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  • Writer's pictureCassandra L. Wilkinson

Supreme Court Considers Business Methods

The United States Supreme Court recently issued a much-anticipated decision in the case Bilski v. Kappos, 561 US ___ (2010). The Court held that business methods are not categorically excluded from patent protection, and that the machine-or-transformation test is not the sole test for determining patent eligibility of a process.
In Bilski, the petitioner sought patent protection for a method of hedging risk in the energy market. The USPTO rejected the application, finding that the invention involved only mental steps that do not transform physical matter, and therefore was unpatentable. The United States Court of Appeals for the Federal Circuit affirmed this decision, holding that a process is patentable only if “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” This machine-or-transformation test replaced the previous standard of allowing patents for processes only when they produce a “useful, concrete, and tangible result.”
The Court affirmed the Federal Circuit’s decision that the petitioner’s invention was unpatentable, but rejected the notion that the machine-or-transformation test is the only test for determining whether a process is patentable. Rather, the Court held that “the machine-or-transformation test is merely a useful and important clue, an investigative tool, for determining whether some claimed inventions are [patent-eligible] processes.” In rejecting the machine-or-transformation test, however, the Court did not set forth a new test for determining patentability of a process.
Justice Kennedy delivered the opinion of the Court, except for certain parts. Chief Justice Roberts and Justices Thomas and Alito joined the opinion in full and Justice Scalia joined except for certain parts. Justice Stevens filed an opinion concurring in the judgment. Justices Ginsburg, Breyer, and Sotomayor joined Justice Steven’s opinion. Justice Breyer filed an opinion concurring in the judgment, which Justice Scalia joined as to part. Thus, while the judgment was unanimous, no single opinion was joined in full by a majority of the Justices.
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