Bilski v. Kappos
Supreme Court of the United States
November 9, 2009, Argued; June 28, 2010, Decided
[*597] [***799] Justice Kennedy delivered the opinion of the Court, except as to Parts II-B-2 and II-C-2.
The question in this case turns on whether a patent can be issued for a claimed invention designed for the business [*598] world. The patent application claims a procedure for instructing buyers and sellers how to protect against the risk of price fluctuations in a discrete section of the economy. Three arguments are advanced for the proposition that the claimed invention is outside the scope of patent law: (1) It is not tied to a machine and does not transform an article; (2) it involves a method of conducting business; [****9] and (3) it is merely an abstract idea. The Court of Appeals ruled that the first mentioned of these, the so-called machine-or-transformation test, was the sole test to be used for determining the patentability of a “process” under the Patent Act, 35 U.S.C. § 101.
Petitioners' application seeks patent protection for a claimed invention that explains how buyers and sellers of commodities in the energy market can protect, or hedge, against the risk of price changes. The key claims are claims 1 and 4. Claim 1 describes a series of steps instructing how to hedge risk. Claim 4 puts the concept articulated in claim 1 into a simple mathematical formula. Claim 1 consists of the following steps:
“(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity [**3224] at a 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; andRead The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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561 U.S. 593 *; 130 S. Ct. 3218 **; 177 L. Ed. 2d 792 ***; 2010 U.S. LEXIS 5521 ****; 95 U.S.P.Q.2D (BNA) 1001; 78 U.S.L.W. 4802; 2010-1 U.S. Tax Cas. (CCH) P50,481; 22 Fla. L. Weekly Fed. S 703
BERNARD L. BILSKI and RAND A. WARSAW, Petitioners v. DAVID J. KAPPOS, UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR, PATENT AND TRADEMARK OFFICE
Prior History: [****1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT.
In re Bilski, 545 F.3d 943, 2008 U.S. App. LEXIS 22479 (Fed. Cir., 2008)
patent, business methods, invention, patent law, machine-or-transformation, innovation, abstract idea, petitioners', manufacture, processes, machine, technological, useful arts, subject matter, do business, unpatentable, progress, conducting business, series of steps, commodity, courts, terms, transform, eligible, clue, patent-eligible, consumers, hedging, limitations, monopolies
Patent Law, Subject Matter, General Overview, Anticipation & Novelty, Specifications, Description Requirement, Nonobviousness, Utility Patents, Process Patents, Elements, Governments, Legislation, Interpretation, Infringement Actions, Defenses, Computer Software & Mental Steps