Yesterday, the Supreme Court decided Bilski v. Kappos, the most recent case at the Court probing the boundaries of patentable subject matter under § 101.  Details of the underlying facts of the Bilski case may be found in our post on the Federal Circuit's en banc decision here.

All nine Justices agreed that Bilski's method claims were not patentable.  All nine Justices also agreed the "machine-or-transformation" test, held by the Federal Circuit to be the exclusive test for whether method claims are patentable subject matter, was a useful test, but not the exclusive test for such claims.  In this way, the outcome was similar to KSR.  There, the Federal Circuit had adopted an exclusive test for the question of obviousness.  The Supreme Court then held the test was useful, but not the exclusive test for obviousness.  In addition, all members of the Court at least expressed skepticism that the "useful, concrete, tangible result" test from State Street was a viable test, with the majority stating "nothing in today's opinion should be read as endorsing interpretations of § 101 that the Court of Appeals for the Federal Circuit has used in the past," citing State Street, and the Justice Stevens opinion concurring in the judgment stating it would be a "grave mistake" to assume that all claims meeting this test are patentable. 

The disagreement among the Justices came when considering the question of whether business methods as a more general category fall within the scope of patentable subject matter defined in § 101.  More detail of that disagreement after the jump.

Update: The Court, in its last orders of the Term, has issued a GVR in two § 101 cases, the Prometheus case, relating to methods for measuring the level of certain drug metabolites in the system for the purpose of adjusting the drug administration level, and the Classen case, a nonprecedential opinion relating to a method of selecting a vaccination schedule by comparing alternatives and selecting the alternative with the lower likelihood of autoimmune disorders.  The Federal Circuit will therefore have two opportunities to address § 101 in light of the Court's guidance sooner rather than later.

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This morning, the Supreme Court handed down its opinion in Bilski v. Kappos.  The court affirmed the Federal Circuit's decision.

We'll have more detailed analysis soon.

To read the opinion, click here.

Monday the Supreme Court unanimously held the NFL's practice of collectively licensing the trademarks of all 32 individual teams is not immune from antitrust scrutiny under Section 1 of the Sherman Act.  The NFL argued that because the marks are all licensed through a single entity, NFL Properties, there was no "contract, combination, . . . or conspiracy" under § 1, and therefore there could be no antitrust problem.

The Court disagreed.  The Court first observed the question of whether there is a "single enterprise" is not dependent on the specific legal structure of the entities.  As stated by the Court (internal citations omitted):

The relevant inquiry, therefore, is whether there is a "contract, combination . . . or conspiracy" amongst "separate economic actors pursuing separate economic interests," such that the agreement "deprives the marketplace of independent centers of decisionmaking," and therefore of "diversity of entrepreneurial interests," and thus of actual or potential competition.

Applying this framework, the Court held the existence of NFL Properties was not sufficient to prevent a "contract, combination . . . or conspiracy" and therefore avoid § 1 scrutiny.  The teams are "sparately controlled, potential competitors with economic interests that are distinct from NFLP's financial well-being." 

Despite holding the NFL's actions were subject to review under § 1, the Court did not pass on the merits, and noted some aspects of the NFL may provide a sufficient justification of its licensing practices under the Rule of Reason.  Ultimately, it will be up to the district court to address the merits of the case and determine whether there is a § 1 violation.

Click below for more detail of American Needle, Inc. v. National Football League and links to media coverage of the case.

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Today the Supreme Court decided Reed Elsevier, Inc. v. Muchnick, a case regarding whether the registration requirement of 17 U.S.C. § 411(a) is jurisdictional or a claim processing rule. The Court held the requirement to be nonjurisdictional.

The case involves a class action for copyright infringement by freelance journalists based on republication of works in electronic databases that originally appeared in, for example, newspapers.  Some members of the class had copyright registrations, some did not.  Nevertheless, the district court certified the class and approved the proposed settlement agreement.  The Second Circuit sua sponte raised the issue of jurisdiction, and eventually held the district court lacked jurisdiction to enter an order regarding the unregistered copyrights by virtue of § 411(a).

The Supreme Court disagreed, and held the registration requirement of § 411(a) did not prevent a court from entering an order affecting unregistered copyrights.  Specifically, the Court held there was nothing in the statute that indicated Congress intended the requirement to be jurisdictional.  Notably, the Court observed § 411(a) did not "clearly state[]" that its requirement was jurisdictional, and also explicitly permits claims involving unregistered works in certain circumstances.  This was inconsistent with a jurisdictional requirement, and therefore the district court had jurisdiction to approve the settlement agreement even though it adjudicated claims for unregistered copyrights.

The Court left the question as to whether district courts should sua sponte dismiss copyright cases where the Plaintiff is asserting an unregistered copyright for another day.

More detail of Reed Elsevier, Inc. v. Muchnick after the jump.

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On Monday, the Supreme Court heard oral argument in Bilski v. Kappos in an effort to determine the proper test to be applied to determine whether a claim is patentable subject matter under § 101.  The oral argument transcript is available from the Court's website here.

Click below for our thoughts on the arguments and some of the more interesting quotes from the Justices' questioning.

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In an order today, the Supreme Court agreed to hear an appeal in Bilski v. Doll regarding the patentability of method claims.  Back in October, the Federal Circuit decided In re Bilski, adopting the "machine-or-transformation" test as the exclusive test to determine whether a method is drawn to patentable subject matter.

Bilski filed a petition for certiorari in January.  Some thought the Court may take the case given its recent interest in the area of patentable subject matter, specifically the Laboratory Corp. v. Metabolite Laboratories, Inc. case where certiorari was dismissed as improvidently granted after oral argument was held.  Although the Court did not render a decision in that case, three justices (Breyer, Stevens, and Souter) dissented from the dismissal of certiorari and would have held the claims directed to nonstatutory subject matter.  SCOTUS Blog had the case among its petitions to watch for last Friday's conference, which compiles the cases the authors believe have a reasonable chance of being heard by the Court. 

When the Laboratory Corp. case was pending, many believed the Court was looking to rein in abstract method claims.  The granting of certiorari may be an indication that this is still the case, and the Court was simply waiting for the issue to be better presented.  However, at least one of the previous votes to restrict the permissible scope of method claims, Justice Souter, will not be on the Court when the case is considered next term.  Whether this will make a difference in the outcome remains to be seen.  Of course, until the Court renders a decision in the case (probably not until sometime in 2010), the Federal Circuit's decision remains the law, and the machine-or-transformation test is the sole test for whether a method claim meets the requirements of § 101.

More from SCOTUS Blog here.

The media and legal blogs have begun to weigh in on yesterday's decision in Quanta Computer, Inc. v. LG Electronics, Inc. , holding method claims can be exhausted by the sale of a product substantially embodying the claim.  Click below for a sampling of the coverage from various sources.

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The Supreme Court today decided Quanta Computer, Inc. v. LG Electronics, Inc., dealing with the doctrine of patent exhaustion (also called the first sale doctrine).  In a nutshell, the Court made it more difficult for patent holders to maintain a claim for infringement down the distribution chain of a product.  There were three main aspects to the decision:

1. Method claims, like product claims, are subject to exhaustion
2. Sale of a product whose only reasonable and intended use is to practice the patent and that "substantially embodies" the essential features of the patented method can trigger exhaustion
3. In order for a downstream sale to constitute an infringement, it must be outside the scope of the original license

More detail of these aspects of the holding and additional thoughts below the fold.

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The opinion of the Court in Quanta Computer, Inc. v. LG Electronics, Inc. is now available here.

Thanks to SCOTUSBlog for making a copy of the decision available online.

Update (10:45):  The closing paragraph of the decision is a good, concise summary:

The authorized sale of an article that substantially embodies a patent exhausts the patent holder’s rights and prevents the patent holder from invoking patent law to control postsale use of the article. Here, LGE licensed Intel to practice any of its patents and to sell products practicing those patents. Intel’s microprocessors and chipsets substantially embodied the LGE Patents because they had no reasonable noninfringing use and included all the inventive aspects of the patented methods. Nothing in the License Agreement limited Intel’s ability to sell its products practicing the LGE Patents. Intel’s authorized sale to Quanta thus took its products outside the scope of the patent monopoly, and as a result, LGE can no longer assert its patent rights against Quanta. Accordingly, the judgment of the Court of Appeals is reversed.

We'll have a more detailed analysis later today.

This morning the Supreme Court decided Quanta v. LG, reversing the Federal Circuit's decision.  We'll post a link to the decision (written by Justice Thomas) as soon as it's available.