• Federal Circuit Says Software Is Still Patentable
  • November 17, 2008 | Author: Christopher J. Rourk
  • Law Firm: Jackson Walker L.L.P. - Dallas Office
  • The United States Court of Appeals for the Federal Circuit has just issued its much anticipated en banc opinion for In re Bilski (Bilski), which generally affirms the patentability of certain software-implemented inventions and holds that the correct test for determining whether a claimed invention covers patentable subject matter is the "machine-or-transformation" test, relying on Gottschalk v. Benson, 409 U.S. 63 (1972) (Benson). Bilski partially overrules State Street Bank & Trust Co. v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. 1998), in particular, the holding in State Street Bank that the test for whether an invention is patentable subject matter is whether the invention creates "a useful, concrete, and tangible result."

    In its place, Bilski adopts a variant of the "machine-or-transformation test" of Benson, holding that subject matter is patentable if (1) it is tied to a particular machine or apparatus or (2) it transforms a particular article into a different state or thing.

    While rejecting a categorical prohibition on software patents, Bilski leaves unanswered questions regarding precisely what constitutes a patentable software-implemented process. In dicta, Bilski states that "a claim that purportedly lacks any 'physical steps' but is still tied to a machine or achieves an eligible transformation passes muster under ยง 101," allowing that software operating on a computer can be patentable subject matter, but further states that claims that would wholly pre-empt all uses of a "fundamental principle" (defined in footnote 5 of the slip opinion as meaning "laws of nature, natural phenomena, and abstract ideas") are not. Thus, claims drawn solely to a "fundamental principle" are not patentable subject matter even if they involve a machine or transformation, while a claim involving a "fundamental principle" that uses a particular machine or apparatus but that would not pre-empt other uses of the "fundamental principle" is patentable subject matter. In re Bilski acknowledged that this is a hard line to draw.

    Although Bilski confirms that software is generally patentable subject matter, the specific requirements for protecting software-implemented inventions are still uncertain. The decision of whether to file for patent protection on software-implemented inventions is not subject to as much uncertainty. Barring an unlikely radical change in the law by the Supreme Court, companies should not hesitate to seek patent protection for their software-implemented inventions.

    Further, while Bilski does not exclude software-implemented inventions from falling within the scope of patentable subject matter, it may still result in the invalidation of a large number of claims in pending applications and issued patents, such as ones that are drawn to inventions that do not meet the "machine-or-transformation" test. It is advisable to review important patent applications and patents to determine whether they require modification, such as by amending any pending claims or by filing a continuation or a reissue application, respectively. Asserted claims in pending litigation must also be analyzed in light of Bilski.