June 16, 2015 Articles

Supreme Court Resurrects Its Jurisprudence on Patentable Subject Matter

With the advent of business method patents and their increasing involvement of litigation, the exceptions to section 101 patentability are once again considered

By Chris Mitchell

The requirements of "novelty" and "nonobviousness," set out at 35 U.S.C. section 102 and 103 are widely recognized hurdles to patentability. They require any candidate for patent (as recited in the claims) to be, relative to the prior art, both "new" and "not obvious." But title 35 sets other bars to patentability, including the fundamental requirement that patents are restricted to "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." 35 U.S.C. § 101. Superficially, section 101 opens the doors wide for innovation. However, in a line of cases stretching back to at least 1853, the Supreme Court has carved out several exceptions to the patentable subject matter comprehended by section 101: laws of nature, natural phenomena, and abstract ideas. See, e.g., Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948); O'Reilly v. Morse, 56 U.S. (15 How.) 62 (1853); Le Roy v. Tatham, 55 U.S. (14 How.) 156 (1852).

Until the decision in Bilski v. Kappos, 561 U.S. 593 (2010), section 101 controversies before the Supreme Court had lain dormant for almost 30 years. But events have conspired to bring the issue back to the fore and caused the Supreme Court to wade in again to the issue of patentable subject matter.

The first is the advent of business method patents, the patentability of which, at least generally, was decided by the Federal Circuit Court of Appeals in State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998). Seemingly, the patentability of business methods was then codified by amendment of the Patent Act to specifically include a limited defense to the infringement of business method patents. 35 U.S.C. § 273 (surely section 273's reference to "business method patents" presupposes their existence?). But the existence of business method patents has not been well received by everyone; so the second contributing event has certainly been the figurative explosion in business method patents (since the State Street Bank decision, the U.S. Patent and Trademark Office (USPTO) has issued over 50,000 patents in the class given to "business methods") and their increasing involvement in litigation by so-called patent trolls.

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