On June 28, 2010, the U.S. Supreme Court very tentatively expressed a well-caveated opinion. In Bilski v. Kappos, 561 U.S. __ (2010), the Court ruled narrowly that, in the context of the case, the financial practice of hedging was an abstract idea and therefore unpatentable. Fortunately or unfortunately, depending on one’s perspective, the Court did not provide much clarification regarding which processes were patentable, and which weren’t.
This website, patentsbyfrip.com, was established in 2008 to argue against the “anything under the sun” standard. The patent system arose at a time when inventions were primarily tangible things. But the nature of innovation has changed, and a primary agent of change has been the computer. It’s not called the Information Age for nothing. Both the importance and ease of innovation in various realms that are not quite tangible—concepts, processes, systems, methods, software, and the like—have increased significantly. Distinguishing mundane from meaningful innovation in these realms of the not quite tangible poses many difficulties.
The U.S. patent system has struggled with these difficulties. Following the State Street decision by the Court of Appeals for the Federal Circuit in 1998, the Patent Office, attempting to adhere to the court’s ruling, swung toward the extreme of no limits on what processes and other not quite tangibles could be patented. “Business methods” was a term applied to a broad, ill-defined field of not quite tangibles. Many applications for so-called business methods patents were routed within the Patent Office to a new patent classification field: Class 705.
Many business methods patents issued by the Patent Office in the years after 1998 were controversial. Briefly described processes and other not quite tangibles were criticized as attempts to patent the long-standing or obvious. Detailed described processes and other not quite tangibles were subject to the same criticism and in many cases to another criticism: as described, the alleged innovations were simply beyond comprehension, the words amounting to no more than gobbledygook.
Evidence of the controversial nature of business methods patents is that they have not received the same level of acceptance in the patent systems of many other nations as they have in the patent system of the United States.
This website has focused, and will continue to focus as the Patent Office attempts to interpret and adhere to the new Supreme Court pronouncement, on two types of arrangements that should not, in the website’s view, result in a patent. The arrangements are common in the 705 patent classification field. One is Data In-Data Out. Data is input into a manipulation system of some type—usually a computer or computers—the manipulation occurs, and data is output. The output may be little more than a score, a rating, or a recommendation. The alleged innovation may be no more than a sales forecast from past levels of sales. Or it may be a complex, multi-layered manipulation of many inputs. In either case, the basic form is the same: data in-data out.
A second not-deserving-of-a-patent arrangement found in the 705 classification field is more difficult to categorize. This type consists of alleged innovations that cause many observers with experience in the business and financial worlds to react with a “You’re Kidding, Right?” Some alleged innovations in this category are complex financial instruments that at a fundamental level are just common stock with bells and whistles. Should tweaking an ownership and investment means that has been around for several centuries produce something patentable?
The Supreme Court’s Bilski v. Kappos was the result of a review of an October 2008 decision by the Court of Appeals for the Federal Circuit, In Re Bilski. That decision promulgated a machine-or-transformation test that appeared to rein in business methods patents just a tad. The Patent Office’s application of In Re Bilski, however, did not result in clarity between what was and what was not patentable. Under the Supreme Court’s Bilski v. Kappos, the Patent Office’s difficulties will likely continue.
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