Medical Device Daily Washington Editor

Of all the issues turning up in connection with intellectual property where life science firms are concerned, the business method patent has perhaps taken a back seat to issues such as patent obviousness, and patent reform legislation has been foremost on the minds of a number of inventors.

However, the legitimacy of business method patents has jumped to the front burner now that the Supreme Court of the United States has granted certiorari for the case of Bilski v. Doll, presumably to be renamed Bilski v. Kappos sometime soon (see story on Kappos' nomination as PTO director below).

Bilski is the family name of Bernard Bilski, who along with Randal Warsaw filed a business method patent in 1997 designed to hedge the risks associated with agricultural product trades. PTO's examiners rejected the patent in part because, according to the published decision, "the invention is not implemented on a specific apparatus and merely manipulates [an] abstract idea and solves a purely mathematical problem" that is not limited to any field of inquiry. The rejection was also based in part on the fact that the mechanism can be employed anyone with a pencil, a piece of paper and a facility for math.

Bilski and Warsaw also lost in an appeal board at PTO in a decision issued in 2006, and the appeal board noted that it has been pelted with a number of method patents in the years leading up to its decision, including attempts to patent "physical sports moves" as well as methods of dating. The appeal board acknowledged that the lack of a specific mechanical apparatus is not a non-starter for a patent application so long as the patented item produces a "transformation of physical subject matter from one state to another." All the same, the board concluded that mitigation of financial risk constitutes no such transformation.

The Court of Appeals for the Federal Circuit (CAFC) heard the case in May 2008 and rendered a decision that referred to a wider set of conditions under which the physical transformation test could be applied, but nonetheless concluded in a 9-3 decision that even though the field of electronics has stretched the notions of physical objects and material substance, the Bilski method nonetheless fails to measure up because business contracts and the potential for financial gain or loss do not equate to physical objects or substances and "are not representative" of them.

The Advanced Medical Technology Association (AdvaMed; Washington) has filed a friend-of-court briefing co-authored by several other associations, including the Biotechnology Industry Organization (BIO; Washington) in which the authors argue that the CAFC decision "is contrary" to Supreme Court precedent "and creates uncertainty regarding" patent eligibility, even so far as existing patents are concerned. That uncertainty, the authors assert, "will deter critical investment in the biotechnology and medical technology industries."

The idea of a process claim is fundamental "to processes for diagnosing or prognosing diseases and to biomarkers," the signers argue. The briefing also states that the related portion of the Code of Federal Regulations permits patenting of "any new and useful processes" and rules out "only abstract ideas, laws of nature and natural phenomena." The signers added that the Supreme Court has previously "disfavored rigid, bright-line tests such as that imposed in Bilski."

The web site for the Supreme Court does not yet indicate a date for arguments.

Kappos gets Senate Judiciary nod

The nomination of David Kappos as the director of the Patent and Trademark Office moved one critical step along Thursday, when the Senate Judiciary Committee gave the nomination its unanimous approval on the last day of hearings before the August recess.

The Obama administration tabbed Kappos for the job earlier this summer (Medical Device Daily, June 22, 2009) to bipartisan approval in the Judiciary committee. Among Kappos' qualifications are that he currently holds the post of assistant general counsel for intellectual property at IBM (Armonk, New York), a firm that is generally seen as holding more patents than any other U.S. firm. However, the nominee is seen as potentially conflicted on several fronts, including his advocacy on behalf of litigants in the patent continuations lawsuits filed by GlaxoSmithKline (London) and Triantafyllos Tafas, MD, founder of device maker Ikonisys (New Haven, Connecticut).

The bid has drawn a number of approving nods from industry and the patent bar, including Gene Quinn, founder of the blog Quinn states in an Aug. 6 posting that he has been "cautiously optimistic about Kappos," but that after hearing from Kappos in recent testimony before the Judiciary Committee, Quinn is more inclined to see Kappos as "the right man for the job."

PTO unveils revamped beta web site

The Patent and Trademark Office is among the federal agencies that is undergoing an overhaul of its web site, and recently reported the availability of a beta test version with an improved patent database search tool.

According to last week's undated announcement on the PTO site, the new site "has been redesigned to improve the look and feel, as well as to enhance the user experience with improved navigation." PTO added that its goal is "to make the web site technologically up-to-date, user-friendly, and responsive to customer feedback."

The web site revamp follows PTO's successful pilot of an electronic patent application system, which the agency is opening up to all comers. According to the July 21 statement, use of the system is optional, but those who used it "were able to retrieve office communications several days faster than postal mail."

Mark McCarty, 703-268-5690;