Patentable Subject Matter Cases Bitlaw Summary and Analysis After a lapse of almost thirty years, the Supreme Court once again considered the issue of patentable subject matter in this Bilski v. Kappos decision. This page describes and contains the majority opinion, which starts below. The Stevens concurrence and the Breyer concurrence are found on separate pages.
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PDF version Syllabus NOTE: Where it is feasible, a syllabus headnote will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. The key claims are claim 1, which describes a series of steps instructing how to hedge risk, and claim 4, which places the claim 1 concept into a simple mathematical formula.
The remaining claims explain how claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand. The patent examiner rejected the application on the grounds that the invention is not implemented on a specific apparatus, merely manipulates an abstract idea, and solves a purely mathematical problem.
The Board of Patent Appeals and Interferences agreed and affirmed. The Federal Circuit, in turn, affirmed. Signature Financial Group, Inc.
Held: The judgment is affirmed. Chakrabarty , U. See Le Roy v. Tatham , 14 How. Diehr , U. United States , U. Finally, the Federal Circuit incorrectly concluded that this Court has endorsed the machine-or-transformation test as the exclusive test.
Recent authorities show that the test was never intended to be exhaustive or exclusive. See, e. Flook , U. Nor is it clear what a business method exception would sweep in and whether it would exclude technologies for conducting a business more efficiently. By allowing this defense, the statute itself acknowledges that there may be business method patents. A contrary conclusion would violate the canon against interpreting any statutory provision in a manner that would render another provision superfluous.
See Corley v. Petitioners seek to patent both the concept of hedging risk and the application of that concept to energy markets. Under Benson , Flook , and Diehr , however, these are not patentable processes but attempts to patent abstract ideas. Claims 1 and 4 explain the basic concept of hedging and reduce that concept to a mathematical formula.
This is an unpatentable abstract idea, just like the algorithms at issue in Benson and Flook. They add even less to the underlying abstract principle than the invention held patent ineligible in Flook. The appeals court may have thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents.
Kennedy, J. Roberts, C. Stevens, J. Breyer, J.
Bilski v. Kappos
Bilski v. Justice Kennedy authored the majority opinion. Justices Breyer and Stevens both wrote concurring opinions. Business as Usual: In general, the opinion offers no clarity or aid for those tasked with determining whether a particular innovation falls within Section The opinion provides no new lines to be avoided. Rather, the outcome from the decision might be best stated as "business as usual.
Editor's Note :
The patent application claims a procedure for instructing buyers and sellers how to protect against the risk of price fluctuations in a discrete section of the economy. Three arguments are advanced for the proposition that the claimed invention is outside the scope of patent law: 1 it is not tied to a machine and does not transform an article; 2 it involves a method of conducting business; and 3 it is merely an abstract idea. The key claims are claims 1 and 4. Claim 1 describes a series of steps instructing how to hedge risk.
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The patent application claims a procedure for instructing buyers and sellers how to protect against the risk of price fluctuations in a discrete section of the economy. Three arguments are advanced for the proposition that the claimed invention is outside the scope of patent law: 1 it is not tied to a machine and does not transform an article; 2 it involves a method of conducting business; and 3 it is merely an abstract idea. The key claims are claims 1 and 4. Claim 1 describes a series of steps instructing how to hedge risk. Claim 4 puts the concept articulated in claim 1 into a simple mathematical formula.