Supreme Court Sidesteps Deciding Key Patent Case - InformationWeek

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Supreme Court Sidesteps Deciding Key Patent Case

Three justices hint that they might have invalidated business-method patents.

Three Supreme Court justices accused their colleagues of being chicken because they refused to decide a key patent case that could have invalidated business-method patents.

These are the types of patents that are at issue in the eBay and other technology-related cases.

By a 5-3 vote Thursday, the high court in a one-line statement dismissed an appeal by Laboratory Corp. of America on infringing a patent held by Metabolite Laboratories, saying it should never have heard the case because it raised issues not addressed by lower courts.

The patent concerns a test for diagnosing vitamin deficiencies. LabCorp maintains that the patent should be ruled invalid because it involves the thought process of physicians making the diagnosis. Abstract ideas and laws of nature cannot be patented. A jury ruled that the patent didn't cover an abstract idea or natural law and ordered LabCorp to pay Metabolite $5 million.

The reason this case has drawn the interest of the IT industry is that the process to determine the vitamin diagnosis has similar characteristics to the processes detailed in many business-method and some software patents.

Among the most recent and visible business-method patent cases was eBay v. MercExchange, in which the online auctioneer was found to have violated a MercExchange patent used for eBay's Buy-It-Now feature. Last month, the Supreme Court ruled--reversing a century-old precedent--that trial courts must not automatically impose an injunction for patent infringement. Many saw the LabCorp.-Metabolite case as another chance to overturn or refine a long-standing practice of granting business-method patents.

Patent attorney Marc Brown of McDermott, Will & Emery says if the Supreme Court hadn't sidestepped the LabCorp case, a decision could have removed one of the clouds hanging over business-method patents.

"This case had the potential of seriously disrupting the status quo," Brown says, but the court's inaction "signaled that a change is no longer immediately on the horizon." The Federal Circuit--the court that hears patent appeals--has been "very pro business-method patents, so contrary to a decision by the Supreme Court, the right to a business-method patent is pretty secure."

But Justice Stephen Breyer, in the dissent he wrote in which colleagues David Souter and John Paul Stevens concurred, suggested that the Metabolite patent should have been invalidated. In his dissent, he makes reference to a 1998 case, known as State Street Bank, in which the Federal Circuit ruled that business processes can be patented. "That case does say that a process is patentable if it produces a 'useful, concrete, and tangible result,'" Breyer wrote. "But this [Supreme] Court has never made such a statement and, if taken literally, the statement would cover instances where this court has held the contrary."

Breyer then cited the high-court nullification of a claim to the use of electromagnetic current for transmitting messages over long distances even though it produced a result that seemed "useful, concrete, and tangible." Similarly, he wrote, the Supreme Court invalidated a patent setting forth a process that transforms, for computer programming purposes, decimal figures into binary figures, even though the result would seem "useful, concrete, and at least arguably within the computer's wiring system tangible."

Breyer, though, must wait for another day, and case, to sway a majority of his colleagues to place limits on or even invalidate business-method patents.

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