In re Bilski: Narrows the Scope of Patentable Subject Matter Yet By Utilizing Best Claiming Practices Business Method and Software Patents Survive
In a recently issued en-banc decision, In re Bilski, No.2007-1130 (Fed. Cir. Oct. 30, 2008), the Federal Circuit articulates a “machine-or-transformation” test, which resets the precedent for “method” patents by about a decade relying on the Benson, Flook and Diehr cases and overruling State Street and AT&T. This decision directly impacts claiming strategies for business method and computer software patents. The Federal Circuit clarifies the standards for determining whether an invention encompassing a “method” qualifies as patentable subject matter under 35 USC §101 as that which is either (1) tied to a particular machine or apparatus, or (2) transforms a particular article into a different state or thing. Claims that are narrowly tailored enough to encompass a specific application of a fundamental principle, while not pre-empting others from practicing the fundamental principle itself, will succeed under this new standard. Whereas those claims that are directed to abstract processes will likely fail. The Bilski claims, which were decoupled from any machine, were given the death knell by the Federal Circuit as they ran afoul of the mental steps doctrine contained in the transformation prong of the Bilski test. Claims that may be performed entirely in the human mind, without apparent use of a machine and without transforming an article into a different state or thing, do not qualify as patentable subject matter.
Under the law established by the State Street case it used to be that claims for business methods or software processes were patentable if it could be show that what is claimed accomplished a “useful, concrete and tangible result.” In this recent ruling the Federal Circuit declared the State Street inquiry to be inadequate and reaffirmed that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply. Thus the case that ushered in the era of business method patents has been benched and is not expected by most legal scholars to be resurrected.
The true impact of the Bilski ruling on both pending applications and issued patents has yet to be felt, but the court made it clear that despite the naysayer’s business methods and software patent remain patentable. Under this new test, best practices for all pending patent applications is to conduct a thorough review of all method patents to determine if the claims will pass scrutiny under Bilski. While it remains unclear “what constitutes sufficient physical transformation or machine-implementation to render a process pantentable,” a review of the case law relying on the “machine-or-transformation” test that was first enunciated by the Supreme Court in the Benson case shows that the following basic principles should be adopted as best practices:
By drafting using one or more of these best practices claims directed to business methods and software patents remain patentable subject matter.
By: Daniel Cotman and Elaine Cruz
Tags: Bilski, Business Method Patents, Patent, Patentable Subject Matter, Software Patents
