Case 13: Bilski v. Kappos (2010)
The point of the wording of patent laws is to provide a wide scope under which patentable inventions can fall. The Court has designated three exceptions to these principles: laws of nature, physical phenomena, and abstract ideas. Even if a claim is patentable, it still must be new, nonobvious, and fully disclosed. In determining whether a process is patentable, the "machine or transformation" test is not the only method. Doing so errs in two ways: it allows the court to put limits and conditions on the laws not actually disclosed in the legislation, and it does not interpret the meaning of the legislation in an ordinary, contemporary way. Saying that a process must be related to a machine or transformation of an article does not assign a normal, common meaning to the word "process." In addition, the use of the word "process" in 101 does not exclude all business methods from this protection. In fact, some of the verbiage implies that business methods may be patented: for instance, the permissible defense of prior use to argue against infringement implies that business methods may be patented. However, another section (273) explicitly states that business methods are included in the general definition of "method."
The claims at issue are simply not patentable. One claim is for hedging risk, and the other is for doing so in the energy market. Under many cases, neither claim is patentable. Some of the claims describe abstract ideas and the mathematical formulae that describe them; the rest indicate meager attempts to add to the abstract idea by explaining hedging and how certain pertinent information may be determined. This required no new rulings or interpretations on the Court's part: the prior rulings and the wording of 101 serve to effectively preclude the claims in this case. Though the machine-or-transformation test has been shown not to be a definitive test, the Court does not take issue with the Federal Court attempting to define a test so long as it does not contradict the laws or prior rulings.
The CAFC ruled that the invention was unpatentable because it was not tied to a machine and produced no tangible change or result. Three judges dissented, offering different opinions as to why the matter was unpatentable. One said that the patent was for a method of conducting business and called for a new technological standard. Another would have ruled that the claims were abstract ideas. The third disagreed that the patent was outside the scope of 101, but did not say the process was patentable; she recommended more proceedings to determine its patentability given other restrictions.
As innovation drives technology and business forward, it becomes necessary to redefine patentability and processes to reflect modern interpretations of such terms. Outdated language could well have precluded all computer programs from being patentable; however, updates necessarily move the law to keep up with the state of the art. The perennial challenge of patent law becomes more difficult: the Information Age has enabled more and more individuals to innovate and seek compensation for their efforts. Thus, the problem arises once again: where should the line be drawn between encouraging innovation and discouraging monopolies?