By MATT CHANDLER
Buffalo Law Journal

Lawyers on both sides of a dispute with the potential to reshape the rules of what is patentable stood before the U.S. Supreme Court Monday and argued their cases.

The case, Bilski v. Kappos, centers around the interpretation of Article I, Section 8, Clause 8 of the U.S. Constitution: "The Congress shall have the power ... to promote the progress of science and the useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries."

In 1997, business partners Bernard Bilski and Rand Warsaw applied for a patent, seeking to protect a business method they developed for hedging risk in commodities trading. The Patent and Trademark Office rejected the application, judging that it did not meet the requirements for a patentable business method. "The invention," wrote the patent examiner, "is not implemented on a specific apparatus and merely manipulates an abstract idea and solves a purely mathematical problem without any limitation to a practical application."

That decision sparked a 12-year battle that has divided observers and will now be decided by the highest court in the land.

Should the court affirm an appellate court's ruling that the Bilski patent should not be issued, patent lawyers say, the floodgates may be opened to invalidating tens of thousands of business-methods patents already in place. Many intellectual-property experts believe software companies, for example, could be at risk of losing patents on valuable software if the court finds for Bilski and Warsaw.

Sources from the Buffalo legal community said it is a case that has been on their radar for quite some time, and their opinions on how the court should or will rule were mixed.

Vincent LoTempio, a registered patent attorney with Kloss Stenger & LoTempio, believes the rejection of Bilski's patent could have wide-ranging negative consequences.

"The plaintiff is saying, ‘We're the first person to come up with a way of doing this, why shouldn't we get value for it?' " he said. "Why would people even bother coming up with new ideas and ways of doing business if it's just going to be stolen from them?"

He said followers to his Twitter page - many of whom are patent attorneys - have also been weighing in on the Bilski case via daily tweets.

"Everybody's been talking about it. It's been highly anticipated," he said of the forthcoming decision.

LoTempio has read the transcripts of the oral arguments presented in the case this week. He said it is difficult to discern which way the court might be leaning based on the questions the justices have posed.

"What I'm hoping," he said, "is that the Supreme Court can see the value in people coming up with a business method and a new way of doing things."

From Bob Simpson's perspective, however, the Bilski case never should have reached the Supreme Court.

"I think it's much ado about nothing," said the Williamsville patent attorney, a partner in Simpson & Simpson PLLC. "It's very unlikely that the patents issued since State Street (a landmark 1990s case addressing business-method patents) will be thrown out."

Simpson sees the case as a chance for the high court to clarify the requirements for patentability. He said patenting something that amounts to nothing more than an idea about how to do something could create laughable scenarios going forward.

"If Bilski was in place and you were the first person to use a Hula-Hoop, you probably could have patented the demonstration of a Hula-Hoop and then collected a royalty from everyone that did it your way," he said, illustrating the potential complications that could arise if the court rules in Bilski's favor.

Michael Berchou, a partner at Phillips Lytle LLP, believes if the past is any indication, change may be on the horizon.

"Anytime a case is going up to the Supreme Court, I think it usually suggests that the Supreme Court sees something in the federal opinion that they want to take a closer look at, and there might be a change in the law," he said.

Berchou believes the court will affirm the lower court's rejection of the Bilski patent, but he says that is only one part of the equation.

"The bigger question is, are they going to set out a new standard that might impact software companies and the patents that are in effect today?" he said. "It can be very difficult in these cases to predict where they will come out, and the justices' questions suggest that maybe they don't know where they are going to come out either."