Homework 5: Feb 14 Karch
Brief of Koninklijke Philips Electronics N.V. as Amicus Curiae in Support of Petitioners (Mar. 2, 2009)
Arguing to grant certiorari to review decision of the court of appeals
Patent rights are defining assets for high technology businesses and the monetary values of patents are often used as important gating metrics for strategic investment decisions. The Court of Appeals decision abruptly upsets decades of established patent law precedents and thus undermines business valuations that were and are currently being made in reliance upon the established law.
These factors will likely chill and delay planned investments in new research and in start-up ventures which are essential to American economic recovery.
Koninklijke Philips Electronics
Koninklijke Philips Electronics N.V. (aka Royal Philips Electronics N.V.) is the parent corporation of a worldwide family of companies (“Philips”). Philips has been inventing and manufacturing electronic and electrical products for over 115 years and is one of the largest users of the patent system in the United States.
Philips is a technology company. Very few of our patented inventions involve methods of doing or conducting business in the sense exemplified by the petitioners' hedging transactions. But the decision below also affects the patentability of technologies and it is already being applied as precedent by the Patent Office to reject patent applications for technological innovations in our traditional product lines. Thus we have grave concerns that a mandatory machine-or-transformation test for patentable subject matter will severely limit our ability to obtain effective patent protection for our concrete and tangible technical innovation.
Summary of the Argument
- The Court of Appeals decision works an unnecessary sea change in deep-rooted principles of patent law that will necessitate a massive revaluation of technology assets and will delay new investments that are essential to economic recovery.
- The Court of Appeals has now discarded over thirty five years of post- Benson case law in favor of a mandatory, two-pronged machine-or-transformation test for patentable subject matter. Without the first prong, the new test is, in substance, simply a return to the stale physical transformation tests for patentability, which were already discredited and rejected at the end of the nineteenth century.
- Uncertainty about the value of the patents introduces uncertainty in determining the value of the patent owner's business. American R&D executives said that 60 percent of the projects that ultimately produced new discoveries would never have happened without patent protection.
- Today some two-thirds of the value of large American businesses can be traced to intangible assets that embody ideas, especially the intellectual property of patents and trademarks.
- Broad process claims are commercially necessary and they contribute significant added value to patented inventions in the new economy. The four categories of patentable subject matter that Congress specified in § 101 “process, machine, manufacture or composition of matter” are not mutually exclusive.