Bilski: Relief at Last

After much fretting and many weeks of puzzling delay, the Supreme Court has at last handed down an opinion for the Bilski case. For those of us who find legitimate merit in so-called "business method patents," I'm happy to announce that the decision seems reasonable and does not exclude business-related processes from patentable subject matter. Software patents in general appear to survive as well. There were concerns that the previous decisions that gave life to business method patents, such as State Street, would be completely struck down, but these decisions were not expressly rejected though also expressly not endorsed (the State Street test for patentability, i.e., that the invention "produces a useful, concrete and tangible result," was not upheld and may be dead, but business method patents are not excluded outright). The result, in my view, is no radical change other than clarifying that the machine-or-transformation test is not suitable as the sole test for determining patentable subject matter, a ruling that I think will be helpful to those who favor business method patents. It will probably be the default test for patentability, but failure to meet it is not necessarily fatal, and that's good news in my opinion. You can read the opinion at http://www.supremecourt.gov/opinions/09pdf/08-964.pdf.

Some excerpts:

Adopting the machine-or-transformation test as the sole test for what constitutes a “process” (as opposed to just animportant and useful clue) violates these statutory inter-pretation principles. Section 100(b) provides that “[t]heterm ‘process’ means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.” The Court is unaware of any “‘ordinary, contemporary, common meaning,’” Diehr, supra, at 182, of the definitional terms “process, art or method” that would require these terms to be tied to a machine or to transform an article....

The Court of Appeals incorrectly concluded that this Court has endorsed the machine-or-transformation test as the exclusive test....

This Court’s precedents establish that the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible “process.”...

As numerous amicus briefs argue, the ma-chine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medi-cine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals....

[T]he Patent Act leaves open the possibility that there are at least some processes that can be fairly described as business methods that are within patentable subject matter under §101.

Yes, we need limitations and must not allow business method claims to be too broad or counterproductive, but the Court wisely found that there is no reason to exclude them from patent protection. That's good news, in my opinion.

PatentlyO has also reported on the "business as usual" decision, as has IPWatchdog. Both are good reads.

I'd also like to recommend Deepak Malhotra's review of the Bilski decision. Thorough and clear.