Legal News

Fed. Circuit to Review Business Method Patents, Yeah Baby!

By Dan Slater

If you spot a patent partner doing backflips past your office this afternoon, turn to your office-mate and say, “Did you hear? The Federal Circuit decided to review business method patents!”

You’ll sound a bit dorky, but, hey, it’s patent law we’re talking about here, and, more importantly, you’ll be spot-on correct. Back in 1998, in a case called State Street Bank v. Signature Financial Group, the Federal Circuit opened the door to business method patents, which had until then been excluded from patent protection, by granting patent protection to a system for managing mutual fund accounts. The decision, according to its detractors, has led to the issuance of weak patents and exposed financial services companies to high-dollar litigation over business patent methods. Recently, the precedent has come under criticism from Justices Breyer and Kennedy, as well as Souter and Stevens.

Now, with the Federal Circuit’s announcement that it will review a case called Bilski, in which the patent claims cover a commodity trading strategy, critics of State Street are hopeful for a reversal. Click here for discussion of the case on the Patently-O blog.

To decode some of this patent-speak, the Law Blog called Wash., D.C.-based Jim Myers, of Ropes & Gray. Myers, who represented State Street, the losing party, in the 1998 case, told the Law Blog, “What we normally think of as a patent are things that are tangible objects, like Gore-tex, or a new pharmaceutical such as Lipitor. But in State Street, the Federal Circuit decided that you can’t prevent people from getting a patent by simply saying it’s a business method.”

Myers believes the patent claims presented in Bilski — which he refers to as an abstract mental process with no technology — offer the court a convenient opportunity to re-examine State Street.

Briefs in Bilski will be filed in March and April, and oral argument will occur in early May.

Full post as published by Law Blog - WSJ.com on February 19, 2008 (boomark / email).