by Mark Malek 

As many of you already know, the United States Supreme Court has finally handed down its decision in the case of In re Bilski (Decision).  For some background on the Bilski case, please see my previous posts here and here.  The Court of Appeals for the Federal Circuit held that Mr. Bilski’s invention was not patentable.  In doing so, the Federal Circuit essentially did away with business method patents and pronounced the “machine or transformation” test for patentability.  

The Bilski Patent Application has Died

   The Supreme Court affirmed the Federal Circuit’s decision with respect to Mr. Bilski’s patent application, i.e., his invention is not patentable.  Mr. Bilski’s invention relates to a system for hedging risks in commodities trading.  Although the Supreme Court noted that the Federal Circuit’s decision was too restrictive, the Court still held Mr. Bilski’s invention to be unpatentable.  More specifically, the Court held that Mr. Bilski’s claimed invention fell into one of the three specific exceptions to §101 of the patent statute, finding that it was an abstract idea.  The other two exceptions are laws of nature and physical phenomena.   

In holding that the “machine of transformation” test is not the only test of patentability, the Supreme Court noted that the Federal Circuit erred by violating two principles of statutory interpretation:  Courts should not read into the patent laws limitations and conditions which the legislature has not expressed and that unless otherwise defined, words will be interpreted as taking their ordinary meaning.  Since Mr. Bilski’s invention was defined as a “process” the Court held that there is no meaning of process that would require Mr. Bilski’s invention to be tied to machine or to transform an article.   

Finally, the Supreme Court held that the term “process” does not exclude business methods as being patentable.  The Court specifically noted that it is not clear whether a business method exception would exclude technologies for conducting a business more efficiently.  Of course, that raises many questions for inventors and patent practitioners across the board.  It seems to me that it would be impossible to write a patent application that was not tied to machine or apparatus without it being an abstract idea.  After all, is that not what Mr. Bilski was trying to do?  The court does note that while §273 of the patent statute appears to leave open the possibility of some business method patents, it does not suggest broad patentability of such claimed inventions.  Therefore, the Court just let us all know that if you can somehow get a business method through the PTO, it had better be very narrow.  I suppose you have to question the value of such a patent, i.e., is a patent that can be very easily designed around very valuable?  In many cases, the answer can certainly be yes, but it is something that needs to be analyzed during the patent prosecution process.   

Probably the toughest part to swallow about this decision is that the debate over business method patents and, more than likely, software patents, is far from over.  This is evident in the last paragraph of the syllabus when the Court invites the Federal Circuit to develop other limiting criteria that further the Patent Act’s purposes and are not inconsistent with its text.  At the end of the day, this decision likely created more questions than answers, but at least we know that patent litigators will still be busy over the next few years trying to flush out that which is still patentable.  Stay tuned for some follow up articles on how the Patent Office is handling this decision.