In Re Bilski: Limiting Business Method Patentability Would Serve as "Straitjacket" for Innovation

In the ever-evolving global economy, innovation in services and processes is essential to the United States' competitiveness. Yet that innovation is threatened by recent attempts to curtail patent protection for business methods.

In a brief for amicus curiae in support of the appellants, submitted April 3, 2008, to the U.S. Court of Appeals for the Federal Circuit in the case In re Bilski, Accenture underscores that efforts to limit the patentability of business methods would serve as a "straitjacket" to innovation. The Accenture brief illustrates such efforts are wrong according to the law, bad policy and bad for America.

History

Industrial engineering and management science - the foundation of business methods - has been a technical discipline, eligible for patenting, for more than 100 years. In fact, expertise in this technical discipline is specifically recognized by the U.S. Patent and Trademark Office (USPTO) in determining eligibility to take the patent bar exam and become a patent attorney.

Innovations in industrial engineering and management science have, for more than a century, been central to the United States' economic vitality and competitiveness.
Consider:

• Eli Whitney developed the first mass production system in 1798.
• Frederick W. Taylor pioneered rapid increases in productivity with the creation of his theory of "scientific management" in the late 1800s.
• The Gantt chart introduced a new method for planning and scheduling that revolutionized many business processes.
• Henry Ford brought the automobile to the mass market with innovation of the assembly line.

Unfortunately, in response to recent criticism of "trivial" patents that slipped out of the USPTO, such as one for a crust-less peanut butter sandwich and another for handing out automated lavatory tickets on airplanes, the USPTO has adopted a new position on what can be patented - a position that eliminates a whole class of innovations from protection -business methods that rely on humans for execution. The USPTO's solution to the poor quality of such trivial patent applications was to limit protection to ONLY those business processes that are implemented by machines or that physically transform something. Unfortunately, this approach makes innovative business methods that involve humans, rather than machine or computer implementations, a scapegoat for poor-quality patent applications in a number of other technology areas.

The Law and Precedent

The patent statute provides that "whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent . . . ." 35 U.S.C. § 101. And the U. S. Supreme Court has said that processes are patentable innovations, so long as they have a practical application that produces a useful result. Diamond v. Diehr, 450 U.S. 175 (1981).

In Diehr, the Supreme Court provided an appropriate framework for judging the patentability of all applications of human ingenuity including cutting-edge processes. In fact, the Supreme Court ruling distinguished between a practical application and an abstract principle, and thereby established a rational framework to review claims directed at business management processes.

Over the years, the U.S. Court of Appeals for the Federal Circuit has applied the Diehr test to evolving technical subject matter, such as a data processing system for managing a financial services configuration of a portfolio, a method for automatically routing interexchange calls in a telecommunications system, and a method for analyzing electrocardiograph signals to detect heart problems, among others.

The Diehr test can be applied to modern-day business-related processes just as it can to manufacturing processes.

The Supreme Court has never held, or even suggested, that a method involving human instrumentalities is not patentable. Indeed, the Supreme Court has stated that it "cannot be disputed" that "a process may be patentable, irrespective of the particular form of the instrumentalities used. Cochrane v. Deener, 94 U.S. 780, 787 (1877). Multiple such rulings by the Supreme Court have reinforced this message.

The Congress has affirmatively recognized the patentability of business methods. In fact, the patent statute expressly recognizes patent protection for business methods. When revising the patent statute in 1999, Congress legislatively acknowledged the patentability of methods of "doing or conducting business," and far from disputing that result or overruling that result, instead enacted a prior user defense to infringement of such patents. Indeed, since then Congress has had further opportunities to legislate stringent restrictions on business method patents but has declined to do so. With clear congressional intent that patent protection does and should extend to methods of conducting business, it would be a mistake for any court to hold otherwise. As the Supreme Court has held, the settled expectations of inventors must be respected and maintained in the absence of a clear Congressional mandate to the contrary.

Conclusion

The U.S. Court of Appeals for the Federal Circuit should apply the Diehr standard for statutory subject matter to business processes; it should not adopt a test that requires a physical transformation or any tie to a machine.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world's most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. With 178,000 people in 49 countries, the company generated net revenues of US$19.70 billion for the fiscal year ended Aug. 31, 2007. Its home page is www.accenture.com.