym — click here to read the story.
Many will dismiss this story as fluff, but it is not. How you dress is an important element of your first impression on the court, just like it is in any social interaction. As a federal law clerk, I learned three things about the impact of a lawyer’s clothing choices: 1) judges care how you dress; 2) jurors care also; and 3) simple things go a long way. One of the first insights I received from my judge was to always button your coat when you stand up in court.* I confess that I thought it was a minor point and I could not imagine that anyone noticed an unbuttoned coat. But that changed when we spoke with a jury after a case weeks later, and one of the jurors mentioned that it bothered him that one of the trial attorneys did not button his coat. He felt it was sloppy and disrespectful.
Finally, in defense of Chicago lawyers this Chicago lawyer is in the running for Esquire’s best dressed man of 2009. And if this post makes you think about a new suit, I highly recommend Richard Bennett Custom Tailors.

Continue Reading Dig the Suits Out of Your Closet Counselor

Last week the Northern District of Illinois became the first federal court to allow complete online registration and payment for attorney admission — click here to read the Clerk’s press release. You can now register for both the general and trial bars online and pay the registration fees by credit card. This is another step toward getting the federal courts fully online, now if they could only end PACER access fees.

Continue Reading Northern District Pioneers Full Online Attorney Registration

Here are several IP posts that you should check out:
* The MTTLR Blog’s Lauren Strandbergh has an interesting post (click here for it) about the implications of the Google Book’s settlement and how the Book Rights Registry — a Copyright Clearance Center or ASCAP-like entity that will, among other things, distribute proceeds from out-of-print books to the authors or rights holders — will change the publishing industry. Strandbergh raises the right questions, but we will only get answers as we ee how the system works.
[UPDATE:] Speaking of the Copyright Clearance Center and ASCAP, the WSJ Law Blog has a post today (click here to read it) based upon this WSJ story (subscription required for the full text) about two new companies that are aggregating patents and guaranteeing never to assert those patents against their members. It is not clear from the story if they plan to assert them against non-members, but it is an interesting move in the struggle between non-practicing entities and corporations that feel targeted by patent litigation. I believe there have been industry-specific versions of these companies in Europe for some time. As I understand some of those entities, the do assert their patents against non-members to help fund operations.
* Victoria Pynchon offers advice for dealing with those uncomfortable Thanksgiving political conversations with family and friends at her Settle It Now Negotiation blog — click here to read it. The advice translates well for unwinable conversations with opposing counsel.
* This week’s Blawg Review is up at LawyerCasting — click here to read it. It provides lots of advice for lawyers dealing with the tough economic times.

Continue Reading IP News & Advice — Thanksgiving Edition

Here are some IP stories that will give you weekend reading and viewing:
* UCLA Professor Doug Lichtman launched the IP Colloquium, a series of podcasts focused on the most pressing IP issues of the day. Lichtman tells me he aspires for the IP Colloquium to become National Public Radio for IP lawyers. Lichtman is well on his way. In his first episode, Lichtman discusses copyright issue with the Electronic Frontier Foundation’s Fred von Lohmann. And if the content is not enough, Lichtman has also secured CLE credit in several states.
* IPTABlog has a comprehensive post — click here to read it — on Google’s settlement with the Association of American Publishers over the Google Book Search. The post links to much of the media coverage, as well as the settlement agreement. Also, check out the WSJ Law Blog’s post on the settlement’s impact on related cases (click here to read it) and Madisonian’s take on the issues springing from the settlement (click here to read that post).

Continue Reading IP Legal News

In re Bilski, __ F.3d __ (Fed. Cir. 2008) (en banc).*
Chief Judge Michel, writing for a nine judge majority, affirmed the Board of Patent Appeals and Interferences’ finding that Bilski’s invention — a commodities trading method for hedging risks — did not meet the 35 U.S.C. § 101 patentable subject matter requirement. The Federal Circuit overturned State Street’s “useful, concrete, and tangible result” test as insufficient to determine patentability. The Federal Circuit held that the Supreme Court’s “machine-or-transformation” test was the only test for determining patentability:
A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.
I found Judge Dyk’s concurrence tracing the history of the “machine-or-transformation” test back to the Patent Act of 1793 especially interesting:
In fact, the unpatentability of processes not involving manufactures, machines, or compositions of matter has been firmly embedded in the statute since the time of the Patent Act of 1793, ch. 11, 1 Stat. 318 (1793).
As with any major appellate decision, we will need eighteen to twenty four months of district court and Federal Circuit decisions to flesh out and fully understand Bilski’s implications. While we argue those cases and await the decisions, there will be plenty of law review and blog analysis. Here are some of the first (I will update with additional posts as they come):**
* 271 Patent Blog (glad to see Peter Zura back in the blogosphere);
* IP ADR Blog;
* Likelihood of Confusion;
* Patent Baristas;
* Patently-O (with Crouch’s usual, in-depth analysis);
* The University of Chicago Law Faculty Blog (Randy Picker has an exceptionally detailed take on the opinion); and
* WSJ Law Blog (saying experts are torn as to whether Bilski will make it to the Supreme Court).
* Click here for the opinion.
** I have updated the list of Bilski blog posts with some new ones.

Continue Reading Bilski: Some Business Method & Software Patents Survive

Nike, Inc. v. Wal-Mart Stores, Inc., No. 08 C 5840 (N.D. Ill.) (Hibbler, J.).

As I have said before, I generally do not discuss complaints, but Nike’s design patent suit against Wal-Mart last week has drawn significant blog coverage  — click here for the complaint.  And most of that coverage has missed the most interesting element of the complaint, from a legal procedure perspective (and yes, legal procedure is interesting, at least to me):  Nike’s detailed pleadings.  Instead of simply identifying its design patents (related to its Nike Shox product line) and Wal-Mart’s allegedly infringing shoes, Nike put detailed design patent claim charts in its complaint showing an accused product from the same angle as each figure in the design patent.  Here is a portion of one of the charts:


Continue Reading Nike v. Wal-Mart: Complaint May Show Future of Twombly Pleading

Here are several stories worth checking out, but that did not warrant a separate post:
PA Tracer’s monthly patent filings report is out. The Northern District had nine new cases filed in July. That is reasonably busy for the deep summer, but nothing compared to the Eastern District of Texas’s 25 new patent cases — click here to read PA Tracer’s post.
The St. Louis Post-Dispatch ran a story recently about on Judge St. Eve — click here to read it.* The story discusses many traits that are obvious to those who have practiced before her. Judge St. Eve is very punctual and efficient, and she has absolute control of her courtroom, which she maintains with a civility and kindness that are impressive. The article also speculates, using unnamed colleagues and media as sources, that Judge St. Eve will eventually be on Supreme Court short lists. Here’s hoping she stays in the Northern District a long time before getting called up to One First Street.
Chicago Lawyer Magazine did a nice profile on Chicago IP lawyer Carol Genis of Bell, Boyd & Lloyd. Click here to read it. The article largely focuses on how Genis develops strong bonds of trust and friendship with clients.
Duane Valz, Vice President & Associate General Counsel of Yahoo!’s Global Patent Strategy, is discussing approaches for patenting Internet-related ideas in a webinar on Wednesday, September 3 from 1:30 – 3:00 CT — click here for more information.
* Hat tip to the WSJ Law Blog for pointing out the story here.

Continue Reading IP Legal News