On June 28, 2010, the U.S. Supreme Court issued its ruling in the biggest patent case in recent years, Bilski v Kappos. (See https://www.supremecourt.gov/opinions/09pdf/08-964.pdf). The case related to the patentability of business methods. The Supreme Court’s decision encompassed three different opinions with shifting coalitions of Justices joining different aspects of the primary opinion of the Court. Justice Kennedy delivered the opinion of the Court, except for parts II–B-2 and II-C-2. Justices Roberts, Thomas and Alito agreed with Kennedy’s opinion but Justice Scalia only partly agreed with Kennedy, joining the plurality opinion except for parts II-B-2 and II-C-2. Justice Stevens filed a concurring opinion which was followed by Justices Ginsburg, Breyer, and Sotomayor. Justice Breyer filed his own opinion, concurring in the Court’s judgment, and Scalia joined Breyer only for Part II of Breyer’s opinion. It is fair to state that the Court’s thoughts on this topic are not well settled and that future guidance will be needed.
Briefly, the Court affirmed the Federal Circuit Court of Appeals decision (see https://cafc.uscourts.gov/opinions-orders/07-1130.pdf) which held that the Bilski patent claims were not patentable subject matter. Five members of the Court agreed with the following holding by Justice Kennedy:
“Rather than adopting categorical rules that might have wide-ranging and unforeseen impacts, the Court resolves this case narrowly on the basis of this Court’s decisions in Benson, Flook, and Diehr, which show that petitioners’ claims are not patentable processes because they are attempts to patent abstract ideas.” slip opn. 13.
Further study is needed to understand the full scope of the Bilski opinion. However for the time being, it is clear that the following Bilski business method software patent claims are NOT patentable subject matter:
“[M]anaging the consumption risk costs of a commodity sold by a commodity provider at a fixed price, [which consists of] (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity ata fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumers; (b) identifying market participants for said commodity having a counter-risk position to said consumers; and (c) initiating a series of transactions between said commodity provider and said market participants at asecond fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.” Id., J. Stevens concurring slip opn. 3.
A more through analysis will follow.
