Business Methods are Patentable

The US Supreme Court issued its anxiously awaited ruling in the case of Bilski vs Kappos yesterday. The case dealt with the allowability of business method patents in the USA and received an inordinate amount of publicity.

On 30 October 2008 the first Bilski decision was issued from the Federal Circuit in the USA. The court held that a method (or process) is patentable only if it:

  1.  is tied to a particular machine or apparatus; or
  2.  transforms a particular article into a different state or thing.

The above is conveniently referred to as the “machine-or-transformation test”.

The US Supreme Court has now found that the Bilski machine or transformation test is a valid test but is not the only way of determining whether a business method patent is allowable or not.

The court did not go on to outline other tests which could be used but stated that business methods were certainly not excluded from being patented as long as they were not simply abstract ideas (incidentally, the subject matter of the Bilski invention itself was found to be an unpatentable abstract idea and therefore rejected).

The next step will be to see how the US Patent Office is guided by this judgment and implements it practically including developing other tests for these kinds of inventions.

It goes without saying that the pro-free software and anti-business method camps will be disappointed by the judgment. Many have also criticised the judgment for not setting out a definitive test to end the debate once and for all.

Others have praised the decision as taking a “measured middle ground”.

In any event, it will be appreciated that this area of law is very difficult to navigate not only due to the complexity of the law but also due to the ever changing legal landscape. The message to inventors of software and business methods who are interested in obtaining IP protection remains - check with your local patent attorney if you are interested in securing your rights to prevent others from copying you before you disclose your invention to the public in any way.

Should you require any further information in this regard please contact the author Lance Abramson on or +27 11 994 5111.

Date published: 2010/06/30
Author: Lance Abramson

Tags: Business method patent us supreme court