Determination of Patentable Subject Matter Not Limited to Machine-or-Transformation Test; Some Business Method Patents Survive
By Davis Doherty – Edited by Matt Gelfand
Bilski v. Kappos, No. 08-964 (U.S. June 28, 2010)
In a 9-0 decision, the Supreme Court affirmed an en banc ruling by the Court of Appeals for the Federal Circuit, which held that the petitioners’ claimed invention, a commodities risk-hedging method, was unpatentable. At the same time, a 4-1-4 split on the broader issue of patentable subject matter resulted in a narrow opinion that leaves open the possibility that some business method patents may be appropriate.
In an opinion penned by Justice Kennedy, joined by Chief Justice Roberts and Justices Thomas and Alito, and in part by Justice Scalia, the Supreme Court held the petitioners’ claimed invention was unpatentable under the Patent Act because it was an abstract idea. See 35 U.S.C. § 101 (2006). While the Court affirmed the Federal Circuit’s en banc ruling, its decision overturned the appellate court’s holding that a “process” is patent eligible under § 101 only if: “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” In re Bilski, 545 F. 3d 943, 954 (Fed. Cir. 2008) (en banc opinion). The Court noted that while this “machine-or-transformation” test may be a useful indicator of patentability in most cases, the text of the Patent Act is incompatible with the use of the test as an exclusive standard. Justice Stevens wrote a concurrence, joined only by Justices Ginsburg, Breyer, and Sotomayor, that would have struck down business method patents as categorically patent-ineligible subject matter.
Briefs and relevant court documents are available at SCOTUSwiki. SCOTUSblog provides an overview of the case. Inventive Step criticizes the decision for its failure to provide guidance on patent eligibility. Patently-O provides analysis regarding the import of the Court’s concurring opinions.