U.S. Supreme Court Affirms Business Method Patents

By Pike, George H. | Information Today, September 2010 | Go to article overview

U.S. Supreme Court Affirms Business Method Patents


Pike, George H., Information Today


Even after the U.S. Supreme Court's long-awaited decision in the Bilski patent dispute, the viability of business method patents remains somewhat uncertain. In a complex and split decision released on the last day of the court's session, the Supreme Court affirmed the basic legality of business method patents. However, the court also rejected the specific business method patent that Bilski was pursing as an unpatentable "abstract idea."

Business method patents have come under increasing scrutiny in recent years. The U.S. Patent Act indicates the "processes)" can be patented, as long as they are nonobvious, novel, and can be particularly described. In recent years, the U.S. Patent and Trademark Office (USPTO) has granted patents to a number of methods of doing business that use a specific process, particularly those that involve computer technology. In granting a patent to a particular process for doing business, the patent award excludes anyone else from doing business in the same manner, otherwise they would be infringing on the patent. Critics of business method patents, particularly those in the e-commerce area, argue that they are often too broad, or are not novel, and rely less on technology and more on thought processes that are not patentable.

Bernard Bilski sought a patent on a method of hedging risk in commodities markets through a series of steps that collected and analyzed costs, weather reports, and economical and statistical data to predict a certain outcome. The patent application was rejected by the initial patent ex aminer as well as the Board of Patent Appeals and Interferences.

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On appeal, the U.S. Court of Appeals affirmed the rejection of Bilski's application but also determined that a business method patent required some form of "machine or transformation" as part of the process. Without a machine or transformation, business methods were not patentable. This decision was seen as a potential deathblow for business method patents since many of them do not use any kind of specific machine (using a computer to do calculations may not be considered a "specific" enough machine) or transform a particular article from one thing to another.

Bilski appealed this decision to the U.S. Supreme Court. In a series of overlapping opinions, the Supreme Court rejected the machine or transformation requirement, saying that, while the machine or transformation test was a "useful and important clue," the test could not be a condition or "sole test" for determining patentability. …

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