Supreme Court rules on process patentability tests The question of the appropriate test for determining whether a business method or similar process is patentable finally made its way to the U.S. Supreme Court this year. But anyone hoping for a bright-line rule is in for a letdown. On hearing the case of Bilski v. Kappos, the Court refused to hold the machine-or-transformation test put forth by the U.S. Court of Appeals for the Federal Circuit in 2008 as the sole test for patentability of a business method claim, but failed to adopt a firm rule regarding process patents. The test case The plaintiffs filed a patent application for a method of hedging the risk of price changes in the field of commodities trading. The relevant claims describe a series of steps instructing how to hedge risk, placing the concept into a simple mathematical formula. The Federal Circuit had held that the machine-or-transformation test is the sole test for determining whether such a claimed process is patentable under Section 101 of the Patent Act. Under the test, an invention is a “process” if it’s tied to a particular machine or apparatus, or if it transforms a particular article into a different state or thing. The Federal Circuit’s decision in Bilski rejected its earlier State Street test, which required a patentable invention to produce only a “useful, concrete and tangible result.” The failed test The Supreme Court unanimously affirmed the Federal Circuit’s holding that Bilski’s invention wasn’t patentable. But it also unanimously decided the machine-or-transformation test is not the sole test for patentability for a process. The consensus ended there, though, as evidenced by three separate opinions in the case that the Court produced. In the majority opinion, written by Justice Kennedy, the Court noted that the Patent Act specifies four categories of patentable inventions:
Over the years, the Supreme Court has ruled that laws of nature, physical phenomena and abstract ideas aren’t patentable. Justice Kennedy went on to hold that, while the machine-or-transformation test may be a useful and important clue as to the patentability of a process, it isn’t the sole test. He explained that, because there is no common meaning of “process,” the test would have to be inextricably tied to any machine or the transformation of any article, and previous Supreme Court cases make clear that the test was never intended to be quite so exhaustive or exclusive. Kennedy’s opinion stopped short, however, of endorsing the Federal Circuit’s prior tests, including State Street. In fact, in the two concurring opinions, five justices argued strongly against State Street. Methods pass, sometimes Kennedy’s opinion also held that the Patent Act doesn’t categorically exclude business methods from patentability. He cautioned that the language of the statute doesn’t suggest broad patentability of business methods. Rather, he found that the statute leaves open the possibility that at least some processes that can be fairly described as business methods are patentable. In an accompanying opinion submitted by three other justices, however, now-retired Justice Stevens disagreed. He asserted that a business method isn’t a patentable process. In the end, the proper test for patentable processes proved irrelevant to the invention at issue. The full Court agreed that the invention was an unpatentable abstract idea. Over the threshold Despite the Supreme Court’s disapproval of the machine-or-transformation test, it may nonetheless be wise to draft patent claims with this test in mind, at least until other acceptable tests are devised. In the wake of the Court’s decision, the U.S. Patent and Trademark Office has instructed its examiners that a claim is unpatentable in the absence of clear indication that the claim isn’t an abstract idea. Thus, satisfying the test may at least get a claim over the threshold and into patentable territory. • |