As Predicted, RCT Expands Patentability for Software
Thankfully, the Federal Circuit is bringing normalcy back to recent statutory subject matter debates for software and business methods in view of Bilski. As we predicted, the case of RCT v. Microsoft is the first case in which the Federal Circuit has spoken substantively about the Supreme Court’s Bilski decision, and the bar of “abstract idea” invalidity has been raised back closer to where it was for the last 10 years after State Street.
The court noted that the Supreme Court, as was urged in AwakenIP’s Amicus Brief, “did not presume to provide a rigid formula or definition for abstractness,” thus “With that guidance, this court also will not presume to define ‘abstract’ beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act.”
Looking at the patents at issue, the court went on to note that “the invention presents functional and palpable applications in the field of computer technology”, referencing the patent specification (as we also predicted would play a role in the decision, based on the oral arguments in this case). The court also stated, “[I]nventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act.”
Most importantly, the court did not analyze the statutory subject matter issue in the context of the Machine or Transformation (MOT) test from Bilski. Accordingly, we now appear to have a new test for determining subject matter eligibility, particularly for claims that do not explicitly includes computers/machines or produce transformations.
Of course, this case is not likely to be the last word on patent eligibility. It is only one panel decision, and Microsoft will likely request en banc review. Regardless, other panels are not likely to be as friendly to software and business method patents in the future. Therefore, this case is probably the first in what will be a long string of decisions that try to establish the new test for patentable subject matter.