On November 9, 2009, the Supreme Court of the United States conducted oral arguments in Bilski v. Kappos, a case dealing with the issue of what subject matter and technologies are eligible for patent protection. See IP Update, Vol. 11, No. 11. The issue confronting the Supreme Court was whether the Federal Circuit erred by holding that 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.
Based on the questioning by the majority of the Justices, ineligibility of pure business methods, and the Bilski claims in particular, appears to be a foregone conclusion. Justice Ginsburg appeared to be against granting patents on business methods. Justice Sotomayor appeared to question the Federal Circuit's decision in Bilski. Along with Justices Breyer, Stevens, Scalia and Kennedy, who previously criticized business method claims in recent decisions in eBay, Inc. v. MercExhange, LLC, and in Microsoft v. AT&T, and the criticism by Justice Breyer of the Federal Circuit's 1998 State Street decision voiced (in dissent) in the cert dismissal in Metabolite, there appear to be at least five Justices against granting patents on business methods—but at the same time not comfortable with the Federal Circuit's Bilski ruling.
Although it appears pure business methods are disfavored by the Supreme Court, the Justices appear to appreciate that there is difficulty both in defining business methods, and in drawing a line that excludes pure business methods but does not result in undesired consequences for other areas of technology, such as software and medical technologies. Nevertheless, it appeared that the Justices are not satisfied with either the “machine or transformation test” set forth by the lower court, or proposals by the U.S. Patent and Trademark Office that essentially deem processes patentable by virtue of use of a computer or microprocessor.
A decision is expected before the end of the current term (June 2010). Click here for a link to the hearing transcript.