Business Method Patents Survive Supreme Court, Bilski's Does Not

Lora Bentley

On the last day of its session and the last day before Justice John Paul Stevens retires, the U.S. Supreme Court handed down several significant decisions.


According to The Wall Street Journal, one extended the Second Amendment right to bear arms to the states. Another found the Public Company Accounting Oversight Board could keep operating, but only if the Securities and Exchange Commission had unfettered power to fire its members. In still another, the high court decided that business methods are indeed patentable, but the particular method at issue in the case was too abstract to be patented.


Understandably, it's the patent law decision that's of most interest to us because software patents are business method patents. There was some question after the U.S. Court of Appeals for the Federal Circuit struck down Bilski's patent that the Supreme Court would use this opportunity to further restrict business method patents generally. That, of course, could have meant an end to software patents.


But that's not what the court did. Here's the scoop, from Wall Street Journal blogger Ashby Jones:

[T]he Supreme Court held that the "machine-or-transformation test," was not the proper one to apply to business-method patents....Okay, so what sort of limiting principle should lower courts attach to patent-application review? The Supreme Court on Monday didn't offer up a new one. Rather, it fell back on an old principle which bars the patenting of abstract ideas.

Justice Anthony Kennedy, writing for the majority, said, in part:

[T]he Court resolves this case narrowly on the basis of this Court's decisions in Benson, Flook, and Diehr, which show that petitioners' claims are not patentable processes because they are attempts to patent abstract ideas.

As for what that means going forward, Goodwin Procter partner Stephen Schreiner offered the following in an e-mail:

The Court launched the United States patent system into the Information Age with the Bilski v. Kappos decision today. Rejecting the chorus from some demanding the patent system be limited to Industrial Age technology, the Court answered with a flat "no," finding patents are available for software, business methods, medical diagnostic techniques, and other products of the Information Age. In sum, everything is "up in the air" again.


So basically, we're back to square one.


UPDATE: Per his request, we have removed Lowenstein Sandler member Mark Kesslen's comments about the case from this post.

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Add Comment      Leave a comment on this blog post
Jun 29, 2010 8:25 AM Jeff Yablon Jeff Yablon  says:

Hi, Lora.

I'm back at it from my layperson's "wassup with software patents?" position, so:

While the Court did specifically say that the machines issue shouldn't apply, HERE, they kinda non-stated that the machines should be what counts.

Meaning they said . . . nothing. Yikes.



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