The U.S. Supreme Court on Monday set the stage for a landmark decision on the patentability of 21st century creations from software to biotech -- an issue on which Supreme Court nominee Sonia Sotomayor could make a significant difference if confirmed.
Justices agreed to review the case Bilski v. Doll, a challenge to a ruling last fall by the U.S. Court of Appeals for the Federal Circuit that narrowed the patentability of so-called "business methods," shorthand for a broad range of processes not tied to manufacturing.
The case will be argued and decided in the Court's next term, when Sotomayor may be in place on the Court instead of Justice David Souter.
That prospect led several intellectual property experts to predict that the new lineup could make a marked difference in the outcome of the case.
"It's got to be a shift from Souter, who was hostile to broad patenting," said Edward Reines of Weil, Gotshal & Manges. Reines pointed to a dissent Souter joined in 2006 when the majority dismissed the case Laboratory Corp. of America v. Metabolite as improvidently granted. That case involved a patent for a diagnostic method based on a "basic scientific relationship." Justice Stephen Breyer wrote the dissent from dismissal that Souter joined, asserting that patent protection in such cases can "severely interfere with, or discourage, development and the further spread of useful knowledge itself."
For her part Sotomayor had extensive experience in private practice at Pavia & Harcourt in New York defending intellectual property rights, noted Randy Lipsitz of Kramer Levin Naftalis & Frankel. "She started as a trademark litigator" for clients in the fashion industry, leaving her with at least a strong interest in intellectual property cases.
As a district court judge in 1997 she ruled in Tasini v. New York Times for the print publishers in a copyright dispute with freelancers. The Supreme Court ultimately ruled against the publishers.
Interestingly, Sotomayor's ex-husband Kevin Noonan, a partner at the Chicago firm McDonnell Boehnen Hulbert & Berghoff, is a critic of the Federal Circuit's Bilski ruling. On the Patent Docs blog, he wrote in January that Bilski is "spreading like a stain" to mar a broad range of patents.
The case before the Court began in 1997 when plaintiff Bernard Bilski sought a patent for a method of predicting and hedging risk in commodities trading. The Federal Circuit rejected the claim because the inventor did not show that the method "is tied to a particular machine or ... transforms an article."
The ruling was a dramatic shift from earlier precedents that had led to more patents for such intangible business methods.
In the months since the Bilski ruling, more business methods patent have been rejected by the U.S. Patent and Trademark Office, and lower courts have ruled against patent holders.
As a result, the high court's review could have broad impact in the Internet era, said Stuart Meyer of Fenwick & West in Mountain View, Calif. "Unlike during the Industrial Revolution, many of today's inventions would not hurt if you dropped them on your foot. Hopefully, the Supreme Court will consider the nature of modern innovations in deciding the scope of patentable subject matter."
Reines predicted "a record number of amicus curiae briefs" in the case as biotech, computer software, medical diagnostics and other industries seek to alert the Court to the impact of the case.
When Bilski first petitioned in the Court in January, several experts predicted the Court would not grant review, because the Federal Circuit appeared to be following the recent Supreme Court trend of narrowing the scope of patents. But the Court appears to have decided either that the circuit went too far, or that the issue is of such magnitude that the justices had to intervene.
"The Supreme Court is clearly interested in shaping the boundaries of what subject matter is eligible for patent protection," said Pavan Agarwal, a partner in Foley & Lardner's Washington, D.C., office.
"It's huge," said Lipsitz. "In the patent bar, this is one of the biggest cases in a generation."