Home > I.P. Freely > U.S. Supreme Court releases long awaited Bilski Decision

U.S. Supreme Court releases long awaited Bilski Decision

Here’s a case that has the legal community buzzing in the United States. Well, at least those interested in patent law and how it relates to business methods. I had always wondered what the extent of patent eligibility was for business processes or methods. This recent ruling seems to clarify some, but not all issues.

The U.S. Supreme Court has ruled on the long awaited Bilski v. Kappos decision, a case that was expected to have wide-reaching consequences in defining the limits of patentable subject matter. In particular, this case would provide guidance with regard to patents relating to business methods and software.

U.S. Supreme Court

The U.S. Supreme Court affirmed that business methods and software are patent protectable unless they are written to cover “laws of nature, physical phenomena, and abstract ideas.” The Court also made another interesting holding, stating that that the ‘machine-or-transformation’ test used by the Court of Appeals for the Federal Circuit is not the only test for determining patent eligibility. The decision appears to preserve the status quo and leaves the door open for patents directed to software and business methods.

Bilski, who ever he is, wanted to patent a ‘business method’ which had to do with hedging risk in the energy market. The Federal Circuit had previously held that the Bilski’s application was not eligible for patent protection. The Federal Circuit provided the following reasons; in order to make a patent claim for a process, it must (1) be tied to a particular machine or apparatus, or (2) transform a particular article into a different state or thing. This is the so-called  “machine-or-transformation test” which until now, was the sole test for determining patent eligibility of a process.

In an opinion authored by Mr. Justice Kennedy, the Supreme Court agreed that Bilski’s claim was not patent-eligible matter. In interpreting Section 101 of the U.S. patent laws, the Court held that:

“the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101,” but that the test is “not the sole test for deciding whether an invention is a patent-eligible ‘process.’”

It appears that although the Supreme Court left open the door to patent eligibility, just how to pass through the door remains slightly unclear. In conclusion, the Supreme Court refrained from effecting any large change in the patentability of  business methods.

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