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Supreme Court sidesteps software patent issue
Written by Daniel   
Monday, 28 June 2010 17:47

From C/Net News

Those hoping that the U.S. Supreme Court would limit the ability to patent software were disappointed by a ruling on Monday that didn't extend beyond striking down one particular patent.

The court ruled against patent applicants Bernard L. Bilski and Rand Warsaw (see PDF of ruling), who in 1997 had tried to patent a process for hedging investments, a process of countering one investment risk with another. The Patent Office rejected the patent, and the Supreme Court narrowly affirmed that decision.

The Bilski-Warsaw application is one example of a "business method," but the court didn't give any new guidance about which such processes would qualify as patented.

"The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The court, therefore, need not define further what constitutes a patentable 'process,' Justice Anthony Kennedy said, writing for the majority on the court.

"This is not the bright-line test anybody was hoping for," said Steven M. Bauer, an intellectual-property attorney and co-head of the Proskauer Patent Law Group. Instead, it will add another layer to every software patent case, requiring defendants to show their patents aren't abstract ideas, he said.

One matter in determining whether a process is patentable is whether it passes the so-called "machine-or-transformation test"; it can be patentable if "(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing," according a Court of Appeals ruling. But the Supreme Court said the machine-or-transformation test is not the sole means of determining whether a process is patentable.

Overall, the court declined to pin the matter down. Kennedy had this to say:


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