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In re Bilski: What Constitutes a Statutory "Process" Under §101?

11-05-2008 [Ben Hanrahan] [Permalink]

On October 30, 2008, in an en banc decision, the Federal Circuit affirmed the Board of Patent Appeals and Interferences concluding that Bilski's claims directed to a method of hedging risk in the field of commodities trading is not patent-eligible subject matter under 35 U.S.C. §101. 

The Court adopted the two-branched "machine-or-transformation" test to determine whether a claimed process is patent-eligible under section 101.  Specifically, the Court explained that a process claim is patent-eligible if:

(1) it is tied to a particular machine or apparatus, or

(2) it transforms a particular article into a different state or thing.

In reaffirming that the "machine-or-transformation" test is the proper test to apply, the Court concluded that the "useful, concrete and tangible result test" previously articulated in State Street Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368 (Fed. Cir. 1998) is inadequate.

Additionally, the Court refused to categorically exclude software and business methods from patent eligibility - so long as the "machine-or-transformation" test is satisfied.  Particularly, in a footnote, the Court stated that:

although invited to do so by several amici, we decline to adopt a broad exclusion over software or any other such category of subject matter beyond the exclusion of claims drawn to fundamental principles set forth by the Supreme Court.

The entire en banc decision can be found here.