Adopting the machine-or-transformation test as the sole test for what constitutes a “process” (as opposed to just an important and useful clue) violates these statutory interpretation principles. Section 100(b) provides that “[t]he term ‘process’ means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.” The Court is unaware of any “‘ordinary, contemporary, common meaning,’” Diehr, supra, at 182, of the definitional terms “process, art or method” that would require these terms to be tied to a machine or to transform an article. (pp.6-7)

The Court further held:

This Court’s precedents establish that the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible “process.” (p.8)

The Court left the door open for the Federal Circuit Court of Appeals to create a limitation consistent with §101:

Indeed, if the Court of Appeals were to succeed in defining a narrower category or class of patent applications that claim to instruct how business should be conducted, and then rule that the category is unpatentable because, for instance, it represents an attempt to patent abstract ideas, this conclusion might well be in accord with controlling precedent. See ibid. But beyond this or some other limitation consistent with the statutory text, the Patent Act leaves open the possibility that there are at least some processes that can be fairly described as business methods that are within patentable subject matter under §101. (p.12)

It is clear from a reading of the opinion that all of the members of the court agreed on two points: (1) Bilski’s patent application was unpatentable because it claimed an abstract idea; and (2) the Federal Circuit Court of Appeals exclusive reliance on the machine-or-transformation test in determining patent eligibility was incorrect.

The Court recognized that unlike the opinion delivered by the Federal Circuit Court of Appeals, judicial restraint was the best path to avoid a broad impact of unforeseen consequences:

Rather than adopting categorical rules that might have wide-ranging and unforeseen impacts, the Court resolves this case narrowly on the basis of this Court’s decisions in Benson, Flook, and Diehr, which show that petitioners’ claims are not patentable processes because they are attempts to patent abstract ideas. Indeed, all members of the Court agree that the patent application at issue here falls outside of §101 because it claims an abstract idea. (p.13)

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. (p.16)

Based on my reading of the oral arguments from last November, the opinion delivered by the Court today is not a surprise.  It is, however, a welcome correction of the Federal Circuit Court of Appeals error in this case.

Here is a link to the Bilski v. Kappos transcript as provided by the Supreme Court on their website (click here for the source page).  Interesting quotes that jump out at me immediately are:

Justice Sotomayor:  “No ruling in this case is going to change State Street.” (page 30)

Chief Justice Roberts:  “Mr. Stewart, I thought I understood your argument up until the very last footnote in your brief. And you say this is not –simply the method isn’t patentable because it doesn’t involve a machine. But then you say but it might be if you use a computer to identify the parties that you are setting a price between and if you used a microprocessor to calculate the price. That’s like saying if you use a typewriter to type out the — the process then it is patentable. I — I — it — that takes away everything that you spent 53 pages establishing.”  (page 33)

One of my favorite exchanges was the discussion with Mr. Stewart, the Deputy Solicitor General, speaking on behalf of Kappos, regarding how the USPTO would have come out on the State Street Bank patent given the current proposed patent eligibility test.  (pages 43-46)  The conversation begins with the question from Justice Kennedy:

Justice Kennedy:  “How would you come out in the State Street case today, if all of the arguments were made under your test?”  (page 43)

The conversation proceeds to the logical conclusion of the machine-or-transformation test, wherein using a computer to carry out business method instructions would make eligible and otherwise ineligible process:

Justice Breyer:  “All you do is just have a set of instructions for saying how to set a computer to do it. Anyone can do that. Now, it’s a machine. So all the business patents are all right back in.” (page 46)

Finally, as Mr. Jakes (representing Bilski) notes in his rebuttal on page 51, “To speak briefly about the State Street Bank case that was a type of business method that was implemented on a machine. The Federal Circuit said it didn’t matter. They weren’t looking at whether it was in machine form or method form. Their reasoning would have applied the same either way, and to do otherwise would be to place form over substance. And in a sense, that’s what some of the transformation debate is about. It’s form over substance. Why should transformation be the key? The key should be: Is it a practical application of a useful result?”

Thank you Mr. Jakes.  You have very clearly stated a position I hope is adopted by the Supreme Court in their decision; to rely on the machine-or-transformation test is purely placing form over substance.

Much like the question presented in Bilski v. Doll, the Supreme Court is being asked to determine whether the method patent claims at issue satisfies the patent eligibility requirements of 35 USC § 101.  In Mayo v. Prometheus Labs., the method is generally directed to administering medication to a patient in an iterative process such that successive doses are adjusted based on the level of the drug determined to be in the patient.   The Mayo Clinic’s concern is that the patents claim observed correlations between patient test results and patient health, effectively preempting all uses of these naturally occurring correlations.  Conversely, the Federal Circuit Court of Appeals held the patents to be patent eligible based on the transformation that occurs in the patents’ administering and determining steps.

With Bilski set for hearing in a few weeks, and Mayo having filed for certiorari against Prometheus Labs, the Supreme Court has the opportunity to address the patent eligibility standards using more than just one practical example.  Having a greater number of examples on which to directly rule, gives the Court an opportunity to present a more refined a patent eligibility test.  For that reason, I hope the Supreme Court takes Mayo’s case.

There are two questions presented to the Supreme Court to decide, each having bearing on how business method patents will be treated in the future.

• The first is whether the Federal Circuit Court of Appeals (CAFC) “machine-or-transformation test” contradicts the US patent laws.  The machine-or-transformation test holds that in order to be eligible for patent protection, a process must be tied to a particular machine or apparatus or transform a particular article into a different state or thing.  By contrast, the patent statutes hold: “[w]hoever invents or discovers any new and useful process… or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 USC § 101 Previously the Court has declined to limit this provision beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”

• The second is whether the “machine-or-transformation test,” which may eliminate many or most business method patents, contradicts clear Congressional intent to provide for “a method of doing or conducting business” to be patented.  35 USC § 273

The specific language used by the Court for the questions presented can be found here.

Due to the importance of this case, the United States Patent and Trademark Office (USPTO) has created a web page for collecting information relevant to Bilski v. Doll, including the briefs.  http://www.uspto.gov/web/offices/com/sol/bilski.htm

If the Supreme Court affirms the decision of the CAFC, business method patents, particularly those of the kind typically filed to protect methods in e-commerce, financial transactions, etc. may be a thing of the past.  Conversely, if the Court overturns the CAFC, it may provide a new test for patent eligibility which may further clarify the landscape of business method patents.