The Bilski decision is here! State Street Bank is out.

In Insights, Uncategorized

31 October, 2008

Yesterday (October 30, 2008), United States Court of Appeals for the Federal Circuit (CAFC) closed the door on the State Street Bank decision from 1998, a decision stating that it would be enough in regards to patentability under 35 U.S.C. § 101 if an invention produces “useful, concrete, and tangible result”.

In the decision from yesterday, the CAFC instead made use of the so called machine-or-transformation test, where either a specific machine with specific ties to the claimed process or the specific transformation of a physical entity to another must be present for the invention to be patentable. Thus, an invention, such as the Bernie Bilski invention, which is not tied to any specific machine or apparatus for any of its process steps nor is limited to any particular transformation, is not patentable.

The machine-or-transformation test has been applied before, for example in relation to Gottschalk v. Benson (1972). However, in the Gottschalk v. Benson case, the claimed process was still held to be ineligible subject matter, even though it operated on a machine such as a digital computer, since the claim’s tie to the machine were not specific enough. Accordingly, an algorithm implemented on a general purpose computer, such as a PC, was in this case not enough for reaching patentability.

On the other hand, a case where the court ruled the machine to be specific enough when applying the machine-or-transformation test, was in relation to Diamond v. Diehr (1981), where the Arrhenius equation was used for deciding when a process for curing rubber in a mould was completed. In this case, the machine had means for both the curing of the rubber as well as the computation of the Arrhenius equation (i.e. means for installing rubber in a press, closing the mold, constantly determining the temperature of the mold, constantly recalculating the appropriate cure time through the use of the Arrhenius equation and a digital computer, and automatically opening the press at the proper time).

Accordingly, for not failing the machine-or-transformation test it seems that one has to be very specific when drafting an application in this area, such that the ties between a claimed process implemented on a machine are made obvious.

On the positive side the CAFC noted that there will be no implementation of the so-called “business method exception” (as well as in relation to software), which they rather state would be unlawful. Accordingly, business method and software claims are still in as long as they fulfil the machine-or-transformation test.

If you would like to read the whole decision it can be found here: http://www.cafc.uscourts.gov/opinions/07-1130.pdf.

Magnus Nilsson, European Patent Attorney

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