Today’s opinion in Bilski

By Tom Goldstein
on Jun 28, 2010 at 12:46 pm

Justice Kennedy’s opinion for the Court today’s in Bilski v. Kappos follows the same methodological approach as his prior opinion for a far-broader majority in KSR v. Teleflex.  The Court recognizes the value of a test articulated by the Federal Circuit – here, the “machine or transformation” test – but rejects it as the exclusive tool for determining patentability.  And the Court explained that its holding was not intended to preclude the Federal Circuit’s development of additional standards to govern business method patents, so long as they do not impose a rule inconsistent with the statutory text.  Indeed, Justice Kennedy went out of his way in his oral statement to commend readers to review the “scholarly” opinions of the Federal Circuit on the issue.

Today’s short opinion is principally one of negation – it rejects an exclusive standard adopted by the en banc Federal Circuit.  The Supreme Court concluded that it was sufficient to recognize the patentability of business methods, reject the Federal Circuit’s standard standard, and recognize that the particular patent before it was an unpatentable “abstract idea” precluded from patentability by the Court’s prior precedents.  The Court did not otherwise elaborate on the proper test.  Nonetheless, “the machine-or-transformation test is a useful and important clue, and investigative tool, for determining whether some claimed inventions are processes under §101.”

The breadth of today’s ruling is an open question.  Justice Kennedy seemingly suggested that the Court favored the basic patent eligibility “of inventions in the Information Age,” including to some extent with respect to “software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals.”  But that part of the opinion is only a plurality – not controlling – because Justice Scalia did not join that discussion and did not explain his reasons for declining to do so.

Four members of the Court – one of whom (Justice Stevens) retires effective tomorrow – stated their clear and broad objections to the patentability of business methods.  As later cases reach the Court testing the reach of patentability for such inventions, Elena Kagan’s views will accordingly be critical.

The upshot for the time beings is that business method patents survive, and likely are somewhat more patentable than under the Federal Circuit’s standard, though how much more so remains opaque.  Patent eligibility remains for technological innovations such as software and biomedical advances, although once again it is unclear how broadly that protection will reach.