Argument Day in Bilski at US Supreme Court

Later today the United States Supreme Court will hear oral arguments in the Bilski matter. It is not an overstatement to say that the fate of much future innovation rests squarely on the Supreme Court getting this one right, so lets hope for the best and pray that they do get this one right. There is every reason to believe that the Supreme Court will accurately and appropriately reach a sensible decision relative to patentable subject matter, but there is also at least some fear that they may get it wrong, and wrong to the point where vast amounts of innovation will cease, stall and simply never develop. Because the Federal Circuit as a whole sitting en banc decided not to demonstrate judicial restraint and completely ignored long standing judicial principles associated with answering only the limited questions presented by the case, far more was said in Bilski than necessary, and it is safe to say that those in the majority in the CAFC Bilski decision could never have known the extent of the fall-out caused by opening a patentable subject matter Pandora’s Box. But that is precisely why judges are not supposed to be activist, why they are supposed to undertake a conservative approach and only decide the narrow question before them. Too bad the majority of the CAFC missed those days in law school classes where we all cursed the Supreme Court for not addressing the issue of social importance and instead decided some narrow, inconsequential issue or simply punted it back to the lower courts as a result of some technical matter.  Had they not maybe they would have known to stick to the issue at hand.

In a short, sweet and to the point dissent Judge Rader of the Federal Circuit said virtually all that needs to be said about Bilski. Rader explained:

This court labors for page after page, paragraph after paragraph, explanation after explanation to say what could have been said in a single sentence: “Because Bilski claims merely an abstract idea, this court affirms the Board’s rejection.”

Of course that is not what the majority of the Federal Circuit did.  Instead they seemed to dust off an opinion that had been previously written to be unveiled when the time was right, regardless of the facts of the case.  That is really the only way to explain why they didn’t address the single issue presented by the Bilski patent application, but rather opined about methods in general and issued a decision that didn’t even really deal with business methods, although it certainly dealt with software, medical process inventions and biotechnology innovations, which were not even at issue.  Judge Mayer, also in dissent lamented the fact that the Court didn’t address business methods and made matters only worse.

If you are going to read only one of the briefs in this case I would strongly recommend the Medtronic amicus brief, which was filed in support of neither party.  Medtronic explains at the outset:

The requirement that a process must be tied to a particular machine or apparatus, or must transform a particular article into a different state or thing to be eligible for patenting under 35 U.S.C. § 101 would adversely affect medical technology innovation. The machine-or-transformation requirement would preclude the patenting of significant advances in medical research and development, diagnosis, prevention, and treatment. Without the full range of incentives of patent exclusivity, medical innovation will suffer the loss of investment and a retreat into secrecy, the very harms the patent laws were enacted to guard against. Moreover, impeding the patenting of medical breakthroughs jeopardizes public health goals, including affordable universal access, by deterring the invention and public disclosure of competitive medical technology. The machine-or-transformation requirement is therefore inappropriate and should be discarded.

But how could a case about a pure business method where one things of something, realizes a solution and then implements the solution call into question medical technology?  Well that is a very good question indeed, and exactly why the majority of the Federal Circuit simply ignored their Constitutional role in government to decide issues.  Instead the CAFC decided they would make law, re-writing something so fundamental as patentable subject matter.  Truly embarrassing.  If they were in my law school class the judges in the majority would have received an “F” for their decision.  You simply cannot award any points for an essay, or a judicial decision, when it doesn’t answer the question presented and gets what is set forth so horribly wrong.  You don’t get to write about what you want on an exam, and you shouldn’t get to write what you want just because you have been confirmed by Congress!

Much of the Medtronic brief is devoted to explaining what the company does, some of the key medical innovations created by the company, why these innovations have helped improve the quality of health care for real people, and what technologies they will no longer be able to seek patent protection for, which will all but certainly lead to less medical innovation, which is hardly good for society.  While the ACLU and others who do not think diagnostic methods are worthy of patenting, Medtronic makes the following extraordinarily compelling argument: The Medtronic brief goes on to explain:

In the context of medical technology, the proper evaluation and effective treatment of patients depend upon complex correlations assessed over prescribed times. This, in turn, relies upon the generation of predictive models from a comparison of an individual patient’s signs and symptoms against a database of studied human wellness parameters, which contain patterns of diagnosis, chosen treatment, and outcome. These efforts are far from trivial.

At the start of the next section of the brief Medtronic brings home the point — if you cannot diagnose the problem you cannot treat the problem, and treatment advances are typically predated by diagnosis advances.  Specifically Medtronic says:

Under the Bilski test, a method of diagnosis unaccompanied by a medical device or treatment step would be patent ineligible. However, the development of a diagnostic test almost always precedes the ability to treat the disease and is often a distinct research enterprise separated by years, if not decades.

Medtronic leads up to concluding (although this appears in the paragraph right before the one labeled “Conclusion”):

The Court of Appeals decision in Bilski opens the door to the use of Section 101 as an instrument for determining precisely what innovation will be acceptable. In Chakrabarty, this Court took the wise approach of interpreting Section 101 as broadly inclusive in favor of allowing the other statutory conditions for patentability to more finely monitor what inventions may be patented vis-à-vis the prior art. A Section 101 that embraces inclusiveness ensures continuing innovation in new as well as old fields of technology. Tinkering with Section 101 in hopes of crafting a standard generally applicable to past, present, and future technologies, however well intentioned, may bring unforeseeable consequences, including the unfortunate chilling of future innovation.

This very point was the central focus of the dissent of Judge Newman, who explained in the opening paragraph of her dissent:

The court thus excludes many of the kinds of inventions that apply today’s electronic and photonic technologies, as well as other processes that handle data and information in novel ways. Such processes have long been patent eligible, and contribute to the vigor and variety of today’s Information Age. This exclusion of process inventions is contrary to statute, contrary to precedent, and a negation of the constitutional mandate. Its impact on the future, as well as on the thousands of patents already granted, is unknown.

And ended her dissent by saying:

It is antithetical to this incentive to restrict eligibility for patenting to what has been done in the past, and to foreclose what might be done in the future.

There is indeed much at stake in Bilski, and far more than just business method patents. Thankfully, in the past when the Supreme Court has taken patent decisions and Judge Newman has authored a dissent the Supreme Court has looked to her dissent and found in it wisdom that was adopted. The Supreme Court would do well to read the dissents of Judges Rader and Newman, weave them together, add mention of 35 USC 273, which the majority of the CAFC ignored but which demonstrates Congress must have known about business method patents because they specifically created a defense to infringement charges rather than preclude them altogether.

So what is the fear that the Supreme Court will do the wrong thing? Well, on the good side is the truth that anything made by man under the sun is patentable, and the Supreme Court never has deviated from that since 1952, always erring on the side of finding more patentable subject matter, save one situation. That one situation was Gottschalk v. Benson, which was a case dealing with a computer method. I think society, including the Supreme Court, has grown to the point where computers will be viewed as important tools. So I don’t worry about the Supreme Court uttering the nonsense it did in Gottschalk v. Benson when it said the method involved had no substantial practical application except in connection with a digital computer, which they then believed meant the method shouldn’t be possible. Yes, we are long past believing methods associated with digital computers are inconsequential, but do a bunch of elderly, sequestered jurists know just how important this case is? I sure hope so, and I sure hope they once again sing the praises of patentable subject matter.

I will be in the courtroom for the Bilski oral argument and will be reporting about the events as soon after the argument is completed as possible.  Check back later today for reports and early analysis, and join me, John White, Scott Alter and Douglas Nemec for a PLI Hot Topic Briefing on Wednesday, November 11, 2009 at 1pm ET for a webcast audio briefing.  This briefing will be available for free for any in the media who would like to join.  Media members interested should send an e-mail request to [email protected]. Your full contact information including mailing address and publication information is needed for approval.