Yahoo Urges Supreme Court to Reject ‘Bilski’ on Patent Eligibility

History might indicate the Supreme Court will look skeptically on the Bilski ruling, since it struck down Federal Circuit patent rulings on the conditions for issuing injunctions in MercExchange v. eBay, damages for foreign infringement in Microsoft v. AT&T and the standard for “obviousness” in KSR v. Teleflex, just since 2006 (CED May 1/07 p5). The Bilski case drew several briefs from tech companies and associations for its first review, and Federal Circuit Chief Judge Paul Michel hinted in the ruling that he expected the Supreme Court eventually to “set aside this test to accommodate emerging technologies.”

Yahoo called the machine-or-transformation test “conceptually and practically flawed,” while distancing itself from the patent in Bilski, which Yahoo called invalid. The plaintiffs in the case tried to “patent the idea of hedging, at least with respect to commodities trading, and fail[ed] to propose a specific process for hedging,” such as laying out a “specific series of steps that are stable, predictable and reproducible” -- in other words, “machine- like,” Yahoo said. The language of Section 101 of the Patent Act is “sweeping,” making “any new use of a known process” eligible for protection, the brief said. The Federal Circuit’s test “elevates form over substance” and lets the well-established limitations on eligibility “swallow the rule.”

“The kinds of things for which patents were issued years, decades or even centuries ago” are the only inventions eligible for protection under the Federal Circuit’s ruling, Yahoo said. The patent system is “fundamentally about advances in technology, about tomorrow’s innovations,” the brief said. Courts historically have approved processes as patents and used the Federal Circuit’s conditions as “examples of patentable functions,” not the whole scope of eligibility. “In the realm of computer-executed processes, the line between a ‘machine’ and a ‘process’ is indistinct at best,” with the same processes often able to run in either tangible hardware or intangible software, Yahoo said.

The MP3 music format enjoys patent protection although it’s simply a “complex, mathematical formula with a specific application” -- compressing music files to get rid of sound ranges imperceptible to humans, Yahoo said. The value of the format is its wide interoperability -- allowing files to run on any general-purpose computer rather being tied to a “particular” machine -- but it couldn’t be patented under Bilski.

The two patent decisions from the Federal Circuit since Bilski have been a mess, Yahoo said. In the first, the court upheld as patentable a process “performed by [a] computer” if it’s tied to a particular machine, a standard that may not give “sufficient guidance to the PTO and other courts.” The second overturned a process patent except for a claim that mentioned “modules” required to carry out the process. The Board of Patent Appeals and Interferences also has been tripped up by the “particular machine” language, approving patents for processes when carried out by an “apparatus” but not by a “general purpose” computer, Yahoo said. The board mostly struck down claims for a patent on converting an Internet domain name to a “bidirectional” name -- one that can be displayed in languages with “non-English reading orders.” But it left open for re-examination whether a claim that mentioned a “computer readable medium” was eligible, the brief said.

“Sometimes it is best to acknowledge that the emperor has no clothes,” Yahoo said. “These distinctions make no sense, and they therefore cannot provide the consistency, stability and predictability that Congress and this Court have found so critical” in patent law.