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Patently Unconstitutional?

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April 9, 2008

Last week the ACLU took its first foray into the world of patent law. Introducing a rare argument applying the First Amendment to patent law, Chris Hansen filed an amicus brief urging a federal court to uphold the denial of a patent that would, if awarded, violate freedom of speech.

The patent in question, filed by Bernard L. Bilski, was denied by the U.S. Patent and Trademark Office and again (PDF) by the Board of Patent Appeals and Interferences. The United States Court of Appeals for the Federal Circuit will hear the case next. (PDF)

For those hungry for details, here’s what Bilski was specifically trying to patent:

A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:

  1. initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;
  2. identifying marker participants for said commodity having a counter-risk position to said consumers; and
  3. initiating a series of transactions between said commodity provider and said market participant transactions balances the risk position of said series of consumer transactions.

My colleagues with more business sense than I say this is the idea that the weather risk involved in buying and selling commodities could be minimized if sellers had conversations with two buyers instead of one.

Either way, it means Bilksi was seeking a patent for an abstract idea, and abstract ideas are not patentable under the First Amendment.

As Dan Hartrell at IPilogue notes:

This represents another key battleground, although concerns about the effect of intellectual property on free expression are not new. As the scope of patentable subject matter grows more abstract, the conflict between intellectual property and free speech will only intensify.

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