Evan Schuman's StorefrontBacktalk

Relief may be in sight for retailers that are afraid someone somewhere has secured a patent covering some mundane process they regularly use in the course of selling stuff—be it the way customers swipe payment cards, their methods for collecting loyalty program data or the functioning of their Web site’s shopping cart feature.

The U.S. Supreme Court on Monday (Nov. 9) heard arguments about process patents and there were indications that it might snuff out such patents altogether. Process patents, also called business method patents, have been derided as frivolous because, some critics charge, patent applications are created after the process has been routinely performed by many companies for years but the “inventor” is merely the first to try to get a patent on that process.

Seven E-tailers, including J.C. Penny, Talbots, L.L. Bean and Overstock.com, are urging the high court to clamp down on patent violation lawsuits by so-called “patent trolls,” which are often shell companies claiming rights to vague business method patents. The retailers note they routinely settle patent infringement claims related to their Web sites rather than spend millions on litigation.

Many of the Supreme Court justices expressed significant skepticism about whether the current system should be maintained. Questioning one attorney about a financial approach patent, Justice Anthony Kennedy raised a Congressional intent argument. “In your view, clearly those would be patentable: the explanation of how to compile an actuarial table and apply it to risk. It’s difficult for me to think that Congress would have wanted to give only one person the capacity to issue insurance.”

Justice Stephen Breyer questioned the very premise of the process patent when used in an overly broad manner. “Every successful businessman typically has something. His firm wouldn’t be successful if he didn’t have anything that others didn’t have. He thinks of a new way to organize. He thinks of a new thing to say on the telephone. He thinks of something. That’s how he made his money. It’s new, too, and it’s useful, made him a fortune. And your view would be anything that helps any businessman succeed is patentable because we reduce it to a number of steps, explain it in general terms, file our application, granted?” Breyer asked.

“Well then, if that were so, we go back to the original purpose of the Constitution,” Breyer said. “Do you think that the framers would have wanted to require anyone successful in this great, vast, new continent because he thinks of something new to have had to run to Washington and to force any possible competitor to do a search and then stop the wheels of progress unless they get permission? Is that a plausible view of the patent clause?”

The newest member of the court, Justice Sonia Sotomayor, asked how far process patents could go. “How do we limit it to something that is reasonable? Why not patent the method of speed dating?”

Chief Justice John Roberts Jr. also weighed in, questioning legal arguments that a process patent needs to interact with a machine. “If you develop a process that says ‘Look to the historical averages of oil consumption over a certain period and divide it by two,’ that process would not be patentable. But if you say ‘Use a calculator,’ then it is?”

The amicus brief filed by the retailers is one of dozens submitted to the high court in the pending case of Bilski v. Kappos. In the case, two inventors–Bernard Bilski and Rand Warsaw–are appealing the rejection of an application for a patent that would cover their method of hedging risk in commodities trading. A federal circuit court found that the method didn’t qualify as patentable because it wasn’t tied to a particular machine or transformative of any physical object.

Because the case deals with whether patents should be granted for methods, it tests whether software programs–including those used by E-Commerce sites for features such as online shopping carts–can be patentable.