The US 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 US Court ruled that business methods are eligible subject matter under US patent law but declined to accept the US Federal Circuit’s machine-transformation test as the exclusive test for the Section 101 determination.

To summarize, the US Supreme Court decision has the following implications :

a) business methods are patentable subject matter;

b) software is patentable subject matter; and

c) the Federal Circuit’s “machine-or-transformation” test is not the definitive.

While this decision means that it will likely be less difficult to procure software patents, we strongly recommended having claims in your patent application that cover computer systems and/or servers if you have a software aspect to your invention.

Most of the Supreme Court’s opinion (16 pages) is supported by 5 votes, and other parts are supported by only 4 votes.

The following language is supported by a majority of the US Supreme 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 full opinion, click here:

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

Please do not hesitate to contact us should you have any questions about the Bilski decision.

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