Topics & News

Decision of Bilski v. Kappos Released


The United States Supreme Court has recently issued its opinion in the much anticipated case of Bilski v. Kappos, which undertook the task of determining the extent of patentability afforded under 35 U.S.C. § 101. The focus of the Supreme Court’s decision was to determine which test is to be used in order to determine whether method claims, specifically business method and software claims, are patentable under the code.

To summarize, the U.S. Supreme Court granted certiorari and was presented oral arguments on the appeal of In re Bilski, 545 F.3d 943 (2008). Recalling back, In re Bilski was an en banc decision of the U.S. Court of Appeals for the Federal Circuit, which affirmed the rejection of patent claims involving a method of hedging risks in commodities trading. The decision of In re Bilski reiterated the "machine-or-transformation test" as the applicable test for patent-eligible subject matter, no longer relying on the standard set by State Street Bank v. Signature Financial (that methods only need to produce "a useful, concrete, and tangible result").

In the Bilski v. Kappos decision handed down, the Supreme Court affirmed the judgment of the lower court in rejecting Bilski’s hedging claims but, more importantly, stated that the machine-or-transformation test (i.e., that a claimed method is patentable if (i) it is tied to a particular machine or apparatus, or (ii) it transforms a particular article into a different state or thing) is not the sole test of patentability based on an interpretation of the language of § 101.

The Supreme Court stated that "the machine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals" and that "the Court today is not commenting on the patentability of any particular invention, let alone holding that any of the above-mentioned technologies from the Information Age should or should not receive patent protection." The Court looked to older case law, specifically noting that Gottshalk v. Benson, 409 U.S. 63 (1972), Parker v. Flook, 437 U.S. 584 (1978), and Diamond v. Diehr, 450 U.S. 175 (1981) did not solely rely on the machine-or-transformation test as the test for patent eligibility. The Court, however, did not provide details on a new test that would determine patentability but instead did not wish to preclude the Federal Circuit from making a more appropriate test.

The Court also rejected the exclusion from patent eligibility of business method patents, i.e., that business methods are not unpatentable per se, as long as they do not cover abstract ideas, etc.

Given the Supreme Court's decision, it is expected that the USPTO will issue new guidelines on this topic soon to address the change in the patentability test. We will keep you informed of new policies that the USPTO creates regarding the above matter.

Page top