Long-Awaited Bilski Decision Handed Down By The Supreme Court
The long-awaited Bilski decision came down yesterday from the Supreme Court, affirming the Federal Circuit's judgment.
The Court ruled that business methods are eligible subject matter for a patent but declined to accept the Federal Circuit's machine-transformation test as the exclusive test for what is eligible subject matter for a patent under 35 U.S.C. § 101. The Court also rejected the contention that business methods are categorically excluded from patentability. Per Justice Kennedy writing for the majority:
"The concept of hedging, described in claim 1 and reduced to a mathematic
al formula in claim 4, is an unpatentable abstract idea,just like the algorithms at issue in Benson and Flook. Allowing petitioners to patent risk hedging would preempt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea."
"This Court’s precedents establish that the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible 'process.' "
The Court's rationale was in part based upon the progression of technology from the industrial age to the current information age:
"The machine-or-transformation test may well provide a sufficient basis for evaluating processes similar to those in the Industrial Age -- for example, inventions grounded in a physical or other tangible form. But there are reasons to doubt whether the test should be the sole criterion for determining the patentability of inventions in the Information Age."
The take away from the case is what we've known all along -- stay away from claims that merely claim abstract ideas or are solely directed to mathematical algorithms. And look forward to more guidance from the Federal Circuit in future cases.
See Court opinion (pdf).
The Bilski patent application (see U.S. Appl. No. US2004/0122764.pdf) sought 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.
http://www.oregonpatentlitigation.com/admin/trackback/208848
