Patent Law

Federal Circuit to Consider Patents for Business Methods Today

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The U.S. Court of Appeals for the Federal Circuit will consider a case today that will help determine what kinds of business methods are eligible for patents.

The case, In re Bilski, asks whether a patent can be issued for a method used by a commodity provider to manage the risk of bad weather, report Forbes and the Patently-O blog. The method helps smooth out fuel bills for consumers, Reuters reports.

The decision is expected to help clarify the circuit’s 1998 decision on business methods, State Street Bank & Trust Co. v. Signature Financial Group Inc., which said processes could be patented as long as they produced useful, concrete and tangible results. The case allowed a financial group to patent a process for managing a portfolio of mutual funds.

In Bilski, the big question before the en banc Federal Circuit is this one: What standard should govern business-method patents? That’s the assessment of patent litigator Daniel Crowe of Bryan Cave, who spoke to the Wall Street Journal Law Blog.

The risk management process in Bilski does not require computer hardware or any kind of machine to carry it out. The court may consider whether the process meets the test established in State Street, or whether the State Street test needs refinement, Crowe said.

The case is being closely watched by companies that use business method patents, the Reuters story says. The U.S. Patent and Trademark Office issued 1,330 business method patents last year, up from 120 in 1997, the story says.

Recent decisions by the Federal Circuit and the U.S. Supreme Court have scaled back the rights of patent holders, the ABA Journal reports in a February feature, “Reinventing Patent Law.”

Patent litigator Don Martens notes the trend. “There’s a perception in the Supreme Court, Congress and the IT industry particularly—although in other industries as well—that the pendulum has swung too far in the direction of [protecting] patents in case law, and we are seeing a reaction to that,” he told the Journal.

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