The patent system has gotten way out of whack in the last 20 years, with people trying to block off entire industries without actually adding much of anything inventive to the world. This has been great for patent attorneys, and some lucky patent holders, but very just terrible for the country as a whole.

In the last few years the US Supreme court and the Federal Circuit have made considerable strides in moving the pendulum back towards a more reasonable position. In the Oct. 2008 Bilski case, an en banc panel of the Federal Circuit held that a claimed invention must either (1) be tied to a particular machine or apparatus or (2) transform a particular article into a different state or thing. Focusing on the particular facts of the case at issue, the Court held that the transformation cannot simply be "public or private legal obligations or relationships, business risks, or other such abstractions." Viewed in more general terms, the court held that if the transformation is occurring with respect to data, then at least the data must relate to something tangible.

The new holdings, of course, open up all sorts of new questions, especially as to when data relates to something tangible. For example, is a method patentable if it relates to physical dollar bills instead of electronic bank accounts? There will be other problems with interpretation as well, and these problems will not be easy to solve. But at least we are continuing to move in the right direction.

In the meantime, despite all the "woe is me" blogs by patent attorneys, inventors should appreciate that the Federal Circuit holdings are not new, and should not be overly burdensome. The Federal Circuit merely affirmed rules that the patent office has been enforcing on applicants since mid 2007 -- and in every case we have encountered at Fish & Associates, we been able to re-write the claims in a manner that satisfies the requirements. The bottom line is that the patent system needs to find a way to properly reward inventors according to the level of contribution they make towards society, not according to the degree to which attorneys can game the system. Bilski is not perfect, but it pushes everyone further in that direction.