Tuesday, June 29, 2010

No patents for a way of hedging the impact of the weather on energy prices

By David Gelles [financial Times in San Francisco]
Published: June 29 2010

The US Supreme Court on Monday put limits on the scope of patents for business methods, ruling against two men who sought to protect a way of hedging the impact of the weather on energy prices.

The case, in which Bernard Bilski and Rand Warsaw sought to patent their hedging system, had come to be seen as a test for the US patent system at a time when new technologies are challenging outdated standards for what is patentable.

Previous courts had ruled against the pair as their patent did not involve the use of a machine or transform a substance, the so-called “machine or transformation test” broadly used to grant patents.

While the court upheld those rulings, it used different standards to the test, and ruled that the hedging method was too abstract to warrant protection.

At the same time it said the machine or transformation test was not the only standard to consider when granting new patents.

Businesses have watched the case closely, and many, including Microsoft and Novartis, filed briefs. Many new technology companies want the definition of what can be patented to be as broad as possible, allowing them to protect innovations. Other businesses, including financial institutions, hoped for more restrictive standards to limit new patent lawsuits.

Legal experts cited the court’s rejection of the machine or transformation test as a victory for companies seeking to patent new technologies.

Courtesy: The Financial Times