Yesterday, the Supreme Court rendered its long-awaited opinion regarding whether a "process" must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing ("machine or transformation" test), to be eligible for patenting under 35 U.S.C. § 101.

While affirming the decision of the Court of Appeals for the Federal Circuit (CAFC) holding in Bilski (545 F. 3d 943 (2008)), the Supreme Court failed to accept the CAFC's ruling that the "machine or transformation test" is the sole test for the patentability of processes and methods. The Court affirmed the CAFC's decision that Bernard Bilski’s claims were not patentable not because they failed to meet the machine or transformation test, but because they fall within the realm of an exception to patent-eligible subject matter as defined by 35 U.S.C. § 101—they are directed toward an (unpatentable) abstract idea.

The Court relied upon its prior decisions regarding the patentability of abstract ideas (Gottschalk v. Benson, 409 U. S. 63, 70 (1972); Parker v. Flook, 437 U. S. 584 (1978); and Diamond v. Diehr, 450 U. S. 175 (1981)) to determine that the Bilski claims are unpatentable. Although the Court declined to provide any additional tests for the patentability of machines or processes, it made clear that it was not endorsing any prior tests defined by the CAFC (e.g., the "useful, concrete and tangible" test of patentability for processes and methods as laid out in State Street Bank & Trust v. Signature Financial Group, Inc., 149 F. 3d 1368 (Fed. Cir. 1998)).

The Court did make a definitive statement that claims directed towards business methods are not categorically unpatentable. Further, the Supreme Court's decision indicates that 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 that "[t]he machine or transformation test is not the sole test for deciding whether an invention is a patent-eligible 'process.'"

Ballard Spahr's Intellectual Property Department will monitor this case and keep clients informed of developments. For more information on Bilski and its effect on patent subject matter eligibility for processes and how it may affect you, please contact any member of Ballard Spahr's Patents Group.

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