On February 16, the CAFC agreed to rehear In re Bilski en banc – a hearing in front of all 12 active judges – in response to Bernard Bilski’s appeal from a rejection by the USPTO’s Patent Board of Appeals (BPAI).
The patent application at issue in the case relates to a mathematical algorithm governing a method practised by a commodity provider for hedging weather-related risks associated with a commodity sold at a fixed price.
Amicus briefs in support of the appellants, Bernard Bilski and Rand Warsaw, were filed by parties including the American Intellectual Property Law Association (AIPLA), Koninklijke Philips Electronics, the Washington State Patent Law Association, American Express and Accenture.
Supporting the director of the USPTO, Jon Dudas, were briefs written by the American Civil Liberties Union (ACLU), a non-partisan group that advocates on behalf of constitutional rights and freedoms, the End Software Patents project (ESP), a group that opposes the patentability of computer software, a combined brief authored by Yahoo! and Professor Robert Merges, Red Hat and the American Institute of Certified Public Accountants.
Several briefs also were filed in support of neither party, including ones by IBM and the Intellectual Property Owners Association.
The CAFC will consider five questions in its en banc rehearing, most of which relate to Section 101 of the US patent code, which defines the parameters for patentable subject matter.
The CAFC will also ask whether it is appropriate to reconsider State Street Bank & Trust Co v Signature Financial Group Inc (which opened the door to business method patents in the US) and AT&T Corp v Excel Communications, Inc (which eliminated the requirement of physical elements or limitations for process claims) in this case and, if so, whether those cases should be overruled in any respect.
The decision to rehear the case en banc, rather than simply to issue an opinion on the matter, represents a significant sua sponte (or spontaneous and independent) action on the part of the CAFC.
Pavan Agarwal of Foley & Lardner said that the case could affect “more than just business method patents,” including industries such as software and even biotechnology – and that determining what is patentable will have a “huge impact on the economy,” since the number of players that have become interested in patents over the years has grown exponentially.
Foley partner C Edward Polk, who once served as associate solicitor for the USPTO, said that those associations and companies whose amicus briefs favour a broad standard of patentability include AIPLA and Accenture, while groups such as End Software Patents argue that overturning the USPTO’s decision in this case would be detrimental to innovation and to the economy.
Meanwhile, the ACLU argues that granting patents on abstract ideas is a violation of the First Amendment, which guarantees free speech.
Although Agarwal and Polk would not conjecture as to whether the case would make it to the Supreme Court, they said that there are some key differences between Bilski and State Street, in which the US’s highest court refused to hear the case by denying certiorari: “There are far more business method patents now because of State Street,” said Polk. “It could be a situation where the Court agrees to hear the case simply because it’s more of an issue now,” he said.
In recent years, the Supreme Court has developed a reputation for disagreeing with a number of key CAFC rulings in patent cases, and some have speculated that this might affect the CAFC’s decision in this case. But Polk said that, based on his experience of the CAFC judges, he believed they would apply the law as they understand it to the facts of the case, rather than simply issuing an opinion that the Supreme Court might agree with.
Oral arguments are scheduled for May 8. Agarwal said to “expect a packed courtroom”.
