Bilski v. Kappos--Oral Argument

During oral argument for the Bilski case, the justices seemed to be seeking guidance on how to put forth a rule that excludes patents for business methods of the sort at issue but leaves open the possibility that a legitimate invention would be patentable even if it fell outside of the Federal Circuit’s machine-or-transformation test. In other words, how can patent-eligible subject matter be reigned in from the extremes the Court fears it can reach (horse training, teaching antitrust law, the alphabet) without cutting off some great invention of the future that does not rely on any machine or a transformation of matter? (E.g., JUSTICE SOTOMAYOR: “So help us with a test that doesn't go to the extreme the Federal Circuit did, which is to preclude any other items, something we held open explicitly in two other cases, so we would have to backtrack and say now we are ruling that we were wrong, and still get at something like this?”)

Another concern of the Court seemed to be the loophole in the machine test that was left unresolved in the proceedings below—whether simply having the otherwise ineligible process performed on a computer lifts an invention into patent eligibility. (E.g., CHIEF JUSTICE ROBERTS: “If you develop a process that says look to the historical averages of oil consumption over a certain period and divide it by 2, that process would not be patentable. But if you say use a calculator, then it -- then it is?”)

The Court seemed to, despite its efforts, lapse into conflating the issues of patent eligible subject matter and patentability based on novelty and nonobviousness, as some of the examples posited suggested. (E.g., JUSTICE KENNEDY: “But you know, the insurance industry -- the insurance business, as we know it, really began in England in 1680, when they discovered differential calculus, and they had expectancy and actuarial tables, actuarial for life, expectancy for shipping, and this really created a whole new industry. In your view, I think, clearly those would be patentable, the -- the explanation of how to compile an actuarial table and -- and apply it to risk. That certainly would be patentable under your view, and it's -- it's difficult for me to think that Congress would want to -- would have wanted to give only one person the capacity to issue insurance.”)

The Court seemed to be legitimately grappling with the issues, but one firm statement stood out: JUSTICE SOTOMAYOR: “No ruling in this case is going to change State Street.” It will be interesting to see if that holds true.