Managing Intellectual Property

Federal Circuit clarifies test for business method patents

31 October 2008

Eileen McDermott, Chicago

In its eagerly awaited decision in In re Bilski, the US Court of Appeals for the Federal Circuit last month reaffirmed its finding in State Street that business methods are patentable in the same way as any other process or method, but rejected the “useful, concrete, tangible” test set forth in previous opinions

In a judgment that some see as the Federal Circuit's attempt to defer to the Supreme Court, after having had a number of its decisions reversed by the High Court in recent years, Chief Judge Paul Michel, writing the for a majority of the 12 judges, said (in a footnote): "Although invited to do so by several amici, we decline to adopt a broad exclusion over software or any other such category of subject matter beyond the exclusion of claims drawn to fundamental principles set forth by the Supreme Court."

These "fundamental principles" were defined in the opinion as "laws of nature, natural phenomena, and abstract ideas", the latter of which the Court said applied to the claims at issue in the Bilski invention.

The USPTO originally rejected Bernard Bilski's patent application for an invention relating to a method for hedging risk associated with a commodity sold at a fixed...



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