Wednesday, March 16, 2011

Samuelson & Schultz: What business methods are patentable after Bilski?

The final paper presented at Stanford's Bilski Symposium was "Clues" for Determining Whether Business and Service Innovations Are Unpatentable Abstract Ideas by Pamela Samuelson and Jason Schultz, both of Berkeley Law (though this paper looks like it is being published by the Lewis & Clark Law Review, not the Stanford Law Review). The paper discusses the "clues" in Bilski for "distinguish[ing] between unpatentable abstract ideas and patentable processes."

In Part I, Samuelson and Schultz note that "the term 'abstract idea' ... is not limited to very high-level abstractions," and they list a number of "clues" of unpatentability based on Bilski and the precedents it affirmed: "mathematical formulae and algorithms as such," methods that can be "carried out in a businessman's head," a "wide range of applications in which a claimed method could be practice," "processes that involve representing or transforming data from one form to another," and "insignificant post-solution activity" like "mere field of use limitations." The Supreme Court also described the machine-or-transformation test "as 'an important and useful clue' in patent subject matter determinations." Samuelson and Schultz further argue that the Constitution's Patent Clause and the history and structure of the Patent Act provide additional clues (abstract ideas do not promote the progress of the useful arts, and they were not part of the historical understanding of patents), but I'm not sure that these discussions really provide useful guidance for figuring out when an idea is too abstract.

Part II describes the standard public policy arguments against allowing broad patents on business methods (mostly that patents aren't needed to promote innovation in this area). Part III then argues that "a robust set of § 101 clues for abstractness can help improve patent quality and the efficiency of decision-makers" because "§ 101 is a 'threshold inquiry.'" Samuelson and Schultz note that "§ 101 determinations are made on the claim language alone and thus do not require extensive research into the state of the art," and they single out a patent application for "[a] method of directing funds to a charity" that "the PTO could easily and quickly reject" based on "the abstractness clues" from Part I. This last point—that § 101 rejections might be easier—is, to me, the most nonobvious suggestion in this article. But is it right? Recall that Lemley et al. "agree with a number of commentators that the right time to apply section 101 is as a backstop after all other validity doctrines have been examined." It would be interesting to hear what PTO examiners think about this.

Since this is the last of the symposium papers, here are links to my summaries of the other five papers for those who haven't been following along:
There were also practitioners on each panel at the symposium, but there aren't recordings from the panels (something to add next time?), so I can't comment on what they discussed. Thanks to the Stanford Law Review editors for putting together an interesting symposium!

1 comment:

  1. One symposium attendee just let me know that there are panel recordings available at the bottom of this site. Thanks!