Supreme Court Hears Oral Argument Regarding Patentability of Business Method Claims


The Supreme Court recently heard oral argument in In Re Bilski, in which the Court will make a ruling on the limits of patentable subject matter.

Since the Supreme Court's decision in State Street Bank v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. 1998), businesses have been concerned with the issue of patentability of software and business methods. In State Street, the Supreme Court ruled that a computer programmed with novel software is patentable even if the output is merely numbers, which resulted in a surge in business method patent applications. Since there were no prior business methods against which to vet the new applications, the United States Patent and Trademark Office ("PTO") granted many applications that covered things already in the prior art. The PTO then retracted, delaying the processing of business method patents for years before eventually rejecting them. Bilski's was one of the rejected patents.

At issue in Bilski are claims relating to a method of managing risk in commodities trading.

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