EB: BILSKI v. KAPPOS, 130 S.Ct. 3218 (2010)

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The Situation

Biliski applied for a patent on a "method of hedging risk in field of commodities trading in the energy market." The Patent Office rejected the claims; Patent office appeals board reject, as does federal appels court - Supreme Court grants Certiorari.

The Decision

The claims are not patentable under 35 USC 101 (the claims are not statutory subject matter).

The Reasoning

First Opinion
  • The "machine or transformation" test used by lower courts cannot be the sole test for statutory subject matter. The court holds that something not necessarily need to be tied to a machine or perform a transformation to be a "process" (although these characteristics may be good clues for determining the existence of a process)
  • Business methods are patentable (some already exist and there is protocol in regards to their infringement)
    • Nonetheless, the claims are not patentable because they describe an abstract idea
      • The invention would pre-empt the whole risk hedging field
      • Just because the claims are tied to use in the energy industry that does not mean they provide sufficient function (beyond abstract) to be patentable.

Concurring Opinion
  • The claims describe a method of doing business, and methods of doing business should not be patentable subject matter in light of historical law.
    • He cites numerous cases of how business methods have never been construed as within the scope of a patentable "process."

Second Concurring Opinion
  • Agrees with first concurring opinion, but just points out a few key aspects of the case.