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Supreme Court Rejects Rule Against Business Method Patents
29 October 2012
The United States Supreme Court has issued its long-awaited Bilski opinion, affirming the rejection of Bilski’s claims. The Court, by a narrow margin, refused to adopt a per se rule against business method patents, and held that the Federal Circuit’s “machine-or-transformation” test is not the exclusive test for patent eligibility of method or process claims. Thus, business methods still may be eligible for patenting if the claims are not directed to “abstract ideas,” says Brian McCormack, a partner with Baker & McKenzie in Dallas.
McCormack reports that the Court's 5-4 majority opinion cautioned that “courts should not read into the patent laws limitations and conditions which the legislature has not expressed” and held that the machine-or-transformation test may be an important clue, but that it is not the sole test for patent eligibility. Instead, he says, “the Court opined that the issue in determining patent eligibility of such cases is whether the claims are drawn to an ‘abstract idea.’”
The Court further rejected, by the same slim majority, the call for a per se exclusion of business methods as ineligible subject matter, he said.
“To the frustration of some practitioners, the Court did not announce any new test for patent eligible subject matter, instead pointing to the past Supreme Court precedents of Benson, Flook, and Diehr,” McCormack said. “This was the point hammered out in Judge Rader’s dissent in the en banc Federal Circuit decision, in which Judge Rader criticized the en banc Federal Circuit for not just simply stating that ‘Because Bilski claims merely an abstract idea, this court affirms the Board's rejection.’”
Given the Supreme Court's stamp of approval, and given that he is now the Chief Judge of the Federal Circuit, McCormack says the firm believes his thoughts on patentable subject matter will be extremely important and influential, citing Rader’s dissent in Bilski and his concurrence in Alappat.
“His opinions in those cases call for broad subject-matter eligibility, and accordingly given Judge Rader’s prescient call on the Supreme Court opinion and apparent endorsement by the court, we anticipate that when the Federal Circuit applies the ‘abstract idea’ test to specific technologies, Judge Rader’s thoughts will be particularly persuasive,” McCormack said. “Given his inclination toward broad eligibility, we therefore believe the door to patent eligibility may be more open, post-Bilski, than generally concluded elsewhere.”