Yar Chaikovsky McDermott business method patents trudge on
In re Bilski: business method patents trudge onBy Yar Chaikovsky, McDermott Will & Emery partnerand Paul Devinsky, McDermott Will & Emery partnerand Eric M. Shelton, former McDermott Will & Emery associateOn the last day of its October 2009 term, more than seven months after oral argument, theSupreme Court of the United States issued its decision in In re Bilski. Justice Kennedy deliveredthe majority opinion affirming the U.S. Court of Appeals for the Federal Circuit’s decision thatBilski’s claims, directed to a method of managing risk in connection with commodity hedging,were not eligible for patenting under Section 101. However, the majority declined to hold as ageneral rule that business method patents (BMPs) were, as a class, unpatentable subject matter,and reversed the Federal Circuit’s ruling that “machine or transformation” was the “sole test” forpatent eligibility. Rather, the Supreme Court reiterated a broad view of patent-eligible subjectmatter tempered by long-established exclusions for “laws of nature, physical phenomena andabstract ideas” although it declined to further define what constitutes a patent “process.” TheSupreme Court also explained “machine or transformation” was never intended to be anexhaustive or exclusive test, but only a “clue” as to what might be patentable subject matter.In rejecting a categorical exclusion for business methods under Section 101, the majority notedthe broad language of the section “may include at least some methods of doing business.” CitingSection 273 of the Patent Act, the Supreme Court found that Congress had endorsed businessmethods as patent-eligible subject matter when it enacted a prior user defense to such patents.The court did not endorse broad patentability for business methods, but noted “the possibilitythat there are at least some processes that can be fairly described as business methods that arewithin patentable subject matter under §101.”In rejecting the Federal Circuit’s “machine or transformation” test as the exclusive test for patenteligibility for process claims, the Supreme Court found that the test imposed limitationsinconsistent with the broad text, purpose and design of Section 101. Courts “should not read intothe patent laws limitations and conditions which the legislature has not expressed.”As for Bilski’s claims, relying on Benson, Flook and Diehr, the Supreme Court concluded theclaims are directed to an “abstract idea,” and ineligible for patenting on that basis. The courtindicated that the claims sought “a monopoly over an abstract idea,” and that other claimsmerely added “token postsolution components” that failed to establish patentability.A concurrence written by retiring Justice Stevens, in which Justices Ginsburg, Breyer andSotomayor joined, would have excluded business method patents altogether. These four justicesargued that “a general method of engaging in business transactions” should not be considered apatent-eligible process. Breyer also wrote a concurring opinion, in which Justice Scalia joined inpart.Yar Chaikovsky is a partner in the law firm of McDermott Will & Emery where he focuses onintellectual property litigation for some of the biggest names in the technology field. Check outmore about him at Yar Chaikovsky McDermott.