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Business Method Patents Down But Not Out Following Federal Circuit Bilski Decision

October 31, 2008

Rajiv Patel, a partner in the Intellectual Property Group with Fenwick & West, was recently quoted in two articles outlining the Bilski decision in which a federal appeals court ruled on the patentability of pure business methods. Patel was quoted in The Recorder article, "Pure Method, Pure Rubbish?" as well as the IP Law360 article, "Business Method Patents Down But Not Out."

In denying Bernard Bilski and Rand Warsaw's effort to patent a method for hedging risk in commodities trading, The Federal Circuit U.S. Court of Appeals ruled that pure business methods cannot be patented. The court concluded that an invention is patentable only if "it is tied to a particular machine" or it "transforms a particular article into a different state or thing."

The Recorder

Patel, a patent lawyer, said he's worried that the Bilski decision might actually swing the pendulum too far back the other way.

"My only concern or caution is, now having these decisions, that examiners and courts could take them to extremes and that there could be a chilling effect on innovation," Patel said.

IP Law360

It is unclear if the decision will be appealed, as many view that the current Supreme Court would be unlikely to reverse, even if it decided to grant certiorari, according to Patel.

"The court may wish to watch how the decision gets applied in the Patent Office and lower courts. One concern is having this decision be read too broadly so that a large array of software patents is undeservedly found to be unpatentable subject matter," Patel said.