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Sunday, 18 July 2010

Letter from AmeriKat I: Bilski, Baby! (Justice Stevens -On the Majority's musings and UK patent law)

A couple of weeks ago, the AmeriKat wrote about Justice Kennedy's majority opinion in the much-awaited Supreme Court case of Bilski v Kappos. A report on Justice Steven's epic concurring opinion was promised the following weekend, however, following a theatrical few weeks filled with a Greek tragedy, then a comedy of errors, several entrances of the Fates and a wonderful summer cold in the 87F London heat, the Letter from AmeriKat did not appear last week. (Picture, left - the AmeriKat enjoying a much needed cold drink following last weekends heatwave) However, the AmeriKat is back this week with the final two instalments of the Bilski decision. She has saved the best for last with the report on Justice Stevens epic 50-odd page judgment.

Justice Stevens Opinion

Justice Stevens is known for his critical view of the way in which the judiciary has expanded patent protection over the past several years. Interestingly, the sheer length of his concurring opinion seems to suggest it started its life out as the majority decision, but something happened along the way. Although both opinions arrived at the same outcome, Justice Stevens took quite a different approach to get there. He declined to make any broad statements about how to define the term "process" in Section 101 or the limits of what are unpatentable, abstract ideas. He instead based his reasoning upon historical and constitutional premises of patent law. As referred to in the first instalments, Justice Stevens was joined by the other liberals of the Supreme Court bench - Justice Ginsburg, Justice Breyer, and Justice Sotomayor. The AmeriKat has separated out the sections of his judgment under discrete headings to give some delineation to his reasoning.

"The Court's musings stand for very little"

Prior to turning to his reasoning of the case, Justice Stevens criticized Justice Kennedy's opinion as being "less than pellucid in more than one respect, and, if misunderstood, could result in confusion or upset settled areas of the law". He made three general observations about the majority decision, as follows:
  1. The Court suggested that the terms in the Patent Act should bear ordinary lay meanings of the term "process" rather than how they have been traditionally understood in the field of patent law. Justice Stevens commented that this is absurd because if one were to take this literally, anything that constitutes a "series of steps" would be patentable so long as they were novel, non-obvious and sufficiently particularized.
  2. Justice Stevens comments that Justice Kennedy's opinion uses language that seems inconsistent with the centuries-old reliance on the machine-or-transformation criteria as a clue to patentability (not a test). In particular, this is evident when the Court suggests that the test may operate differently when addressed to new technology.
  3. Justice Stevens states that it is not clear how the Court arrives at the decision that the Bilski patent is an abstract idea and thus not patentable. Justice Stevens cites that the court states that this determination is "clear" from the cases of Benson, Flook and Diehr, but Justice Stevens is clearly unsatisfied with such limited and underdeveloped reasoning. He is especially concerned because the Court appears to have artificially limited the Bilski patent claims to that just of 'hedging' and discounted the application's discussion of what type of data to use and how to analyze that data. "Why the Court does this is never made clear", writes Justice Stevens, "One might think that the Court's analysis means that any process that utilizes an abstract idea is itself an unpatentable, abstract idea. But we have never suggested any such rule, which would undermine a host of patentable processes." Although the majority opinion did recognize that the Bilski application was phrased broadly, this itself does not mean it is should therefore be constituted as unpatentable. Claim specification, wrote Justice Stevens, was determined by Section 112, not 101, and to invoke this reasoning at the 101 stage would itself be calling into question the Court's prior decisions. Concluding, he stated:
"The Court, in sum, never provides a satisfying account of what constitutes an unpatentable abstract idea. Indeed, the Court does not even explain if it is using the machine-or-transformation criteria. The Court essentially asserts its conclusion that petitioners' application claims an abstract idea. This mode of analysis (or lack thereof) may have led to the correct outcome in this case, but it also means that the Court's musings on the issue stand for very little."
These three broad criticisms and one final damning paragraph out of the way, Justice Stevens sped away into the main thrust of his argument.

Let's start at the beginning - Section 101

Justice Stevens (picture, right) agreed that the starting point was Section 101 which authorized four expansive categories of subject matter that may be patented: processes, machines, manufactures, and compositions of matter. All of these categories were of course conditional that none of these categories included a discovery (Kewanee Oil Co v Bicron Corp (1974)). The term process as defined by section 101(b) states that a process is a "process, art or method [that] includes anew use of a known process, machine, manufacture, composition of matter or material." This was of little use, wrote Justice Stevens, because the definition of process included the word "process" so it was itself circular. Lay speakers use the word "process" as meaning any series of steps. However, it is clear from cases such as Flook and Corning v Burden (1854), that the term "process" is not used in the ordinary sense of the word, but as itself accumulated a distinctive meaning in patent law. When the term was introduced in the 1952 Patent Act it was "not intended to nor understood to encompass any series of steps or any way to do any thing", wrote Justice Stevens.

The Government (aka USPTO) argued that looking for a definition of "process" in statute one is to look to the content of its neighbouring words and one can then also draw inferences from the fact that the other three categories (machine, manufacture, or composition of matter) are "all things made by man, and involve technology" and so, therefore, the definition "process" should follow a similar line. The Court rejected this submission because Section 100(b) already defined "process". Justice Stevens was not satisfied with either the Government's argument or the Court's reasoning here. Because the term "process" itself was defined with reference to the term "process" it was not sufficient to either "follow" a definition or, alternatively, rely on neighbouring words to understand the scope of an ambiguous term: "The definition itself contains the very ambiguous term we must define."

Justice Stevens said that although the Court, in interpreting "process" through its "ordinary, contemporary, common meaning", is a good approach to statutory interpretation in general, it is a "deeply flawed approach to a statute that relies on complex terms of art developed against a historical background." Citing a fun comparison, Justice Stevens said that if this approach to statutory interpretation was applied to the Sherman Act (anti-trust), it would prohibit "the entire body of private contract" (National Soc. of Professional Engineers v US (1978)). Applied to the 1952 Act, it would render Section 101 "almost comical" with a process of training a dog or a method of shooting a basketball as all being patent-eligible. (picture, left - Kobe coud be benefiting from a patent for shootings his 3-pointers) Justice Stevens concludes this section with the following two damning paragraphs (excerpts of which the AmeriKat has reproduced below):

"What is particularly incredible about the court's stated method of interpreting Section 101 is that the Court deviates from its own professed commitment to the "ordinary, contemporary, common meaning" approach by accepting a role for the "atextual" machine-or-transformation "clue" [as well as accepting] that we have "foreclose[d] a purely literal reading of Section 101" by holding that claims that are close to "laws of nature, natural phenomena, and abstract ideas" do not count as processes under Section 101. . . It is strange to thing that the very same term must be interpreted literally on some occasions, and in the light of its historical usage on others."
"In fact, the Court's understanding of Section 101 is even more remarkable because its willingness toe xclude general principles from the provision's reach is in tension with its apparent willingness to include steps for conducting business. The history of patent law contains strong norms against patenting these tow categories of subject matter. Both norms were persumably incorporated by Congress into teh Patent Act in 1952."
"A page of history is worth a volume of logic" - Justice Holmes

With the implied promise of a patent history lesson in his final paragraph of the previous section, Justice Stevens took the next 19 pages to give us a lesson in UK and US patent law history. His reason for doing so was because Section 101 did not "convey the scope of patentable processes" and thus the historical approach yielded a much more straight forward answer than the majority opinion's answer. He was cautious, however, not to place a monumental degree of weight and rigidity on the historical analysis because Section 101 was drafted to be "a dynamic provision deigned to encompass new an unforeseen inventions". In conducting his history lesson Justice Stevens commenced with a tale of two countries - England and the U.S.

English patent backdrop

The Patent Clause in the Constitution, like a several aspects of US IP law, was written against the backdrop of English patent practices and early American patent law was "largely based on and incorporated" features of the English patent system. The governing English statute at the time of the formulation of the Constitution was the Statute of Monopolies - a statute that responded to abuses of the Crown granting exclusive monopolies to court favorites.

However, the Statute had a carve-out which permitted grants of exclusive rights to the "working or making of any manner of new Manufacture" and as a result patents were issued for the "mode, method, or way of manufacturing." English courts subsequently construed the phrase "working or making of any manner of new manufactures" to include manufacturing processes. Although the extent to what different sorts of methods were patentable under the English law is unclear, there is nothing to suggest that in the context of the Statute of Monopolies that business methods could qualify. Although there were exceptional and rare cases of patents relating to lotteries or banking, most of these patents were not viewed as inventions or discoveries but "rather as special state privileges that until the mid-1800s were recorded alongside inventions in the patent records." Further, during the 17th and 18th centuries, Great Britain did see innovations in business and management organization and techniques, but few, if any, of these methods to conduct business were patentable. Given the rarity of the few types of business-method type inventions that did receive patents, Justice Stevens determined that is highly unlikely that the Framers of the Constitution knew of and had these types of 'patents' in mind when drafting the Patents Clause.

1 comment:

Anonymous said...

Epic? More like biased.

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