News Item
Supreme Court Bilski ruling means business as usual for business method patents
28 June 2010
The US Supreme Court has today handed down its long-awaited opinion on the much-followed Bilski v Kappos case. The case concerns a patent application for a business method for hedging risks in commodities trading. The Supreme Court, as expected, affirmed the decisions of lower courts in ruling Bilski’s claims to be too abstract to be eligible for a patent. However, the real interest in the case arose from the possibility that the Supreme Court might take this opportunity to radically limit the scope of what may or may not be patented in the US, with some expecting a clampdown on business method and software patents.
In the event, the Supreme Court has refused to alter the scope of what may or may not be patentable, citing current law and precedent as adequate guides. Furthermore, the ‘machine-or-transformation’ test, widely used in the US as a threshold test for patentability, has been rejected as a catch-all criterion for patentability.
Dr. John Collins, Partner at Marks & Clerk, comments:
“In effect, today’s long overdue opinion from the Supreme Court has thrown the doors wide open for business method patents in the US. The opinion is surprisingly conservative, given that many in the industry and legal profession were expecting radical change and guidance to the limits of patentability. Remarkably, what has actually happened is that the Supreme Court has potentially broadened the path to patentability in the case of business method patents by rejecting the commonly used ‘machine-or-transformation’ test. Whilst the opinion states that this test provides ‘a useful clue’ to patentability, it makes explicitly clear the possibility that a claim may fail this test and still be eligible for a patent.
“As such, the test of when a business method can or cannot be patented is now more ambiguous than it was this morning. The Supreme Court opinion has re-centered the issue around the notion of whether or not a patent claim concerns an essentially ‘abstract’ process. This will likely lead to increased uncertainty among industry professionals and practitioners; we will have to wait and see where the lower courts and the patent office take this. The floodgates have been opened, but it is far from clear yet where the waters will settle.”
A more detailed analysis of this case will follow. In the meantime, contact your usual Marks & Clerk attorney or John Collins at jcollins@marks-clerk.com.