The Bilski ruling (08-964) came out yesterday in what was a busy morning for the Supreme Court. In addition to Bilksi, they also ruled to strengthen gun rights and that parts of Sarbanes-Oaxely are unconstitutional.
Bilski was meant to address the issue of business method, or software, patents such as those typified by Amazon’s one-click and others. The patent under issue in Bilski was a method for hedging energy trades, but the industry looked to the Bilski ruling to provide greater clarity around general process and software patents that describe methods to achieve some end rather than a machine or apparatus.
In ruling that the “machine-or-transformation” test should not be the sole test of eligibility, the Court on Monday left the door open for software and business method patents. Justice Kennedy writes
“The machine-or-transformation test may well provide a sufficient basis for evaluating processes similar to those in the Industrial Age——for example, inventions grounded in a physical or other tangible form. But there are reasons to doubt whether the test should be the sole criterion for determining the patentability of inventions in the Information Age.”
What does this mean for ATS? Well, the ruling could have had a chilling effect on the prospects of our patent business since many of our patents are software or algorithms implemented in software. Had Bilsky been ruled to make such inventions ineligible for patent protection, it would have been a big setback for ATS by inviting challenges to our issued IP as well as providing hurdles for our outstanding applications. The prospective value of our IP and pending IP would have dropped significantly. Further it would have been a blow to our major IP partner Intellectual Ventures.
Stronger patent rights favor ATS. We create IP and, since nearly all our business is consulting, we have almost zero exposure to litigation. So rulings that increase the strength of patents and broaden the scope of what is patentable are positives for ATS.
But Bilski was not a ringing endorsement for software patents either, leaving considerable ambiguity and the possibility of future challenges. Net-net, ATS didn’t lose with Bilski.