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Machine-or-transformation? Bilski court speaks!

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

At last, the Supreme Court's long-awaited ruling on the standard of patentability of business method software patents in In re Bilski has been handed down (you can read it in full here). It's a 71-page decision and the IPKat can't pretend to have read it all: comments and analysis will come later. According to the headnote:

"Petitioners? patent application seeks protection for a claimed invention that explains how commodities buyers and sellers in the energy market can protect, or hedge, against the risk of price changes. The key claims are claim 1, which describes a series of steps instructing how to hedge risk, and claim 4, which places the claim 1 concept into a simple mathematical formula. The remaining claims explain how claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand. The patent examiner rejected the application on the grounds that the invention is not implemented on a specific apparatus, merely manipulates an abstract idea, and solves a purely mathematical problem. The Board of Patent Appeals and Interferences agreed and affirmed. The Federal Circuit, in turn, affirmed. The en banc court rejected its prior test for determining whether a claimed invention was a patentable ?process? under Patent Act, 35 U. S. C. §101?i.e., whether the invention produced a ?useful, concrete, and tangible result,? see, e.g., State Street Bank & Trust Co v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373?holding instead that a claimed process is patent eligible if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a differentstate or thing. Concluding that this ?machine-or-transformation test? is the sole test for determining patent eligibility of a ?process? under §101, the court applied the test and held that the application was not patent eligible.

Held: The judgment is affirmed".

In addition to the main judgment, delivered by Justice Kennedy, a number of additional concurring judgments were delivered. Justice Kennedy's concluding comments are worthy of note:

"Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act?s text. The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what constitutes a patentable ?process,? beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr. And nothing in today?s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357. It may be that the Court of Appeals thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents, including (but not limited to) application of our opinions in Benson, Flook, and Diehr. In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit?s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text. The judgment of the Court of Appeals is affirmed".

Wikipedia on Bilski here
Patently-O's pre-Bilski software patent survey here
Coroporate Counsel: the waiting was the hardest part here

Full post as published by IPKat on June 28, 2010 (boomark / email).