Bilski v. Kappos

Although Bilski's claims were held unpatentably abstract, the Supreme Court has re-affirmed that the door to patent eligibility should remain broad and open.

Bilski v. Kappos (Supreme Court 2010)(08-964)

The Supreme Court has issued its opinion in Bilski v. Kappos. In the decision, the Supreme Court affirmed that Bilski’s risk-management method was not the type of innovation that may be patented. However, rather than using the Federal Circuit's "machine-or-transformation test", the court simply relied on prior precedent to find the claimed method unpatentably abstract. Justice Kennedy authored the majority opinion. Justices Breyer and Stevens both wrote concurring opinions.

Business as Usual: In general, the opinion offers no clarity or aid for those tasked with determining whether a particular innovation falls within Section 101. The opinion provides no new lines to be avoided. Rather, the outcome from the decision might be best stated as "business as usual."

Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act’s text. The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr.

By refusing to state any particular rule or categorical exclusion, the Court has almost certainly pushed Section 101 patent eligibility to the background in most patent prosecution and litigation.

Business Methods: Section 101 does not categorically exclude business methods from patentability. Rather, the court noted that the prior-use defense found in Section 273(b)(1) of the Patent Act "explicitly contemplates the existence of at least some business method patents. . . . [B]y allowing this defense the statute itself acknowledges that there may be business method patents."
Software: Although the court expressly refused to rule on the patentability of software, it appears that software will largely remain patentable. At minimum, the decision would bar any categorical exclusion of software patents. The court neither endorsed nor rejected the Federal Circuit's past interpretations of Section 101 — Noting that "nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357."

Abstract Idea: The one thing that all nine justices agreed upon is that Bilski's method of hedging risk was not patentable because it is an abstract idea "just like the algorithms at issue in Benson and Flook."

 

The concept of hedging, described in claim 1 and reduced to a mathematical formula in claim 4, is an unpatentable abstract idea, just like the algorithms at issue in Benson and Flook. Allowing petitioners to patent risk hedging would preempt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea.

Petitioners’ remaining claims are broad examples of how hedging can be used in commodities and energy markets. Flook established that limiting an abstract idea to one field of use or adding token postsolution components did not make the concept patentable. That is exactly what the remaining claims in petitioners’ application do. These claims attempt to patent the use of the abstract idea of hedging risk in the energy market and then instruct the use of well-known random analysis techniques to help establish some of the inputs into the equation. Indeed, these claims add even less to the underlying abstract principle than the invention in Flook did, for the Flook invention was at least directed to the narrower domain of signaling dangers in operating a catalytic converter.

It is unclear to me how patent office examiners will be able to apply the test for abstract ideas in any meaningful way. I suspect that they will not. Rather, the best advice for the USPTO is to focus on Section II-A of Justice Kennedy's opinion. There, the opinion recognizes that Section 101 patent eligibility is "only a threshold test." To be patentable, the invention must also "be novel, see §102, nonobvious, see §103, and fully and particularly described, see §112."

What is the test?: 35 USC 101 offers patent protection for "any new and useful process, machine, manufacture, or composition of matter." Here, the focus was on the definition of a "process" because Bilski's patent application was written to claim a method of hedging risk. Although the majority opinion refused to define the term process, it did write that the machine-or-transformation test developed by the Federal Circuit does not define what is (and is not) a patentable process. Rather, the Court held that the machine-or-transformation offers "a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible process." As a "clue," the machine-or-transformation test likely correlates with the existence of patentable subject matter. However, some patent claims that fail the test will still be patentable and other patent claims that pass the test will still be ineligible.   

Read the Opinion

397 thoughts on “Bilski v. Kappos

  1. WCG that is what it appears that we have.

    But why o why wouldn’t Scalia tell us something about why he wanted to not join II-B-2 and II-C-2 and why him and the others didn’t put down a 5 man minority opinion on that part?

    I don’t know, it seems like that would be kind of odd procedurally… We would effectively have 2 majorities, one holding one way on a small part of the issues, the other holding another on a small part of the issues, and everyone agreeing as to result and the abstract idea basis therefore.

  2. Let me re-phrase:

    I think there is a majority opinion (Kennedy, Roberts, Scalia, Thomas, and Alito) in Bilski consisting of the following sections of the Kennedy opinion:

    Part I
    Part II–A
    Part II-B–1
    Part II-C-1
    Part III

  3. But that view is too simple, and the majority and minority disagree over the broader questions with Scalia throwing a monkey wrench into the whole opinion by not joining on to 2 keys parts but not telling us why.

    See, this is exactly why I said the law should not be determined by a case whose result does not hang in the balance. The fine distinction between two tests that both kill the patent in suit is not a point likely to be well-argued by the parties.

    At least let the Supremes pronounce on a 101-eligible non-MOT claim (that seems to be the boundary), so we can compare the “abstractness” of our claims to that case.

  4. What I think we have is a 5-4 majority for the following Sections of the Kennedy opinion:

    Part I
    Part II–A
    Part II-B–1
    Part II-C-1
    Part III

  5. “”If you think that Stevens, Ginsberg, Breyer, and Sotomayer did not sign onto the Kennedy opinion, think again.””

    Actually let me amend my comment in response to this comment. Context was lacking when last I read it.

    What I should have said was, no, they did not concur with the reasoning given in the opinion at all, especially, one would believe II-B-2 and II-C-2 since those sections go directly against what Stevens et al. would hold. They only agreed with the result and that was because clearly everyone agreed the thing was directed to an abstract idea. That is to say, the only things the majority and minority are in agreement on is that the claim was directed to an abstract idea. Basically, everyone agrees with Rader’s simplistic view, as do I and probably nearly everyone in the universe. But that view is too simple, and the majority and minority disagree over the broader questions with Scalia throwing a monkey wrench into the whole opinion by not joining on to 2 keys parts but not telling us why.

  6. M. Diamond Resources, Inc.
    2355 Westwood Blvd. #555
    Los Angeles, Calif. 90064
    (310) 837-3537/(310) 202-7676

    URGENT MEMORAMDUM
    (Bilski vs. Kappos)

    To Whom It May Concern:

    Forward this email to any and all associates regarding our ability to suit the productivity needs of patent attorneys. Quoting Fenwick & West own public PDF postings @ link to fenwick.com, “Determine whether the claims recite a physical transformation or specific machine” Referencing this point, as you know our autonomous Computer Aided Software Engineering (CASE) abilities currently known as a publicly posted conceptual map @ http://www.molaah.com, utilizes molecular and genetic sciences or sequences to convert words, concepts and ideas into systems technologies, that also either in turn directly or indirectly support machine processing, shall eventually as in the words of Fenwick & West “Find support in existing applications for claim amendments to include machine or transformation elements.”

    Furthermore, as in the words of Fenwick and West, “For impacted products/services, examine patent protection for related aspects that will pass the machine or transformation test and file additional applications.” Our current structural abilities to replicate http://www.molaah.com into 11,465 global prototypes shall produce legal firms of the likeness of Intellectual Ventures @ link to intellectualventures.com . With immediate revenues almost guaranteed to be at the projected levels of $845M every 5 years for each one because of the uncertainty that the impending ruling of Bilsky vs. Kappos is bound to immediately create on a global scale. “Hey man it will be like nothing seen or heard of since the invention & testing of the atomic bombs.”

    Our 25 year research will without a doubt surpass the legal definition of the Machine-or-Transformation test even at the appellate levels, or even perhaps at the levels of the Supreme Court as far as future filings are concerned, when considering that a ruling against our products and services would equal the courts saying that any and all patents in the past that include molecular elements as they are defined through words, concepts and ideas are invalid as well when applied and protected in industry. The following attachments are source material for stating our case in client acquisition.

    As stated by the attorneys at Jones & Askew, LLP and Michael S. Pavento In CONCLUSION, “The State Street Bank decision has opened the floodgates for e-commerce companies to seek patent protection for their innovative models of conducting business via the Internet. Given the rapid growth of e-commerce opportunities, savvy companies have recognized that patents can serve as offensive and defensive tools for warding off competitors. In the on-line environment, patents enable a new company to establish a foothold in a marketplace, opening the door for licensing opportunities and the attraction of capital investments. Indeed, the competitive advantages provided by patents may be vital to the success of any company trying to enter the Internet marketplace. Accordingly, attorneys representing businesses throughout Georgia should be aware that patent rights are available for computer-implemented business models as well as innovative software technologies. Given the rapidly growing number of pending patent applications and issued patents relating to e-commerce, businesses conducting business on the Internet are wise to seek patent protection sooner rather than later. Otherwise, a more aggressive competitor may win the race to secure an on-line market niche based on a patented business model.”

    Take care and enjoy the fruits of life because it’s about to become abundant for us. As in the words of Rabbi Noson Weisz @ link to aish.com , “The world of bracha is necessarily a world of limitless generosity. The ability to draw on the inexhaustible source of blessing must be expressed in the form of benevolence toward others. For someone who has access to limitless blessings there is no such thing as not enough to go around for everyone. Whatever I give away can be immediately replaced by a fresh flow from the source.” Government revenue projections due to our intervention have yet to be determined beyond the annual $640B because of the lack of definitive references, but the information @ link to uspto.gov is a great starting point. This doesn’t include the markets for the WIPO filings using our technologies which are between $40-$120K for each one multiplied by mere global economic necessity.

    WEF

    cc:
    Using Genetics To Immediately
    Create 9.7 Million New Jobs

    Distinguished Members of Government and Society,

    We are representatives of a new and innovative corporation that utilizes genetics as a means of converting words, concepts or ideas into search engine or business modeling technologies and new global markets. The format in and of itself shall facilitate the firms of patent or copyright attorneys with the ability to acquire over 3,927 additional revenue streams, while also protecting the propriety rights of their clients both previous and current, as their material or new inventions are expressed through Internet technology bases.

    Foremost, since all 11,465 business models or revenue streams as a structural template or direct copy of http://www.molaah.com is capable of generating 847 new jobs each, our global approaches through the genetic application of technologies within the world-wide-web shall produce in this immediate era approximately 9,710,855 new sources of employment. Viewing the current global economic state of things here in America and elsewhere, we at http://www.molaah.com feel that the 25 yr. R&D project at our disposal might be of interest to you or any interested parties concerned.

    William E. Fields (310) 837-3537

    Please see, link to molaah.com and link to molaah.com

  7. Someone didn’t read the opinion just yet did they?

    Why read someone else’s opinion, when you already have your own?

  8. Why stop there? They’re applying for a patent, so surely they also have 101 and 112 beat.

    Posted by: IANAE | Jun 28, 2010 at 04:11 PM

    _________________

    They do now that the SCOTUS has ruled. Time to check into your airplane restroom, change back into your Mooney suit and start spewing anti homo remarks,

  9. “You Malcolm and 6 are intellectually beaten, bloodied, in denial and border line delusional.”

    LOLOLOLOL.

    Someone didn’t read the opinion just yet did they?

  10. bschmabo,

    “Kennedy’s opinion is joined by 5 justices, with the exceptions of parts II-B-2 and II-C-2. Thus, everything from the other sections of Kennedy’s opinion should be controlling.”

    How do you arrive at this? How do you arrive at the opinion that only Roberts, Thomas, and Alito the Kennedy opinion in full, of which Scalia joined except for Parts II–B–2 and II–C–2?

    Keep in mind the following NOTE at the top of the Syllabus:

    “The syllabus constitutes no part of the opinion of the Court but has beenprepared by the Reporter of Decisions for the convenience of the reader.”

  11. “If you think that Stevens, Ginsberg, Breyer, and Sotomayer did not sign onto the Kennedy opinion, think again.”

    No, they did concur in the result, and in the abstract idea concept, but they’d also give a big ol’ ban to business methods right straight up.

  12. Oh and:

    “With ever more people trying to innovate and thus seeking patent protections fortheir inventions, the patent law faces a great challenge instriking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of generalprinciples.”

    Lol wut? We’re now trying to not grant monopolies over procedures that others would discover by independent, creative application of general principles? Or do they mean abstract ideas?

  13. “Malcolm,
    You should take some comfort that “some” business method patents are eligible.
    Reading it another way, “most” are not.
    Posted by: West Coast Guy | Jun 28, 2010 at 12:58 PM”
    ______________

    Oh really? Name three?

    ::Silence::

    You Malcolm and 6 are intellectually beaten, bloodied, in denial and border line delusional.
    ____

  14. The following is printed on page 1 of the Kennedy opinion:

    “JUSTICE KENNEDY delivered the opinion of the Court, except as to Parts II–B–2 and II–C–2.*”

    To me, this means that all justices have signed onto this opinion. The absense of Stevens, Ginsberg, Breyer, and Sotomayer names suggests to me that they signed onto the Kennedy opinion.

    Since it is the opinion that counts, I have read the Kennedy opinion as including Stevens, Ginsberg, Breyer, and Sotomayer. Also, please note the NOTE at the top of ths Syllabus:

    “The syllabus constitutes no part of the opinion of the Court but has beenprepared by the Reporter of Decisions for the convenience of the reader.”

    If you think that Stevens, Ginsberg, Breyer, and Sotomayer did not sign onto the Kennedy opinion, think again.

  15. On the whole a very good decision. It allows me to use MoT when I please, as a “tool” to come to whatever conclusion it leads me to, but also the latitude to not have to make a 101 when the claim is clearly an old-fashioned manufacturing method even if it doesn’t have a very particular machine recited or have a transformation recited.

    Additionally, they expound a bit about the concept brought up in Benson dealing with abstract ideas and claims that attempt to cover them without reciting only specifically them explicitly. And that’s good, because many folks don’t really keep an eye out for those kinds of 101′s and they are valid every single time. Form should not save a claim that covers an abstract idea in total even though it be limited to some machine or transformation.

    The majority does use some language that, as Stevens suggests, if taken to extremes produces absurdities. It also uses language that does in fact seem to bless at least some “computer program” claims at least in so far as they are being claimed like they were in the manufacturing method in Diehr. Which is fine within reason.

    And perhaps one of the best things is that it grants us a view into the various opinions of the justices on the court and how they basically fall on the questions presented. We will have 3 judges that basically agree with Stevens on the issues (See especially the terms “art” and “Useful Arts”) and one more that agrees with Stevens on the business method exclusion. So there are 3 that are solidly on that side it would seem after Stevens leaves. The remaining justices seem to merely feel like there could be some remnant business methods that are patentable and decline to just categorically throw them all in the bin.

    Furthermore it does seem like the differences of opinion between the members of the court might in large part be due to the imprecision of language and in how each member views the term “business method”. It is perhaps the case that Stevens et al. take a more restrictive view of what would be a business method than that which their fellows adopt. In such a case it would seem that they are likely all in agreement save for imprecision in the language used. Sure, if one interprets “business method” hugely broadly then there are exceptions and the plain language of the statute compels us to not exclude it, but if one takes a restrictive view on that term then for all intents and purposes there is a ban.

    See:

    “Indeed, if the Court of Appeals were to succeed in defining a narrower category or class of patent applications that claim to instruct how business should be conducted, and then rule that the category is unpatentable because, for instance, it represents an attempt to patent abstract ideas, this conclusion might well be in accord with controlling precedent.”

    For this reason, if someone is planning to claim a business method that falls squarely into a strict definition of the term where the intent is really to preclude an abstract idea then they are likely facing the strict bar on patentability that the 3 justices would put into place though it has not yet so been held. I would look to the CAFC attempting to create one of these definitions of a narrow category in the future that will, for all intents and purposes include nearly all business methods.

    See further where the majority says:

    “But beyond this or some other limitation consistent with the statutory text, the Patent Act leaves open thepossibility that there are at least some processes that can be fairly described as business methods that are within patentable subject matter under §101.”

    Which is to say that under a hugely broad definition of business methods then surely there are some that are patentable.

    So we see here a great example of the judiciary holding no more than they are forced by the case at hand and reiterating things they’ve already stated. The case at hand required no more than what Rader suggested, the abstract idea rejection while at the same time showing how the justices feel on the issues.

    Overall I agree with the propositions made, and while I’d probably personally just say “heck with it” and throw in all “business methods” I can see where the majority is coming from. Indeed there are methods, such as a method of stacking milk jugs which I’d heard about a few years ago, that would certainly be considered a business method, but it doesn’t really fit within a narrow definition of the term that would deal strictly with the buying and selling of goods. I would be fine with such methods being patentable, so long as the ones that are within the more strictly bound definition are done away with eventually. And that’s even considering the ridiculousness of such patents and the shame brought upon the patent system by such granting. In the current state of the law small steps are needed to reestablish the reputation of the profession until someone takes some initiative and statutorily solves the problem. The majority allows for this to take place.

    Oh and finally the USSC makes it clear that it doesn’t endorse the ridiculousness in SS. I can’t believe that practicioners latched on to that nonsense for so long. They will be justly rewarded for their trouble with a great heap of worthless patents.

    All this btching in this thread about examiners or practicioners (or presumptively your local art students either) not knowing how to spot an abstract idea or be able to determine when a claim is attempting to cover an abstract idea is misplaced. First, it isn’t rocket science to observe an abstract idea being claimed. If anyone is having trouble understanding what the term “abstract” or “abstract idea” is then they should head down to their local university for a class in art where they will teach you, quite specifically, what the terms mean and how to spot such in your day to day. If you can’t understand after that class then just quit patent law because you’re worthless. Second, while it is marginally more difficult to spot one that is being hidden in a tradition claim’s clothing (ala Benson) it is manageable and, though some will be overlooked accidentally that isn’t the end of the world. After all, the DC’s can cipher them out.

    The one thing to btch about is that the majority didn’t explain its own abstract idea analysis very well in this particular decision.

    The one thing I don’t understand about the decision though is why the 3 justices that joined Stevens and Stevens himself wouldn’t all have joined in the part that Scalia joined Breyer in. If they had done so wouldn’t the majority have had to include that in the decision? And wouldn’t Stevens have wanted that part in there even if he couldn’t get all his way? Plus, why doesn’t Stevens et al. join whatever Scalia wants to put in for IIB2 and II-C-2 so as to foreclose the majority from writing what they want? I wish we had a piece by Scalia putting down what he thought on those portions and a piece from Stevens stating why he doesn’t simply join Scalia and change the “worst” parts of this decision.

    In other words, we have Kennedy, Roberts, Thomas, Alito, and Scalia in the majority and Stevens, Ginsburg, Breyer, and Sotomayor in the minority. Why wouldn’t the minority simply band together with Scalia to get rid of II-B-2 and II-C-2?

  16. The PTO can reject your claim under 101 for being abstract as long as it fails MOT, and ask that you amend or argue for its eligibility under MOT or otherwise. Good luck successfully arguing under “otherwise”.

    Posted by: IANAE | Jun 28, 2010 at 04:04 PM

    ——–

    exactly as I suggested earlier – if an examiner has any doubt at all, they’ll make the 101 to shift the burden to you to prove it wrong – that’s going to be the grounds for more appeals in the future that work up to SCOTUS for further development of the law (in theory)

  17. Actual Inevntors already have 102 and 103 beat from the beginning or they would not be applying for a patent.

    Why stop there? They’re applying for a patent, so surely they also have 101 and 112 beat. Why bother examining patents at all? The mere fact that an application has been filed is proof enough that a patent should be granted.

    Makes you wonder why we have all this prosecution and litigation, doesn’t it?

  18. Isn’t this just a 5-4-2 opinion?

    Kennedy’s opinion is joined by 5 justices, with the exceptions of parts II-B-2 and II-C-2. Thus, everything from the other sections of Kennedy’s opinion should be controlling.

  19. “Did the Stevens opinion really go along with the Kennedy opinion? Did the Stevens+3 sign onto the Kennedy opinion?

    Posted by: West Coast Guy | Jun 28, 2010 at 03:54 PM”

    In a word, no. Stevens and the other 3 only concurred in the judgment–i.e., they agreed with Kennedy + 4 that Bilski’s application was correctly rejected on 101 grounds. Beyond that, the two groupings do not agree as to what s101 means.

  20. Business methods check in, but they don’t check out.
    Posted by: IANAE | Jun 28, 2010 at 11:57 AM
    ___________

    In your anti patent dreams. Actual Inevntors already have 102 and 103 beat from the beginning or they would not be applying for a patent. It’s 101 that was the real threat to business methods.

    And since the SCOTUS did not eliminate business methods as patentable subject matter the path is clear for smart inventors everywhere to get their patents. Let the unjamming of the back log begin!

  21. AI: There is still the Deihr test which I have used for the years to annihilate the likes of MM, 6, West Coast Guy and other anti patent posters on this blog.

    It’s pretty safe to say you haven’t successfully en-Diehr-ed yourself to very many people on this blog.

  22. If M-O-T is not the exclusive test of 101 eligibility, then it cannot be used to prove that a claim is ineligible. So I don’t see why the PTO would be interested in using it – it doesn’t help them exclude anything.

    Sure it does. The current legal test is “passing MOT makes it patentable, and failing MOT makes it not patentable if it kinda sorta seems abstract”.

    The PTO can reject your claim under 101 for being abstract as long as it fails MOT, and ask that you amend or argue for its eligibility under MOT or otherwise. Good luck successfully arguing under “otherwise”.

  23. I thought the majority opinion was pretty good.
    It avoided a bright line rule. It also explicitly rejects a broad subject matter exception to patentability for business methods while admitting that many will be unpatentable as abstract ideas under 101. And many more will be unpatentable under 102, 103, and 112.

    Posted by: Lionel Hutz | Jun 28, 2010 at 11:55 AM

    ________________

    Oh really? Besides Bilski type mathematical equations not tied to a computer and Furgerson type sales and marketing techniques, not tied to anything, what so called business methods are unpatentable under 101?

  24. Posted by: Anon. | Jun 28, 2010 at 01:18 PM

    “the QAS return to their role of destroying the careers of Examiners who allow cases”

    I thought the role of the QAS was changing and they will no longer be “destorying careers” as you put it. If you are a USPTO insider (or anyone else on this board who is), please shed light on this…

  25. While the machine or transformation test isn’t the ONLY test, they don’t provide any other guidance. So, for now at least, the machine or transformation test is the ONLY test…..
    Why did it take them eight months to decide that?
    Posted by: Brian L. | Jun 28, 2010 at 11:46 AM
    _____________

    There is still the Deihr test which I have used for the years to annihilate the likes of MM, 6, West Coast Guy and other anti patent posters on this blog.

  26. I think that the reporter forgot to include the names of Roberts, Scalia, Thomas, and Alito on page 1 of the Kennedy opinion because of what it is printed on page 4 of the Syllabus.

    After the date on page 1 of the Kennedy opinion, it shows the following:

    “JUSTICE KENNEDY delivered the opinion of the Court, except as to Parts II–B–2 and II–C–2.*”

    I think the reporter meant to say the following:

    “KENNEDY, J., delivered the opinion of the Court, except for Parts II–B–2 and II–C–2. ROBERTS, C. J., and THOMAS and ALITO, JJ., joined the opinion in full, and SCALIA, J., joined except for Parts II–B–2 and II–C–2.”

    In my opinion, there is a misprint on page 1 of the Kennedy opinion.

    I hope I’m right because a 5-4 vote is much easier to understand.

  27. Stevens’ explanation of 273 does not square with Kennedy’s.

    Stevens is clearly rationalizing on that point. Whether or not 273 shows that Congress had any love for business method patents, he can’t deny that 273 is a grudging acknowledgement of their existence. Seems that his logic falls apart at that point.

  28. “I think previous posters are probably correct, as a practical matter, that the PTO will apply m-o-t anyway (after all, SCOTUS didn’t say it COULDN’T be applied, only that it wasn’t the EXCLUSIVE test for determining s101 patentability).”

    I admit that I haven’t read all of the comments, so this may have been addressed, but this just doesn’t make sense to me. If M-O-T is not the exclusive test of 101 eligibility, then it cannot be used to prove that a claim is ineligible. So I don’t see why the PTO would be interested in using it – it doesn’t help them exclude anything. On the other hand, the Court’s opinion suggests that the M-O-T test is useful in proving that subject matter IS eligible. So won’t applicants be using it, rather than the PTO?

  29. To all Actual Inventors. Today was a GOOD day for us. Here is how you should see it.

    Basically any invention of a process that can be performed in your head, via vocal communication, such as a sales or marketing technique or a risk hedging method opens you up to a rejection based on an abstract idea.

    However if you can show how your claims are limited to the use or operation of a specific technology you can argue and traverse the 101 rejection.

    Bottomline the Inventors Constitutional Right and statutory right to patent a technological process which includes business method, remains.

    CASE CLOSED

    ______

  30. WCG<

    I don’t see why there is any confusion at all. My copy of the case seems to clearly say that:

    KENNEDY, J., delivered the opinion of the Court, except for Parts II–B–2 and II–C–2. ROBERTS, C. J., and THOMAS and ALITO, JJ., joined the oinion in full, and SCALIA, J., joined except for Parts II–B–2 and II–C– 2. STEVENS, J., filed an opinion concurring in the judgment, in which GINSBURG, BREYER, and SOTOMAYOR, JJ., joined. BREYER, J., filed an opinion concurring in the judgment, in which SCALIA, J., joined as to Part II.

    What do you think it SHOULD say if the clerk were “on the ball?”

  31. Stevens’ explanation of 273 does not square with Kennedy’s. They are opposite. Kennedy infers a Congressional intent for keeping business method patents — Stevens does not.

    Did the Stevens opinion really go along with the Kennedy opinion? Did the Stevens+3 sign onto the Kennedy opinion?

  32. It doesn’t bode well for the clarity of the law that we’re still debating who is in the majority.

    Not that anything else I’ve seen today bodes well for the clarity of the law.

  33. I need some backing up here.

    A concurring opinion just indicates it concurs with the outcome — affirmed. It doesn’t mean that it signs onto the reasoning.

    I don’t think that Steven + 3 signed onto the Kennedy opinion — just the affirming of the Federal Circuit’s judgment.

    I really wonder if the clerk has forgotten to mention that only Roberts, Scalia, Thomas, and Alito has signed onto the Keedy opinion if you read the reporter’s last statement of the Syllabus.

    With the exception of Parts II-B-2 and Parts II-C-2 of the Kennedy opinion, what I think we have is a 5-4 majority opinion penned by Kennedy.

  34. Bilski: Satisfaction of the MoT test is sufficient, but NOT necessary, to prove patentability under section 101.

  35. Chicago IP,

    “I think Part II of Breyer’s opinion has controlling weight, since Scalia is the 5th vote for the majority.”

    I agree. Part II of the Breyer concurrence is the law of the case (and now law of the land).

  36. I think Gary hit the nail on the head — it sounds like Stevens originally had 5 votes (including Scalia) for his position after conference, and assigned himself the putative majority opinion (since he is the senior Associate Justice, and C.J. Roberts apparently was not in agreement), and then somewhere along the way lost Scalia. At the very least, large portions of Stevens’ opinion read like they were written for the majority. But instead of Scalia outright joining Kennedy’s opinion, he decided to try and bridge the gap between Kennedy and Stevens by joining Breyer’s concurring opinion. All speculation, of course, but it seems to make sense in light of what we know about the assignments for the other opinions this term (see Professor John Duffy’s recent post). As a result, I think Part II of Breyer’s opinion has controlling weight, since Scalia is the 5th vote for the majority.

    Bottom line… (a) M-or-T test is important but not controlling; (b) State Street’s “useful, concrete, and tangible result” test is still dead (since 5 Justices agree it is not the correct test — the Stevens 4 + Scalia); and (c) the patentability (sec. 101) door is more open to business methods patent than it was after the Fed. Cir.’s decision, although how much more is still uncertain (and it may not be much).

  37. Note the following:

    The Court’s syllabus states the following on p. 4:

    “KENNEDY, J., delivered the opinion of the Court, except for Parts II–B–2 and II–C–2. ROBERTS, C. J., and THOMAS and ALITO, JJ., joined the opinion in full, and SCALIA, J., joined except for Parts II–B–2 and II–C–2.”

    Why did the reporter feel it necessary to name Roberts, Thomas, and Alito as joining in full? Isn’t that understood? Does the absence of Stevens, Breyer, Ginsberg, and Sotomayer suggest something?

    I don’t know about you, but it feels like there are some justices that waited until the last minute to make up their mind, and that the reporter failed to make the last minute changes.

  38. Also, KC, Breyer was part of Steven’s “+3,” so you are incorrectly counting him twice.

    You have 5 Justices that say no categorical exclusion for Business methods, and 4 saying that there should be a categorical exclusion, but one of those 4 just left the court. So it’s really 5 to 3.

  39. “Stevens +3 : “a claim that merely describes a method of doing business does not qualify as a ‘process’ under s. 101.”

    Breyer and Scalia : “This Court has never before held that so-called ‘business methods’ are patentable, and, in my view, the text, history, and purposes of the Patent Act make clear that they are not.”

    You are counting Breyer twice and Scalia did not join that part of Breyer’s concurrence.

  40. No, KC. Scalia only joined Breyer on part 2, not part 1.

    Scalia voted with the majority that Business Methods are not categorically excluded.

  41. Bilski = unpatentable abstract idea

    MOT test = not the lone test

    Proceed as normal and as defined in the code.

    Put another way:

    Bilski: Too abstract for an application

    The old test: Not the test

    The law: Too abstract for application

  42. Stevens +3 : “a claim that merely describes a method of doing business does not qualify as a ‘process’ under s. 101.”

    Breyer and Scalia : “This Court has never before held that so-called ‘business methods’ are patentable, and, in my view, the text, history, and purposes of the Patent Act make clear that they are not.”

    Seems to me that 6 Justices have said that a business method is not patentable. End of Story.

  43. IANAE “At least with MOT you could amend in a machine or a transformation and you’d be done. You’d get a narrower claim, but you’d get an allowance. Under Bilski, presumably you have to show that your invention as claimed actually does something, but there’s no legal authority even for that, and even that isn’t determinative.”

    In practical effect, I think you can still amend to satisfy MoT and be done. The hard issue will be if the Examiner says your machine is not a “particular machine,” or your transformation is just “insufficient post-solution activity,” because your claim preempts all uses of the “abstract idea” or whatever. I think that is where we will have to see the law develop in the near future.

    But, if you want to try and get the claim allowed without amending to satisfy MoT, then you’de better be prepared to take it to the Supreme Court. I don’t see why the CAFC would bother to try and carve out another category of “important clue” besides the two already in MoT when they can just say “we don’t see either of the established ‘important clues,’ and applicants have failed to identify another category of ‘important clue,’ so no patent for you.” Or even if the applicants do identify a new potential category of “important clue,” then why would the CAFC go out on a limb to embrace it? Easier to just reject it and let SCOTUS grant Cert if they want to add it to the list of “important clues.”

  44. Looks just like what the real contributors here predicted it would.

    Bilski = unpatentable abstract idea

    MOT test = not the lone test

    Proceed as normal and as defined in the code.

  45. I think that it is interesting that J. Scalia only joined PART II of J. Breyer’s dissent, which states that the MOT is an important test and that the “useful, concrete, and tangible results” test is inappropriate. That portion of J. Breyer’s opinion does not provide the blanket statement found in PART I stating that Business Methods are unpatentable.

    It appears to this humble reader that J. Stevens is flawed in two respects: 1) it chastises the Majority for stating that the “abstract idea” test can be used as a tool to weed out business methods that should not be patented because “we have never in the past suggested that the inquiry varies by subject matter”; yet J. Stevens goes on to single out business methods as unpantentable. 2) J. Stevens states that Congress enacted 273 due to the misconception business methods were patentable under Sate Street; J. Stevens, however, does not explain why Congress did not simply modify 101 to exclude business methods if it believed such methods should not be patented.

  46. To say it another way . . . for those who just can’t get it, if your invention is vague and abstract, you have violated section 112, not section 101.

    If your claim is vague and abstract, you have violated section 112.

    If your invention is vague and abstract, you have violated section 101.

  47. you asked that question as if there is a form paragraph you can simply copy and paste that will overcome all 101 rejections for you.

    I’m sorry if you understood it that way, but that’s most assuredly not how I asked it. I’d have a hard time justifying the existence of my profession if there were a form paragraph for every occasion. Even the examiners can only do it because people keep sending them work regardless.

    This whopper of a decision should prove to you that there isn’t,

    See, this is the problem. Not the absence of a form paragraph, but the absence of a coherent line of reasoning that can demonstrate that a particular claim is not abstract. For a 103 rejection, you know how to proceed. You can show that the references don’t teach one limitation of your claims, or that they can’t be combined. The facts and analysis will vary from case to case, but you have some idea of what you must show to convince the examiner.

    At least with MOT you could amend in a machine or a transformation and you’d be done. You’d get a narrower claim, but you’d get an allowance. Under Bilski, presumably you have to show that your invention as claimed actually does something, but there’s no legal authority even for that, and even that isn’t determinative.

  48. Sorry I should have stated if you “can’t” clearly define the invention seciton 112 precludes patentability.

  49. Look I discussed this topic exhaustively in my law review article back in 1992. 22 GGU Law Rev. 455 Human Ingenuity: The Novel Standard for Patenting Algorithms. The question of patentability that lies within section 101 is really utility. The test of novelty required for the new requirement in seciton 101 is found in section 102 and section 103. If you can clearly define the invention section 112 would preclude patentability even if it was new and non-obvious. It is great to see the Supreme Court finally straightening this mess out. As I said once, I will say a 1,000 times, Benson was not a 101 analysis. The legal rationale for invalidating the BCD method in Benson was premised upon section 112, indefiniteness. The judges just used the wrong label section 101. To say it another way . . . for those who just can’t get it, if your invention is vague and abstract, you have violated section 112, not section 101. This isn’t rocket science, it is just basic logic.

  50. Okay, that made me LOL.

    Seriously though, you asked that question as if there is a form paragraph you can simply copy and paste that will overcome all 101 rejections for you. This whopper of a decision should prove to you that there isn’t, when SCOTUS can’t even give a straight answer to the 2 questions that were presented.

  51. “Reading the two concurring opinions, there are six justices who indicate that business methods are not patentable. How is it that Justice Steven’s opinion is not the main opinion of the Court?”

    Huh?

  52. Having reread the opinion in deatil, including the Stevens discurrence, I still cannot find where the Court says that a claim that passes the MoT test might not be patent eligible subject matter under 101.

    It seems to me that the Court basically said that if a claim passes MoT, then it satisfies 101, and that some claims that don’t pass MoT might, in rare cases, still satisy 101, but that it would be a mistake to think that anything that passes the “useful, concrete, and tangible” test satisfies 101.

    Does anyone think that claim drafters and patent prosectors and examinaers and ought to proceed in a different fashion? If so, why?

  53. “More importantly, how is an applicant to address or overcome a hypothetical poorly-reasoned 101 rejection for claiming an abstract idea?”

    – IANAE

    Well, that’s easy — just ask the examiner to look at the invention “as a whole”. Yes, I’m kidding, but that appears to be what Bilski suggests we do.

  54. Reading the two concurring opinions, there are six justices who indicate that business methods are not patentable. How is it that Justice Steven’s opinion is not the main opinion of the Court?

  55. If you have no idea how to rebut the presumption that what is claimd is an abstract idea then either a) you are not competent to practice in that technological field or b) it is in fact an abstract idea, and thus not patentable as the exception to 101.

    A simple “I don’t know either” would have sufficed.

  56. More importantly, how is an applicant to address or overcome a hypothetical poorly-reasoned 101 rejection for claiming an abstract idea?

    If you have no idea how to rebut the presumption that what is claimd is an abstract idea then either a) you are not competent to practice in that technological field or b) it is in fact an abstract idea, and thus not patentable as the exception to 101.

  57. Arthur Dent–
    I agree that the Court has left a void instead of an answer. I think previous posters are probably correct, as a practical matter, that the PTO will apply m-o-t anyway (after all, SCOTUS didn’t say it COULDN’T be applied, only that it wasn’t the EXCLUSIVE test for determining s101 patentability). Thus, even though SCOTUS has given us the same kind of drivel it gave us in KSR, the practical result is likely to be very different. The PTO didn’t want to use the teaching-or-motivation test, and because KSR told them they weren’t REQUIRED to, they now don’t. Instead pretty much all you get is hindsight dressed as “X would have been obvious in light of Y and Z,” as a recent poster more or less said. But for purposes of s101, it looks as if the PTO liked the m-o-t test, and because they aren’t FORBIDDEN from using it, they will.

  58. “Many business patents are practiced in public, and therefore a patent does not necessarily encourage dissemination of anything not already known.” Stevens, J.

    Typical of this jurist’s pathetic lack of any clue as to what it’s all about.

    The practicing in public is not the dissemination that is encouraged by the Patent Act, an enabling disclosure of the invention is what is encouraged. Steven’s comment could be applied equally well to any subject matter. Is he arguing there is no point in patents for fuel efficient engines because they, too, are practiced in public?

    Wish we could put it down to senility, but he’s been missing the boat for decades. Let’s just be thankful he’s now history, and let’s just pray Kagen can do better… I mean, after the filibuster goes bust, of course.

  59. Is there anyone that feels Bilski could save his claims from 101 by adding some sort of signal or visual indication after the performance of his formula?

  60. What inquiry is an examiner to conduct when evaluating a borderline abstract idea?

    More importantly, how is an applicant to address or overcome a hypothetical poorly-reasoned 101 rejection for claiming an abstract idea?

  61. “I disagree.” Posted by: smashmouth football | Jun 28, 2010 at 12:52 PM

    You’re correct in that SCOTUS has not revived the “useful, concrete, and tangible result” inquiry of State Street. Breyer’s concurrence seems particularly damning in this regard. However, Dennis’ practical concerns remain: we know that “abstract ideas” are not patentable, but Examiners are left without a test to determine what constitutes an abstract idea.

    This is troubling. How should the Office instruct its examiners to interpret today’s ruling re the unpatentability of “abstract ideas” in the absence of a test? What inquiry is an examiner to conduct when evaluating a borderline abstract idea? SCOTUS tells us that the machine-or-transformation test offers “useful and important clues” to the patentability question, but, aside from pointing to Benson, Flook, and Diehr, fails to tell us what other “clues” are appropriate to consider before reaching a conclusion of patentability.

  62. After reading through everything once, “punt” is the word that comes to mind. I am pleasantly surprised, as I was expecting a big restriction on the scope of 101 eligibility. Still, the majority is kidding itself when it pretends that Benson, Flook and Diehr together present a coherent test for patentability under 101.

    How frustrated Justice Stevens must be. He dissented in Diehr, nearly 30 years ago. LabCorp v. Metabolite gave him and Justices Breyer & Souter some hope, only to see a dismissal. He might be even more disappointed with the result in Bilski.

  63. @ babel boy:

    I get so sick of judges and justices wading back to 1800, 1200, and beyond to try and make sense of what is patentable in the 21st century. Stevens even alludes to the Assyrians, fer jez sake.

    Strong agreement. These arguments invariably try to make some statement about the eligibility of software processes based on 1800′s definitions of the term “process,” when the ONLY processes that EXISTED were physical or mental. These are the same folks who argue that computers are functionally equivalent with pocket calculators.

    ===

    @ hoteling examiner:

    I think the PTO (even if there isn’t formal training/procedure set forth to do this) will have SPE’s tell their examiner’s to make the 101 rejection under the MOT test if there is any doubt, and then attempt to shift the burden to the applicant to show that even though the claims fail the MOT test, they are not an abstract idea, and thus don’t fail 101.

    Yeah, I’m with you. The PTO *likes* the m-o-t test, and while the Supreme Court encouraged it to create additional tests, it didn’t COMMAND it to do so. I’m guessing the PTO will stick clearly with m-o-t, and will, as a practical matter, perform exactly the steps that you described.

    I’m guessing the CAFC engage in exactly the same behavior. It will continue its timeless hobby of inventing 101 tests du jour, but every ruling on a claim using such a test will back it up with: “and the claims fare similarly under the machine-or-transformation test…”

    ===

    @ bilski@bilski.com:

    > From Zurko:”[T]he Board cannot simply reach conclusions based on its own understanding or experience-or on its assessment of what would be basic knowledge or common sense. Rather, the Board must point to some concrete evidence in the record in support of these findings.”

    See also, KSR Int’l Co. v. Teleflex, Inc. ;)

    I’d LOVE to see some kind of statistical estimate of the stated justification in combining references in PTO 103 rejections since KSR. I am guessing that the TSM test has been totally dropped in favor of the beloved hindsight test (“it would have been obvious to one of ordinary skill in the art to combine the techniques of Doe with the techniques of Smith…”) LITERALLY 100% of the 103 rejections that I’ve received since KSR rely on this “test.”

  64. The Supreme Court mischaracterized the Federal Circuit’s opinion, and the machine or transformation test as a whole. As the Federal Circuit put it, the machine or transformation test is the test to determine whether an abstract idea has been preempted; if the abstract idea is tied to a particular machine or transforms a particular article, then the invention clearly does not preempt all uses of the abstract idea. The Supreme Court, however, neglects to recognize that not every process claim relies on abstract ideas! Clearly those process claims not relying on abstract ideas will not even need to reach the machine-or-transformation test!

    The abstract idea is an exception to everything under the sun, and the machine-or-transformation test is an exception to the exception!

  65. completely agree with you, just my prediction and what WILL happen, not what SHOULD happen

    Yes, I was expressing my disappointment in what inevitably will happen.

  66. So I expect that the PTO will use Bilski v. Kappos as tacit approval of the validity of the machine-or-transformation test – and that, despite the encouragement of the Supreme Court to create new tests, the PTO will (without so admitting) use the machine-or-transformation test as its exclusive test of section 101 patent eligibility.

    Ugh, I hope not. I had a rejection the other day because the claim didn’t recite apparatus at the point of novelty. The whole thing took place in a physical lab setup. I had to add the words “illumination source” or some such or else waste my client’s money arguing.

  67. Anon, your statements make me want to practice another freedom the SC gave me today, that is, buy a handgun and do myself in.

  68. An “abstract idea” seems to be one with too many applications, at least according to Benson. But if you try to make it non-abstract by reducing the number of applications, as in Parker v Flook, it doesn’t count; the idea will still be abstract.

  69. The status quo is preserved:

    Business methods and software will remain patentable until such time as the corporate interests which control all of the US government (including the Supreme Court) decide it is no longer in their best interests for said subject matter to be patentable.

    The QAS will continue to make Examiners’ and Applicants’ lives a living hell by devising a new set of “magic words” every few months to make a software or business method claim patentable. This will occur until such time as the USPTO decides to return to the old slaughterhouse method of Examining, whereby the QAS return to their role of destroying the careers of Examiners who allow cases and the Examiner attrition rate increases.

  70. I think the PTO (even if there isn’t formal training/procedure set forth to do this) will have SPE’s tell their examiner’s to make the 101 rejection under the MOT test if there is any doubt, and then attempt to shift the burden to the applicant to show that even though the claims fail the MOT test, they are not an abstract idea, and thus don’t fail 101.

    I think that would be missing the point of today’s decision, which is that no bright line rule can predict in advance the patent-eligibility of inventions, which themselves are inherently unpredictable. Every case is different and needs to be treated on an individual basis, using intelligence and common sense.

    Whether we trust examiners (or even District Court judges) to do that and do it well is a whole other question.

    ——–

    completely agree with you, just my prediction and what WILL happen, not what SHOULD happen

  71. Scotusblog notes that interestingly, the part of the majority opinion that Scalia DIDN’T join (making that part of the opinion a plurality opinion) is the part that casts a generally favorable light on information-age patents:

    “The breadth of today’s ruling is an open question. Justice Kennedy seemingly suggested that the Court favored the basic patent eligibility “of inventions in the Information Age,” including to some extent with respect to “software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals.” But that part of the opinion is only a plurality – not controlling – because Justice Scalia did not join that discussion and did not explain his reasons for declining to do so.”

    link to scotusblog.com

  72. Does anyone else think the Court’s analysis of abstract idea was completely a by-the-numbers MPEP 2144.03 prior art rejection? Citing Judge Rader’s opinion as a finding of fact and pointing to some textbooks? How is that “evidence” of being an abstract idea?

    From Zurko:”[T]he Board cannot simply reach conclusions based on its own understanding or experience-or on its assessment of what would be basic knowledge or common sense. Rather, the Board must point to some concrete evidence in the record in support of these findings.”

    Oh sorry, guess the Court can.

  73. I think the PTO (even if there isn’t formal training/procedure set forth to do this) will have SPE’s tell their examiner’s to make the 101 rejection under the MOT test if there is any doubt, and then attempt to shift the burden to the applicant to show that even though the claims fail the MOT test, they are not an abstract idea, and thus don’t fail 101.

    I think that would be missing the point of today’s decision, which is that no bright line rule can predict in advance the patent-eligibility of inventions, which themselves are inherently unpredictable. Every case is different and needs to be treated on an individual basis, using intelligence and common sense.

    Whether we trust examiners (or even District Court judges) to do that and do it well is a whole other question.

  74. Simply, if a bright line test is not in the statute, the Court is not going to add one, whether it is 101 or 103.

  75. just a prediction here – I think the PTO (even if there isn’t formal training/procedure set forth to do this) will have SPE’s tell their examiner’s to make the 101 rejection under the MOT test if there is any doubt, and then attempt to shift the burden to the applicant to show that even though the claims fail the MOT test, they are not an abstract idea, and thus don’t fail 101. The PTO will then respond with a simple “we disagree, 101 stands” and be on their way.

    and I’m an examiner….

  76. I think this is the most telling part of the entire opinion:

    “The case produced five different opinions [at the Fed. Cir.]. Students of patent law would be well advised to study these scholarly opinions.”

    I see this as putting the onus upon us to reconcile what each of the Fed. Cir. judges said and to find some common ground. That’s as good as its going to get. The Supreme Court isn’t going to do it for us, and neither is Congress.

  77. Malcolm,

    You should take some comfort that “some” business method patents are eligible.

    Reading it another way, “most” are not.

  78. I get so sick of judges and justices wading back to 1800, 1200, and beyond to try and make sense of what is patentable in the 21st century. Stevens even alludes to the Assyrians, fer jez sake.

    Who cares what Jefferson or Washington thought about patents? Washington had wooden teeth. They all lived on a different planet than we do. Any contemporary high school graduate has accumulated more knowledge about technology than Jefferson accumulated in a life time of inquiry. This is not to diss Jefferson, it’s just to point out that these judges and justices have to get out of the 18th century if they ever hope to resolve these prickly patent problems.

    The Founders weren’t soothsayers and they weren’t perfect. They were privileged males, mostly young and mostly slaveholders with no possible connection to a future 200 years out. Their views are irrelevant to today’s complex patent issues. The original US Constitution they drafted had so many flaws, it couldn’t even hold the country together for 75 years. There is absolutely no point in going back any further than 1952 in these analyzes. IMHO.

  79. I’m interested to note that the Supreme Court took the same approach as in KSR, stating that the predominant test used in determining a critical issue of patentability (here, machine-or-transformation; there, teaching-suggestion-motivation to combine) was not, in fact, the *only* valid test for this issue, and that other tests could be adopted that are consistent with 35 USC.

    However, I expect the reaction of the PTO to be the exact opposite as with KSR. The PTO really wanted to escape the exclusivity of the TSM test, and it has barely ever been used since the Supreme Court opinion. By contrast, the PTO really *likes* the machine-or-transformation test – it advocated its adoption at every stage of this litigation! So I expect that the PTO will use Bilski v. Kappos as tacit approval of the validity of the machine-or-transformation test – and that, despite the encouragement of the Supreme Court to create new tests, the PTO will (without so admitting) use the machine-or-transformation test as its exclusive test of section 101 patent eligibility.

    Meanwhile, the CAFC will probably waffle on the issue for several more decades, playing around with additional tests… but will probably back up every one of its decisions citing each of these “pet” test with: “but the claims fare similarly under the machine-or-transformation test…”

    My takeaway practice tip (for myself, as legal advice ;) ) is simple: I intend to keep doing what I’ve been doing for the 22 months since In re Bilski – drafting claims that pass the machine-or-transformation test by a clear margin.

  80. “Dennis wrote: “It is unclear to me how patent office examiners will be able to apply the test for abstract ideas in any meaningful way. I suspect that they will not.”

    I for one expect a return to the “useful, concrete, and tangible result” inquiry examiners were using before Bilski’s machine-or-transformation test.

    Posted by: Arthur Dent | Jun 28, 2010 at 12:33 PM”

    I disagree. The Stevens opinion (4 justices) and Part II of Breyer’s concurrence (joined by Scalia, making 5 justices total) seem to shoot down State Street specifically. See in particular FN1 on page 2 of Stevens’s opinion (“Even if the machine-or-transformation test may not define the scope of a patentable process, it would be a grave mistake to assume that anything with a “ ‘useful, concrete and tangible result,’ ” State Street Bank & Trust v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373 (CA Fed. 1998), may be patented.”). See also opinion of Breyer at 3 (“Fourth, although the machine-or-transformation test is not the only test for patentability, this by no means indicates that anything which produces a “‘useful, concrete, and tangible result,’” State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373 (CA Fed. 1998), is patentable.”); id. at 4 (“To the extent that the Federal Circuit’s decision in this case rejected that approach [i.e., the "useful, concrete, and tangible result" test from State Street], nothing in today’s decision should be taken as disapproving of that determination.”). Not even Kennedy’s opinion would support retaining the State Street test. See Kennedy opinion at 16 (“And nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357.”).

  81. “As a “clue,” the machine-or-transformation test likely correlates with the existence of patentable subject matter. However, some patent claims that fail the test will still be patentable and other patent claims that pass the test will still be ineligible.”

    I read the opinion and did not find the bolded part in the opinion even though I looked for it. I’ll read it again, but I’d appreciate it if someione could direct me to the part where they say a claim to a process could pass MoT and still fail 101. Maybe its in the lengthy lame duck Stevens concurrence that I merely skimmed. Can someone please help me out?

  82. > Why did it take them eight months to decide that?

    I’m guessing (based on the style of his opinion) that Stevens spent eight months lobbying the other justices for majority support for a categorical business method exception to patentability… and then didn’t get it, requiring Kennedy to write a quickie affirmation.

    Stevens is right about one thing: the majority opinion basically rejects Bilski’s claims out of hand, with barely an explanation – not even explaining which test it was using, and noting that the claims are directed to “well-known concepts” (which, last I checked, was a 102 issue!)

  83. That’s got to be the main take-away here. 102 and 103 are supposed to be our guardians against overly-broad claims to methods everyone else is already using. The front door to the PTO, in the form of 101, remains wide open.

    Business methods check in, but they don’t check out.

    This is exactly right. 101 was a dumb tool for this – Stevens is right about that.

  84. 1) “Times change.” Halle-freaking-lujah.

    So much discussion of Bilski – including Dyk’s concurrence at the CAFC and Stevens’s concurrence here – tries to resolve the patentability of software processes based on historical definitions of the term “process” from pre-computing ages… when ALL methods were either “physical/manufacturing” or “mental”. It’s interesting that the majority repeatedly acknowledges that we have passed into the “Information Age,” but Stevens’s opinion only seems to mock this statement while delving into Elizabethan patent law! These crotchety old men refuse to acknowledge that computers are even remotely different from souped-up pocket calculators, and reject 50 years of technological progress.

    2) I’m deeply amused that Stevens’s review of the history of business method patents is NINE PAGES LONGER than the entire majority opinion. Clearly, Stevens set his clerks to work at writing a historical basis to support a sea change in the law as a majority opinion. Can’t imagine he was too happy about failing to secure that majority, and having to edit strong statements like “the opinion of the Court today establishes…” to prophetic statements like “MY opinion WOULD…”

  85. DB Bilski claims a method for entering in contracts with various parties to hedge risk, but he doesn’t say HOW. How do you identify the parties?

    With your eyes.

    how do you initiate the transactions?

    By communication with words or symbols.

  86. I’d just like to say that I have nothing to add to the analysis as I’ve not yet read the decision, but based on initial comments I’ll wait for the paperback. I’d also like to thank Dr. Zaius for its biting commentary through this whole ordeal and eek for making me legitimately lol.

    I’d also like to claim at least partial victory in my prognostications. Last night I predicted a plurality, which did not occur, but the opinions were fractured enough that it had commentors using the word, so I claim victory on that point. Also, I stated on Nov. 10:

    “I think they will dump the MOT test and replace it with another incoherent and impossible to implement standard. I’d go so far as to say the standard they’ll replace it with will be a regurgitation of existing contradictory precedent. Same as it ever was.

    Bilski will not get a patent, which will be the closest thing to guidance we’ll see. Everyone will declare victory (except Bilski) and no one will be happy.”

    They dumped MOT
    We got a regurgitation of existing contradictory precedent
    Same as it ever was
    Bilski did not get a patent
    That was the closest thing to guidance we saw
    Everyone declared victory

    I was off on two points, there was no incoherent replacement standard, and some people are actually happy.

    I also have gone on record that this will be a big flaming sack left on the doorstep at the very end of the session, that the CAFC will stomp all over it, and the PTO will be left to clean it all up, which they will fail to do, but will manage to smear it everywhere.

  87. Lionel Hutz,

    “while admitting that many will be unpatentable as abstract ideas under 101″

    No, no, abstract ideas lack enablement and are therefore overly broad under 112.

  88. Definition for all the idiots who seem to miss the Court’s point, which has been repeated over and over again.

    Abstract idea claim: A claim that does not meet the enablement requirements of section 112.

    The Court has repeatedly said that claims to abstract ideas and laws of nature are not patentable because they are overly broad. They preclude all uses of the idea. The Court did not decide that claims cannot be overly broad, Congress did. Section 112 clearly says “The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.”

    Bilski claims a method for entering in contracts with various parties to hedge risk, but he doesn’t say HOW. How do you identify the parties? how do you initiate the transactions?

    That’s why the machine or transformation test sometimes provides a clue. It tells us how.

  89. Dennis wrote: “It is unclear to me how patent office examiners will be able to apply the test for abstract ideas in any meaningful way. I suspect that they will not.”

    I for one expect a return to the “useful, concrete, and tangible result” inquiry examiners were using before Bilski’s machine-or-transformation test.

  90. My favorite line from my initial reading:
    “Any suggestion in this Court’s case law that the Patent Act’s terms deviate from their ordinary meaning has only been an explanation for the exceptions for laws of nature, physical phenomena, and abstract ideas.”

    Hopefully, rejections under 101 will now actually assert one of these three exceptions. The primacy of these exceptions is further reinforced by the Court’s suggestion that the Fed. Cir. could specifically define a class of inventions related to business methods and adjudge this class as abstract.

  91. Ping, fair enough. I meant mapping as a verb meaning the SCOTUS finding a way to say x is y.

  92. Are they not approximations that are tools for our mind to use?

    Sunshine – you be getting me wrong. re-read what I wrote (and don’t be misguided by the subtle “is” is play). I be agreeing with you that “mapping” is not the same as “is”. Criminy – one only has to look at the history of “mapping” to see that “mapping” isn’t “is”.

  93. Amen, BabelBoy – all the speculation and wasted time was just that. No insight into the decision, no greater appreciation for what was said, nada. Trying to guess what the Supes will say is really only worth it if you are party to an appeal going into briefing.

  94. I’m with Lionel.
    All claims like Bilski’s are dead, and one does not even need to focus excessively on the MoT test, or any other test. It won’t be long before a thoughful attorney defending his/her client against a crxppy patent abstraction articulates yet another test to the Federal Circuit … which will provide yet another “clue” as to how many different kinds of crxppy abstract patents were improperly granted.

    The slide is greased, trolls. Enjoy the ride.

  95. >>Um, quite simply – No. “Maps to” is quite >>correct. Now, if you wanted to say “is”, then >>Ida agree with you.

    Ping, you are out of your mind. Newton’s equations map to what? Are they not approximations that are tools for our mind to use? Don’t be ridiculous. Information processing is an art just as is chemistry.

  96. this opinion is really a kick to Congress to clarify this issue.

    Congress has never put any limiting language in section 101, and they’re not about to start now.

  97. I’m trying to read into the conservative/liberal split on this one. The split was Roberts, Thomas, Alito, and partly Scalia in the majority; Stevens Ginsburg, Breyer, Sotomayor in the minority; and Kennedy as the centrist swing vote joining the majority.

    I didn’t see this case as necessarily invoking a liberal vs conservative split. I wonder if it really did or if it was just coincidence that the votes split that way.

    Scalia’s joining in part of Breyer’s separate concurrence suggests that Scalia may have been the fifth vote for a Stevens majority for a time before taking the more moderate approach of a little joining the majority, a little joining Breyer. Would explain why Steven’s opinion is written as if it was initially drafted as a majority opinion.

    All total speculation of course. But it does make me wonder if Scalia just got too uncomfortable being in a majority with four liberal votes.

  98. And many more will be unpatentable under 102, 103, and 112.

    That’s got to be the main take-away here. 102 and 103 are supposed to be our guardians against overly-broad claims to methods everyone else is already using. The front door to the PTO, in the form of 101, remains wide open.

    Business methods check in, but they don’t check out.

  99. Saying that an equation maps to a law of nature is just strange.

    Um, quite simply – No. “Maps to” is quite correct. Now, if you wanted to say “is“, then Ida agree with you.

  100. I thought the majority opinion was pretty good.

    It avoided a bright line rule. It also explicitly rejects a broad subject matter exception to patentability for business methods while admitting that many will be unpatentable as abstract ideas under 101. And many more will be unpatentable under 102, 103, and 112.

  101. The Court to a duck-and-cover approach to business method patents.

    The elimination of the business method patent fell short by one justice. Sorry, Malcolm.

  102. So, for now at least, the machine or transformation test is the ONLY test…..

    Um, quite simply – No.

  103. The best I can figure it, these bone heads seem to think since e= m * c * c represents a law of nature that all equations are somehow those represenations of laws of nature.

    Just strange. Illustrates a lack of understanding of science that –I think –rises to the level of impeachment. If a justice were this ignorant of say human behavior, (for example, saying that people tend to stab people when the light are blue and thus are justified in murder in blue light) I think we would impeach them.

    Saying that an equation maps to a law of nature is just strange.

  104. While the machine or transformation test isn’t the ONLY test, they don’t provide any other guidance. So, for now at least, the machine or transformation test is the ONLY test…..

    Why did it take them eight months to decide that?

  105. “It is rather disappointing in that it does not untwist the strange and shameful Benson.”

    Yes, but this wasn’t the right case for that.

  106. I think you’re probably correct, Andrew. Breyer’s concurrence will be the most relied-upon statement for patent decision-makers.

    But the nature of the plurality opinions might leave the door open for future tribunals to second-guess which opinion is the “narrowest” or what combination of plurality opinions are most consistent:

    link to en.wikipedia.org

  107. I have to read the opinion again, but I don’t think I am smart enough to use this opinion to answer my clients’ questions.

  108. It is rather disappointing in that it does not untwist the strange and shameful Benson.

    An equation getting mapped to a law of nature and thus being abstract is –simply and completely–wrong.

  109. “given that 3 other justices wouldn’t allow such patents at all”

    Actually, Breyer joined Stevens in saying that he wouldn’t allow them at all. So it is really the 4 who wouldn’t allow them at all, + Scalia (who by joining Breyer’s concurrence) who seems to place great weight (but not exclusive weight) on the MOT test.

  110. @ eek – rofl.

    @ plurality – as i count, nine justices agreed that m-o-t is not the exclusive test, but is the best they can come up with yet, and that concrete-useful-tangible is bogus. zero justices provided any bright line or even standard for discerning what non-m-o-t subject matter might be patentable.

    the PTO response to this decision may be weird to behold.

  111. Even the plurality opinion seems to cast skepticism on business method patents that simply provide “for more efficient performance of a vast number of business tasks.” Scalia’s concurrence means that basically Breyer’s decision is the majority opinion for how much leeway the Court will give business method patents that don’t meet the “machine-or-transformation” test, given that 3 other justices wouldn’t allow such patents at all.

  112. “The best part about this decision is that it brings to an end the mindless, meaningless, and mind-numbingly repetitive speculation that Stevens would write the majority opinion.

    BTW, somebody eats crow. No names mentioned.

    Posted by: Babel Boy | Jun 28, 2010 at 11:03 AM”

    I didn’t engage in any prediction on this blog, but I take issue with your characterization as “mindless.” I think a fair, if unobservable, interpretation is that Stevens had been tapped to write the majority, but then lost a vote. His opinion reads a lot like a majority opinion than the Kennedy opinion, with a considerably more-in-depth analysis.

  113. “Plurality means something different at SCOTUS:”

    You are correct in that 5 justices didn’t join Breyer’s opinion. But by joining that part of Breyer’s opinion, Scalia is in effect saying “I only joined the majority opinion because I believe the majority opinion is consistent with this part of Breyer’s opinion.”

    Of course, Scalia is not disagreeing with the majority opinion specifically; he (by joining Breyer) is just emphasizing that the MOT test (while not the sole test) is still a very important test, and that the Court is not saying that a huge number of processes are beyond the reach of the test.

  114. Andrew – I don’t count 5 justices joining Breyer’s opinion anywhere. Don’t we simply have 4-3-2 plurality opinions with regard to the current test (as articulated in II-B-2 and II-C-2)? Or does it work how you say – that Scalia makes it a majority?

  115. “Plurality means something different at SCOTUS:”

    Read Part II of Breyer’s opinion. Since it was joined by Scalia, it will most likely be read by lower courts as the controlling for how to interpret Kennedy’s majority opinion.

  116. Scalia (by joining part 2 of Breyer’s concurring opinion) further disparages the “useful, concrete, and tangible result” test of State Street. This means that a 5 member majority are basically coming as close as possible to throwing it out.

  117. patent.drafter: Stevens hit the nail on the head there. At least in KSR, they provided a bunch of other specific rationales for rejecting claims under 103 when they said that TSM wasn’t the only test. Here, they took away M-or-T and then just gave us a huge headache.

  118. It seems the most narrow holding required to achieve the result (i.e. the opinion that controls) is Part 2 of Breyer’s opinion, since a member of the 5-4 majority (Scalia) joined it. This seems to say that while the MOT is not the SOLE test, it is a very powerful test, and that the court is not saying that many processes lie beyond the reach of the test.

    Scalia also didn’t join B-2 and C-2 of the majority opinion (making those parts of the opinion not controlling).

  119. I really need some clarification as to how the opinion division works. II-B-2 and II-C-2 in Kennedy’s opinion are mere plurality opinions without force of law, right? But neither do Stevens’ or Breyers’ concurences have a majority in any respect, right? Even though Breyer and Scalia claim that their concurrence is consistent with Kennedy’s opinion in the entirety? Help – how does this work?

  120. I think Fatalist is correct.

    In my opinion, this does little to address software patents at all, in so much as we already knew they had to go somethings beyond mere abstract algorithms and involve something more in the world outside 1s and 0s.
    The question is how abstractly the patent agent can describe the analog, real world results of the digital algorithms. (Oh wait, real numbers are math too. Oh sh–)

  121. “Indeed, all members of the Court agree that the patent application at issue here falls outside of §101 because it claims an abstract idea.”

    That’s the ticket, people. When faced with a business method patent, persuasively argue that the claims are drawn to an abstract idea.

  122. Looks like MM’s aunt won’t be getting calls for movie recommendations after all.

  123. “The Court, in sum, never provides a satisfying account of what constitutes an unpatentable abstract idea. Indeed, the Court does not even explain if it is using the machine-or-transformation criteria. The Court essentially asserts its conclusion that petitioners’ application claims an abstract idea. This mode of analysis (or lack thereof) may have led to the correct outcome in this case, but it also means that the Court’s musings on this issue stand
    for very little.” Stevens J.

  124. Just like I told you
    The Supremes finally realized their limitations (as far as CS and EE goes) and passed a very neutered decision to not make up any new absurdities (and be laughed at on this blog)
    Which is a good thing for them and for us…

  125. The Court today said nothing that it hasn’t said before (which is how it’s supposed to be), specifically, “Dear Federal Circuit, please stop MAKING NEW LAW!”

  126. An absolutely inscrutable read, that utterly fails to bridge the gaping chasm of logic from Benson and Flook on the one hand to Diehr on the other.

    at least the majority opinion – I have not yet read Justice Steven’s concurrence.

  127. Noise Above Law:

    “MAN THIS IS A GREAT DECISION”

    “Typical 6 declare victory no matter what happens.”

    6 learned the trick…So, don’t laugh, he/she may be the President of US one day.

  128. I am impressed with the quality of the comments on this topic so far.

    I am a bit surprised by 6 declaring victory, who seems to want no patents under any circumstances. The SC broadened the 101 standard, which seems the opposite of what 6 would want.

  129. The best part about this decision is that it brings to an end the mindless, meaningless, and mind-numbingly repetitive speculation that Stevens would write the majority opinion.

    BTW, somebody eats crow. No names mentioned.

  130. Business methods not categorically excluded by 101; MOT not the sole test, software patents not touched by this patent.

    Sounds like a victory to me.

    KMA 6 and MM

  131. “the Supreme Court affirmed that Bilski’s risk-management method was not the type of innovation that may be patented.”

    I’m printing it out now, but my early guess is that this decision really doesn’t answer the big questions, so it’s “business (methods) as usual” for the patent bar. Which is a good thing, as any restriction on 101 = less money for me.

  132. “It is true that patents for inventions that did not satisfythe machine-or-transformation test were rarely granted in earlier eras, especially in the Industrial Age, as explained by Judge Dyk’s thoughtful historical review. See 545
    F. 3d, at 966–976 (concurring opinion). But times change.

  133. “MAN THIS IS A GREAT DECISION”

    Typical 6 declare victory no matter what happens.

    This falls to my long held predictions in every sense. Sorry 6 – as much as you declare victory, that declaration rings hollow.

Comments are closed.