The Long-Awaited Decision. On June 28, 2010, the Supreme Court rendered its long-awaited decision in Bilski v. Kappos. The Bilski case involves an attempt to patent a “pure” business method—one that need not be performed by or with a computer. The U.S. Patent and Trademark Office routinely refuses patent protection for pure business methods, but frequently grants patents for computer-implemented business methods.
The Bilski decision affirms the Federal Circuit’s decision that Bilski’s pure business method is not eligible for patent protection. According to the Court, Bilski’s method of hedging against risk is not eligible because it is merely an abstract idea.”1
The majority opinion in Bilski clarifies that business methods are not categorically excluded from patent protection. The opinion also reaffirms that patent eligibility is properly determined according to prior Supreme Court precedent, including precedent under which the involvement of a machine (such as a computer) can be sufficient for eligibility.
The Bottom Line. The practical effect of the decision is that computer-implemented business methods remain eligible for patent protection.2 Examples include personalization and marketing features of web sites, computerized methods for analyzing or “mining” customer data, and electronic payment methods. Business methods that are only partially automated by computer may also be eligible, particularly if the involvement of the computer(s) is non-trivial.
[1] Although the Court did not apply the “machine-or-transformation” test articulated by the Federal Circuit, the Court characterized this test as a “useful and important clue or investigative tool” for assessing patent eligibility.
[2] The Bilski case does not involve the novelty and non-obviousness requirements for patentability. To qualify for patent protection, these additional requirements must also be met.