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The Supreme Court’s Bilski Decision

The “Bilski” patent application claimed risk hedging, particularly as applied to energy markets. The Board of Patent Appeals rejected the claims as an abstract idea, and Bilski appealed to the Federal Circuit. In an en banc hearing, the Federal Circuit held that Bilski’s claims were not patent-eligible subject matter, in view of their newly articulated bright-line test. That test held that a “process” claim (method) was patent eligible subject matter only if (1) the process was tied to a particular machine or (2) the process transformed a particular article into a different state or thing.

The Supreme Court granted cert on Bilski last year and issued its opinion on Monday. At a glance, the opinion:

  1. rejected the machine-or-transformation test as the sole test for determining whether an invention is a patent-eligible process;
  2. rejected Bilksi’s claims as “abstract ideas,” which have never been eligible for patent protection; and
  3. noted that at least some types of business methods constitute subject matter that is at least eligible for patent protection.

While the Court did not offer its own test for determining subject-matter eligibility, it did contrast the non-eligible subject matter at issue in its Flook decision (Parker v. Flook, 437 U. S. 584, 588–589 (1978)), with the patent-eligible subject matter at issue in Diehr (Diamond v. Diehr, 450 U.S. 175 (1981). In Flook, the applicant’s claims were directed toward monitoring a catalytic conversion process (petrochemical), where the application’s innovation was reliance on a mathematical algorithm. In Diehr, in contrast, according to the Court, the applicant in Diehr claimed a previously unknown method for molding raw, uncured rubber into cured precision products. While the method included the application of a mathematical formula to complete certain steps, the Court characterized Diehr as an industrial process for the molding of rubber products.