Post-Bilski Part II: electricity vs. communication signals — is there a patentable difference?

A pre-weekend thought inspired by a recent post by Mike Madison of Madisonian.net.  In the recent Bilski v. Kappos decision, the U.S. Supreme Court held that business methods are patentable, stating that the former “machine or transformation” test is not the sole test for determining whether a process is patent-eligible.  Nothwithstanding Bilski, the USPTO continues to issue subject matter rejections which state that process claims must recite a machine in order to be patent-eligible.  This indicates that the “machine-or-transformation” test is still alive and well at the USPTO.

Madisonian.net reports on In re Erving Industries, Inc., a recent opinion from the U.S. Bankruptcy Court in the District of Massachusetts considering whether the sale electricity is sale of a “good” under the U.C.C.  In the opinion, the court makes a distinction between electrical signals (such as telecommunication signals) and electricity itself:

But this Court discerns a marked difference between electricity and television, radio, telephone, and internet signals (“telecommunication signals”). Although their manifestations may appear similar, they are differentiated by both their physical attributes and the purposes for which they are purchased. Telecommunication signals are properly considered services because they are mechanisms by which other non-goods — intellectual property, ideas, sounds, music, images, and words — are sent from one location to another. Electricity, in contrast, is not merely a medium of delivery, but is the thing the customer seeks to purchase. Customers paying for telecommunication signals may, on the whole, be fairly unconcerned with the physical properties or mechanics of the telecommunications signals, except to the extent that those physical properties enhance the delivery of information. On the other hand, electricity customers are undoubtedly concerned with the intimate physical properties of electricity. That is, customers rely on the specific physical properties of electricity to fulfill their needs — anything deviating from those properties simply will not do. And it is those physical properties, the very nature of electricity, that customers contract to purchase.

The Court agrees with NewEnergy that, although its ultimate nature may be mystifying to most, electricity is tangible and does possess physical properties. It is not simply an “idea” akin to intellectual property. Although perhaps lacking in corporeal shape and not easily observed, electricity really is some thing, something that can be felt (although we are loathe to) and something that can be created, measured and stored.

Putting aside arguments about the technical accuracy of the court’s opinion, how might this apply to patentable eligible subject matter?  If it translates to patent law, would it confirm that a process that involves manipulation of electricity (e.g., by operating an electricity-powered machine) be patentable?   Does Bilski mandate that a process of manipulating communication signals — even though not tangible — is not necessarily excluded from patentability?

Comments are welcome.  One thing that is certain is that Bilski did not establish certainty about the topic of patent-eligible subject matter.

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