Federal Circuit Enforces Limit on Business Method Patents
In re Bilski, the most chatted-about patent case in recent memory, came down the pipe today at the U.S. Court of Appeals for the Federal Circuit. (Click here for a copy.) The court, in affirming the Board of Patent Appeals and Interferences' rejection of Bernard Bilski's claims, waded into the foggy territory of assessing the patentability of business methods, such as financial models, contract provisions, insurance policy features, and the like.
The result: While the court did not categorically exclude business method patents, it held fast the idea that any method, whether business-related or not, must be tethered to a machine or some sort of physical transformation, says Stephen Maebius, a partner at Foley & Lardner.
Maebius points to a key passage in the majority's 32-page opinion, in which the court reaffirms "that the machine-or-transformation test, properly applied, is the government test for determining patent eligibility of a process under Section 101."
The court, sitting en banc, heard argument in May. (Click here for Legal Times' coverage.) Nine of the court's 12 members supported the majority opinion. At issue, or at least the issue patent lawyers everywhere hoped the court would address, were the patentability tests for a method or process constructed in the Federal Circuit's 1998 decision in State Street Bank & Trust Co. v. Signature Financial Group Inc. and in the Supreme Court's 1981 decision in Diamond v. Diehr.
The Federal Circuit's opinion guts neither, but Chief Judge Paul Michel, who authored the opinion, hinted that the machine-or-transformation test may need overhauling as new technologies emerge. "Thus we recognize that the Supreme Court may ultimately decide to alter or perhaps even set aside this test to accommodate emerging technologies. And we certainly do not rule out the possibility that this court may in the future refine or augment the test or how it is applied," Michel wrote.