Last June, in Bilski v. Kappos, 130 S. Ct. 3218 (2010), the U.S. Supreme Court tackled one of the most difficult issues in patent law—defining what constitutes patentable subject matter under section 101 of the Patent Act. Bilski affirmed the Patent Office’s rejection of an application for a patent covering a method of hedging in commodities markets. It did not, however, break new ground in the ongoing effort to draw the line between inventions that deserve patent protection and patent applications that attempt to monopolize the use of abstract ideas and laws of nature.
Prior to Bilski, the U.S. Court of Appeals for the Federal Circuit used a “machine-or-transformation” test, finding patentability if a process is “tied to a particular machine or apparatus,” or “transforms a particular article into a different state or thing.” Bilski held that the Federal Circuit was wrong in using the “machine-or-transformation” analysis as the only test for patentable subject matter, although it found the test to be a “useful and important clue.” And the Bilski Court emphasized that its precedents recognized only “three specific exceptions” to the broad reach of section 101—”laws of nature, physical phenomena, and abstract ideas.”
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