Reconsidering "business methods" patents

From the important under-reported news department:

Top court to hear business method patent case
By Diane Bartz
WASHINGTON (Reuters) - The Supreme Court said on Monday that it would hear the Bilski patent case, which will tell high-tech and software companies how far they can go in patenting software, financial strategies and other abstract processes.

According to 35 U.S.C. 101:

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 therefor, subject to the conditions and requirements of this title....

"Process" was originally understood to mean industrial process -- something comparable to, say, the "cracking" process by which heavy petroleum components are converted to more desirable lighter distillates like those that make up gasoline or the way glass can be made tougher by annealing. By 1998, however, the United States Patent and Trademark Office, (USPTO), abandoned its earlier position that "business methods" were not "technological" and therefore not patentable. Then the USPTO contended in its brief to State Street Bank v. Signature Financial Group, and was upheld, that the meaning of "process" could include business methods after all. Perhaps this turn-about was out of a desire to enlarge its turf but if so the USPTO has been punished for overweening ambition by a flood of applications for "business methods" pushing the envelop in the direction of making almost any abstract idea patentable. It now wants to re-establish some link to something tangible.

From the Reuters report:

An appeals court that specializes in patent cases had ruled in October that the Patent Office was correct in refusing to allow Bernard Bilski and Rand Warsaw's company, WeatherWise, to patent a method for hedging against energy cost changes.

The refusal was on grounds that Bilski's method lacked a specific machine implementation or material result and was, therefore, an unpatentable purely abstract idea. The signs are that the courts and the USTPO all would like to back out of the State Street Bank decision as an unfortunate mistake. Corporations holding business methods patents of course are trying hard to preserve the status quo.

I look for the Supreme Court to heal much of the damage done by State Street and some subsequent court cases. If it does not then that may be a positive for certain companies but a setback for innovation, the encouragement of which was a prime justification for the establishment of patents in the first place.