Supreme Court of the United States
Bernard L. Bilski and Rand A. Warsaw v. David J. Kappos, Under Secretary of Commerce for Intellectual Property And…
June 28, 2010
Summary
The Supreme Court affirmed the Federal Circuit's rejection of Bilski and Warsaw's patent application for a method of hedging risk in commodity and energy markets. It held that the machine-or-transformation test, though a useful and important clue, is not the sole test of whether an invention is a patent-eligible "process" under 35 U.S.C. § 101, and that business methods are not categorically excluded from § 101, noting that § 273 presupposes that some business method patents exist. Resolving the case narrowly under Benson, Flook, and Diehr, the Court concluded the claims attempt to patent the abstract idea of hedging risk, with the remaining claims merely limiting that idea to one field and adding token postsolution components. Justice Stevens, concurring in the judgment with Justices Ginsburg, Breyer, and Sotomayor, would have held business methods categorically unpatentable and faulted the Court's ordinary-meaning reading of § 101; Justice Breyer, also concurring in the judgment (joined by Justice Scalia as to Part II), agreed with Stevens and catalogued points of consensus.
Holding
- Whether the machine-or-transformation test is the sole test for determining whether an invention is a patent-eligible "process" under § 101.. No. The machine-or-transformation test is "a useful and important clue, an investigative tool" for determining whether some claimed inventions are processes under § 101, but it is not the sole or exclusive test.
- Whether § 101 categorically excludes business methods from patentable subject matter.. No. Section 101 does not categorically exclude business methods; the Patent Act leaves open the possibility that at least some processes fairly described as business methods are within patentable subject matter.
- Whether petitioners' hedging claims are patentable processes under § 101.. No. Claims 1 and 4 attempt to patent the abstract idea of hedging risk, and the remaining claims merely apply that abstract idea to energy markets while adding well-known postsolution components; the application falls outside § 101 as claiming an unpatentable abstract idea.
Docket No. 08-964