TRIPS Non-Discrimination Principle: Are Alice and Bilski Really the End of NPEs?
25 Pages Posted: 1 Sep 2015 Last revised: 30 Nov 2016
Date Written: August 30, 2015
The Supreme Court’s decisions in Bilski as well as in Alice have significantly reduced the level of patent protection provided to software and business methods in the U.S. Nevertheless, Article 27(1) TRIPS establishes that WTO countries must offer protection to any invention, whether product or process, without discrimination based on the field of technology. Is the U.S. currently in violation of its TRIPS obligations?
Although there is no clear understanding among WTO countries regarding whether Article 27(1) TRIPS covers software and business methods, the U.S. has consistently interpreted this provision as requiring these subject matters to be protected. This interpretation is found specifically in the context of the review of other countries’ IP laws when they became WTO members. Thus, it appears unlikely that the U.S. will be able to argue otherwise in future international negotiations or in the case of a possible WTO challenge to §101 of the U.S. patent code - as interpreted by the Alice and Bilski decisions. More importantly, this result exposes the U.S. to opposing strategies by other WTO countries that diminish its ability to promote TRIPS compliance in any significant way.
The relevance of the conformity of the Alice and Bilski decisions to Article 27(1) TRIPS goes beyond the appropriate level of protection that must be provided to software and business methods to avoid a violation of international obligations on patentable subject matter. Much more is at stake. Indeed, NPE activity in the U.S. is highly dependent on the availability of enforceable software and business methods patents. The issuance of the decisions in Alice and Bilski appears to have seriously harmed the operation of these companies. However, the international perspective offered in this article raises the question of whether these two decisions indeed represent the last word on the eligibility of processes to receive patent protection, or whether there will be additional Supreme Court interventions to restore protection on software and business methods to a more intermediate level.
Finally, in recent years, there has been substantial discussion on patent reform to curtail NPE activity. However, the aftermath of the Alice and Bilski decisions seems to have reduced the urgency for legislative intervention in this area. This article highlights the fact that such a conclusion might be premature and that if it is, indeed, established that the operation of NPEs impedes innovation, patent reform might still be necessary to effectively limit the activity of these companies.
Keywords: Business methods patents, software patents, NPEs, TRIPS Agreement, Article 27(1) TRIPS, Alice, Mayo two-step test
JEL Classification: K10, K20, K33
Suggested Citation: Suggested Citation