Perspectives on Patentable Subject Matter

Innovation and Economic Growth, Patents and Intellectual Property

Article Snapshot


Michael B. Abramowicz, James Daily and F. Scott Kieff


Michael Abramowicz, F. Scott Kieff, James Daily, eds., Cambridge University Press, 2014


Commentators disagree as to whether some new ideas should be eligible for patent protection. Protection for business methods, software, methods for treating and diagnosing disease, and DNA is controversial. However, a rule that such technologies can never be patented might not be workable.

Policy Relevance

Patent protection for new technologies might not be as helpful as for technologies of the past.

Main Points

  • In Bilski v. Kappos, the Supreme Court ruled that a system for hedging energy prices using weather projections is ineligible for patent protection as an abstract idea; Pamela Samuelson support the view that no patents on nontechnological ideas and methods should be granted.
  • Kristin Osenga suggests that improving Patent and Trademark Office (PTO) procedures to ensure that patents protect only new and nonobvious ideas will reduce the harmful effect of business methods and software patents on competition.
  • Traditionally, printed diagrams are ineligible for patent protection; Kevin Emerson Collins suggests that, consistent with this idea, computer programs should not ordinarily be patentable.
  • The Supreme Court’s decision in Bilski gives the lower courts flexibility in deciding patent eligibility cases; in biomedicine, the Federal Circuit Court of Appeals will need to balance the desire to keep costs of new medical technologies low for consumers against the need to support inventors’ incentive to innovate.
  • The Supreme Court has explained that only inventions that would not be “disclosed or devised” without the inducement of a patent should be patented; this “inducement standard,” rather than a general rule that some subject matter is not patentable, should guide courts and the PTO in determining whether an individual invention is patentable.
  • Gerard Magliocca supports the view that an idea should patentable only if it is customary within the relevant business community to support the patentability of similar ideas; it should not be permissible for a baseball pitcher to patent the Curve Ball.
  • In fields where many different innovations are combined to make a useful product (such as business and finance), the costs of the patent system may outweigh the benefits.
    • A general rule that business methods are ineligible for patent protection would be unworkable, because of the difficulty of deciding when the rule would apply.
    • Some scholars support the idea that third parties be able to ask the PTO to reexamine the grant of a patent, bringing forward evidence that the idea is not really novel.
  • Josh Lerner’s research shows that financial patents are litigated two to three dozen times more frequently than patents generally.
  • Patent law and economic analysis assume that inventions and patents are few in number, as in the pharmaceutical industry, however, in many fields, innovation is cumulative, as one innovator relies on the efforts of many previous inventors, and patents proliferate.
    • Firms should search out related patents to negotiate the licenses they need before they invest in their own inventions, but rarely do.
    • Policymakers should encourage innovators to search for related patents early on and encourage patent owners to disclose their rights.
  • Other key issues include the problem of patent bullying, the propensity of universities to file many patents, and the relationship of individual inventors to “patent trolls.”
    • “Patent bullying” occurs when large firms take advantage of high litigation costs to force startups such as the telephone company Vonage to settle weak patent claims.
    • The PTO’s decisions tend to protect individual inventor who patent inventions without commercializing them, but the courts are less protective of inventors.


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