SUPREME COURT DECIDES BILSKI; RULES THAT BUSINESS METHODS SURVIVE

AIPLA Direct Flash Report

The Supreme Court on June 28, 2010, decided the long-awaited Bilski case, affirming the Federal  Circuit’s judgment. (Bilski v. Kappos, U.S., No. 08-964, 6/28/10).

The Court ruled that business methods are eligible subject matter under the law but declined to accept the Federal Circuit’s machine-transformation test as the exclusive test for the Section 101 determination. Most of the Court’s opinion (16 pages) is supported by 5 votes, and other parts are supported by only 4 votes.

Opinions concurring in the judgment were written by Justices Stevens (47 pages; Ginsburg, Breyer and Sotomayer joining) and Breyer (4 pages; joined in part by Justice Scalia). Justice Stevens concludes that business methods are not patentable.

The following language is supported by a majority of the Court:

“Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act’s text. The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr.

“And nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357. It may be that the Court of Appeals thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method pat-ents, including (but not limited to) application of our opinions in Benson, Flook, and Diehr. In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text.”
 
To read the opinion, click here:

<http://www.supremecourt.gov/opinions/09pdf/08-964.pdf>