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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-ortransformation
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:
1. Processes,
2. Machines,
3. Manufactures, and
4. Compositions of matter.
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. need a loan fast with bad credit bad credit personal loans for