U.S. Supreme Court

High Court to Hear Bilski Case Restricting Business Method Patents

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The U.S. Supreme Court has agreed to review a decision that restricts patents on business methods by requiring that they be tied to a machine or involve a physical transformation.

The outcome will likely affect software, biotechnology and financial services industries, Bloomberg reports.

“This case raises the most fundamental question in patent law: What can be patented?” the petition for certiorari (PDF posted by SCOTUSblog) says. “Are patents only for manufacturing processes that are tied to a particular machine or produce some physical transformation? Or do patents also embrace modern business processes that do not depend on a particular machine or device?”

The U.S. Court of Appeals for the Federal Circuit ruled in the case last fall in an en banc opinion rejecting a patent application for a method of hedging risk in commodities trading.

Computer makers had asked the Federal Circuit to restrict business method patent rights, while biotechnology groups wanted broader protections, the Wall Street Journal reports. Financial-services companies varied on their support for narrowed patent rights.

Last fall’s Federal Circuit decision was viewed as a shift away from its 1998 decision on business methods, State Street Bank & Trust Co. v. Signature Financial Group Inc. The prior decision said processes could be patented as long as they produced useful, concrete and tangible results.

The Obama administration had characterized the Federal Circuit’s ruling last fall in In re Bilski as a narrow decision that did not merit Supreme Court review. The case caption is now Bilski v. Doll.

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