by Mark Malek
Oral arguments before the United States Supreme Court In re Bilski were held on November 9, 2006. This case has been closely watched by the patent community because it can have some serious ramifications as to the type of subject matter that is patentable. The patent application filed by Bernard Bilski and Rand Warsaw is directed to a method of hedging risks in commodities trading. The Examiner issued a final rejection, noting that the invention was not directed to patentable subject matter, pursuant to Section 101 of Title 35, United States Code. Pursuant to 35 U.S.C. § 101, to be patentable, an invention must be directed to a “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”
The Applicants appealed the Patent Office’s decision to the Federal Circuit. The en banc Federal Circuit upheld the PTO’s decision and noted that patentable subject matter does not include “laws of nature, national phenomena, or abstract ideas.” The court went on to reiterate the “machine or transformation test” with respect to patentability. More specifically, patentable subject matter must be tied to a particular machine or apparatus, or it must transform a particular article into a different state or thing. Using that test, the Federal Circuit found that the method of hedging risks in commodities trading did not meet the requirements for patentability.