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High court considers what can qualify for a patent

WASHINGTON -- Should techniques for training horses be eligible for a patent? What about a system for choosing a jury or fail-proof method for speed dating?

Supreme Court justices raised the questions last week as they struggled to decide what types of inventions should qualify for patent protection.

In a case that has put software and bioscience companies on edge, the justices debated whether processes or methods of doing business should be eligible for protection. The dispute has raised serious questions about whether software programs, medical procedures, financial transactions and other nontangible inventions should be able to obtain patents like those granted to physical devices. And it left the high court grappling with the line between abstract processes and concrete applications.

Last Monday's oral arguments made clear that the justices are skeptical that the business method at the center of the case before them -- a process of hedging weather-related risk in energy prices -- deserves a patent. Some saw a risk in using the current case to set broad precedent on what can and cannot be patented.

The court's newest justice, Sonia Sotomayor, asked the lawyer defending the hedging application how the high court can limit patent protection to "something that is reasonable?"

In 1997, inventors Bernard Bilski and Rand Warsaw applied for a patent on a process that can be used by residential and commercial customers to lock in fixed energy bills, even during an unusually cold winter. The Patent Office concluded the process was too abstract and denied the application.

The U.S. Circuit Court of Appeals for the Federal Circuit upheld the Patent Office decision last year and said a process is eligible for a patent only if it is "tied to a particular machine or apparatus" or if it "transforms a particular article into a different state or thing." The circuit court said Bilski's process did not meet that test.

The question before the Supreme Court on Monday was whether the "machine-or-transformation" test is the right standard.

Michael Jakes, the attorney representing Bilski and Warsaw, told the high court that the test is too "rigid and narrow" and would exclude too many useful innovations in today's information-based economy, including his clients' hedging technique.

The justices, however, grilled Jakes about where the limits on patent eligibility should then lie. What if someone develops a unique, effective way of training horses? How about a method for speed dating, where a singles have quick conversation with a prospective date to see whether they have any chemistry? Justice Stephen Breyer asked whether he should be able to patent a process for teaching antitrust law.

Breyer said Jakes' logic taken to the extreme would leave room to patent just about any method for doing business. "Every successful businessman typically has something," Breyer said. "His firm wouldn't be successful if he didn't have anything that others didn't have... And your view would be ... anything that helps any businessman succeed is patentable?"

"Yes," Jakes replied.

Some justices also expressed concern that the machine-or-transformation test could make it difficult to obtain patents on software programs and other cutting-edge inventions typically patented as processes.

Malcolm Stewart, who argued in support of the test on behalf of the Obama administration, suggested that such inventions would still be able to qualify for patent protection if they are tied to a machine such as a computer. He added, however, "hard questions will arise down the road as to where do you draw the line" and urged the court not to use the current case to determine the patentability of software, medical diagnostic tests and other inventions typically patented as processes.

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