Morris Manning & Martin, LLP

U.S. Supreme Court Issues Key Ruling on "Processes" as Patentable Subject Matter

06.28.2010

Business methods, computer software, and medical method patents not to be categorically rejected

e U.S. Supreme Court today (June 28, 2010) handed down its highly-anticipated opinion in the case of Bilski v. Kappos, Case No. 08-964.  The Supreme Court affirmed the decision of the Court of Appeals for the Federal Circuit and held that the subject matter of Mr. Bilski’s patent application was not patentable subject matter.

However, in ruling against Mr. Bilski and denying him a patent, the Supreme Court said that the Federal Circuit’s “machine-or-transformation” test is not the sole test for patent eligibility.  Interestingly, the Court said that under its other precedents, the term “method” within the statutory definition of “process” may include at least some methods of doing business.  This seems to leave the door open for some kinds of business method and other process patents.

The Supreme Court said that the claims of Mr. Bilski’s patent application, which were directed to a basic concept of hedging risks, were merely unpatentable abstract ideas and were thus unpatentable in view of other Supreme Court precedents.    Because the Bilski application could be rejected under earlier rulings on the unpatentability of abstract ideas, the Court said it need not define further what constitutes a patentable “process.”  The Supreme Court did not foreclose the Federal Circuit from developing other limiting criteria on the notion of patentable subject matter, especially as regards a patentable “method” or “process.”

Some initial thoughts on the implications of the case include these:

  • The Supreme Court did not categorically reject business method patents, nor did they categorically reject the “machine-or-transformation” test.
  • Some business methods may still be patentable subject matter, provided they are presented (and claimed) in a manner that is not too “abstract.”
  • A claim for an abstract idea such as risk hedging, even with a mathematical formula, by itself is not enough to justify a patent.
  • Many computer-oriented processes will likely remain patentable subject matter.
  • It remains unclear where the line will be drawn for computer-implemented inventions – merely limiting an abstract idea to a particular field of use (e.g. risk hedging) or adding token post-mathematical solution activity will not suffice to create patentable subject matter.
  • Some “inventions” such as tax avoidance or counseling schemes will likely be viewed as too abstract and unpatentable.
  • Having a process “tied to a particular machine” or “transform a particular article into a different state or thing” would seem to be safe harbors for patentable subject matter.

MMM will host a webinar in the next few days to review the Supreme Court’s decision and assess how to pursue patents in the area of software, business methods, medical methods, and other “process”-oriented type inventions.  The webinar invitation will be issued separately.

In the meantime, if you would like to discuss how this ruling may affect your business, please contact one of our lawyers.