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Tuesday, June 29, 2010

the Supreme Court's decision on BILSKI

On Monday, 28 June 2010, the United States Supreme Court decided a case regarding the patentability of business method patents.  The case can be found at Bilski et al. v Kappos, 08-964.

The Court affirmed the Court of Appeals for the Federal Circuits rejection of a patent application regarding business method patents.

Claim 1 of the patent application recites,

"(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumers;
(b) identifying market participants for said commodity having a counter-risk position to said consumers; and
(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions."

The Court reasoned:

     In light of these precedents, it is clear that petitioners’ application is not a patentable “process.” Claims 1 and 4 in petitioners’ application explain the basic concept of hedging, or protecting against risk: “Hedging is a fundamental economic practice long prevalent in our system of commerce and taught in any introductory finance class.”
     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.

Therefore, a business method that is known to the public, is probably not patentable, even if it is integrated with a computer program, or software.


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