In re Bilski: The Federal Circuit Defines New Rules for Patenting Business Methods.

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Yesterday, the Federal Circuit issued its long-awaited decision on the patent-eligibility of business methods under Section 101 of the Patent Act. In In re Bilski, No. 2007-1130, slip op. (Fed. Cir. Oct. 30, 2008), the en banc court held that any process, including a business method, is eligible for patent protection only if it is tied to a particular machine or apparatus or transforms a particular article into a different state or thing. In doing so, the court modified its decision in State Street Bank & Trust Co. v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. 1998), which suggested that any process that produced a useful, concrete, and tangible result was potentially patent-eligible. At the same time, the Federal Circuit refused to impose per se exclusions to patent-eligibility for business methods, software, non-technological processes, or other subject matter categories.

The court?s en banc opinion in Bilski will have a significant impact on the ability to obtain patents, as well as to defend against a charge of patent infringement, in a wide variety of fields, from financial transactions to computer software to medical diagnostics. At the same time, the Federal Circuit provided relatively little guidance on how its newly defined ?machine-or-transformation test? should be applied in practice, and explicitly declined to decide the important question of the patent-eligibility of computer-implemented processes. As a result, the impact of Bilski will depend in large measure on how later decisions apply this new ?machine-or transformation? test and, of course, whether the Supreme Court grants certiorari.

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