In re Bilski -- "So You're Telling Me There is a Chance..."

While the initial reaction to In re Bilski was one of relief that the Court did not put an outright kabosh on business method patents, the reality may be that the majority opinion differs little in practical effect than the Stevens dissent.  In fact, the “hope” it leaves for protecting business methods reminds me a lot of one of my favorite “hope against hope” comedy scenes in “Dumb and Dumber” (Lloyd played by Jim Carrey and with Loren Holly as Mary):

In my estimation, any celebration for business method patent protection based on Bilski is about as misplaced as Loyd’s excitement to hear he had a one out of a million chance for a date.  In fact, the Court’s decision is far closer to the outright ban urged by Justice Stevens’ dissent than it is even a limited victory for business method patents.  In fact, by categorizing the claim in Bilski as an “abstract idea” the Court achieved something broader than a narrow ban on business method patents, as it also cast doubt on any claim, business method or not, that can be characterized as claiming something conceptual in nature that would “effectively grant a monopoly over an abstract idea” and additionally “preempt use of [risk hedging] … in all fields.” 

If we look again at the actual claim in question, we see a number of steps that do not appear “abstract” in the ordinary sense one might think of it.  In Merriam-Webster’s, “abstract” is defined as:

1 a : disassociated from any specific instance <an abstract entity> b : difficult to understand : abstruse <abstract problems> c : insufficiently factual : formal <possessed only an abstract right>

2 : expressing a quality apart from an object <the word poem is concrete, poetry is abstract>

3 a : dealing with a subject in its abstract aspects : theoretical <abstract science> b : impersonal, detached <the abstract compassion of a surgeon — Time>

4 : having only intrinsic form with little or no attempt at pictorial representation or narrative content <abstract painting> :

When we look at one of the Bilki claims, it is hard to see why it covers an “abstract idea.”  After all, it requires real people to perform real actions that result in real contractual obligations and real risk of capital, including:

a) performing a series of transactions between said commodity provider and consumers of said;

 b) identifying market participants for said commodity having a counter-risk position to said consumers; and

c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.

These claim steps define a process that is not easily seen to be  “disassociated from any specific instance”, “difficult to understand”, or “insufficiently factual.”  The claim recites a specific instance of hedging risk for commodities, is not difficult to understand and is not insufficiently factual, as it is certainly enabling.  Nor can I see how it is outside Section 101 because it “expresses a quality apart from an object.” Perhaps you could say it is expressed only in “intrinsic form with little or no attempt . . . at narrative context” but that doesn’t seem to be applicable either. 

That leaves only definition number 3 in play, i.e. that the Bilski claim “[deals] with a subject in its abstract aspects” only and therefore is not within Section 101.  But this leaves us with the question as to why the claimed process is considered abstract.  Perhaps it is because its steps primarily involve or are predicated on legalities of commercial transactions and contracts, and that these transactions and agreements by themselves are “abstract” in the sense that they exist only as conceptual constructs enforced by an agreement amoung men or citizens of a society, and have no existence outside of this abstract realm.  But then again, who really knows what the Court was thinking, as they did not provide any helpful logical analysis as to this crucial requirement of ruling a process inside or outside the realm of the abstract.

In the end, it was probably the great difficulty in defining what is or isn’t a “business method” that led the majority away from a rule that required such a definition. It is much easier to label a particular business method as an abstract idea than it is to define the universe of prohibited business methods.  Fortunately or unfortunately, depending on how you look at it, the Court has invited the Federal Circuit to attempt to provide such a definition:

“In searching for a limiting principle, this Court’s precedents on the unpatentability of abstract ideas provide useful tools. See infra, at 12–15. Indeed, if the Court of Appeals were to succeed in defining a narrower category or class of patent applications that claim to instruct how business should be conducted, and then rule that the category is unpatentable because, for instance, it represents an attempt to patent abstract ideas, this conclusion might well be in accord with controlling precedent. See ibid.  But beyond this or some other limitation consistentwith the statutory text, the Patent Act leaves open the possibility that there are at least some processes that can be fairly described as business methods that are within patentable subject matter under §101.””

Stay tuned for Bilski part II.

  Back to All Resources