View source for State Street Bank & Trust Co. v. Signature Financial Group, Inc. (JWB)

==The Case==
*District Court of Massachusetts grants summary judgment in favor of State Street, finding Signature’s (Boes’) patent (‘056) invalid under 35 USC 101, State Street Bank (plaintiff) appeals
*Patent: “Data Processing System for Hub and Spoke Financial Services Configuration”
**implements an investment structure which was developed for use in Signature’s business as an administrator and accounting agent for mutual funds
**facilitates a structure where mutual funds pool their assets in an investment portfolio
**provides the administrator advantageous combination of economies of scale in administering investments and tax advantages of partnership
*State Street negotiated with Signature for license to use its patented system, but when negotiations fell through, State Street brought a declaratory judgment action, asserting invalidity, unenforceability, noninfringement
*In some instances, a mutual fund administrator is required to calculate the value of the shares to the nearest penny within as little as an hour and a half after the market closes. Given the complexity of the calculations, a computer or equivalent device is a virtual necessity to perform the task

==Ruling==
*Claim 1, properly construed, claims a machine, namely, a data processing system for managing a financial services configuration of a portfolio established as a partnership
*It is of little relevance whether claim 1 is directed to a “machine” or a “process,” as long as it falls within at least one of the four categories of patentable subject matter, “machine” and “process” being such categories.
*“Mathematicla Algorithm” Exception
**Unpatentable mathematical algorithms are identifiable by showing they are merely abstract ideas constituting disembodied concepts or truths that are not “useful.” From a practical standpoint, this means that to be patentable an algorithm must be applied in a “useful” way
**he transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces “a useful, concrete and tangible result”-a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades.
*“Business Method” Exception
**District Court: “If Signature's invention were patentable, any financial institution desirous of implementing a multi-tiered funding complex modelled (sic) on a Hub and Spoke configuration would be required to seek Signature's permission before embarking on such a project. This is so because the '056 Patent is claimed [sic] sufficiently broadly to foreclose virtually any computer-implemented accounting method necessary to manage this type of financial structure.”
**assuming statement is true, it has nothing to do with statutory subject matter
*Court of Appeals reversed