US Supreme Court Decides in Bilski - Business Methods Still Patentable Subject Matter

The US Supreme Court today decided in Bilski et al. v. Kappos, that business method patents are eligible subject matter under Section 101 of the Patent Statute 35 USC.

Oral arguments were presented on this case in November of last year and the decision has been eagerly awaited by the Patent Bar and by many in the public.

The Court rejected the Federal Circuit's an exclusive machine or transformation test, but instead affirmed the Federal Circuit's decision based on the subject matter being an abstract idea.  The claimed subject matter involved a procedure for instructing buyers and sellers how to protect against the risk of price fluctuations in a discrete segment of economy.

The majority of the Court supported the following language:

"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."


This case brings us back to the analysis provided in Benson, Flook and Diehr and it will be interesting to see how the invitation from the Supreme Court to the Federal Circuit to develop "limiting criteria" to evaluate patentable subject matter is treated in future Federal Circuit cases.

A copy of the Bilski opinion is located here.