Bilski vs. Kappos: The United States Supreme Court Speaks on Software and Business Method Patents

Executive Summary
The U.S. Supreme Court issued a decision entitled Bilski v. Kappos on June 28, 2010 addressing the requirements for software, business methods, and other “processes” to be considered as eligible subject matter for patents. The June 28 decision has softened a rigid and more restrictive standard adopted previously by a lower court. The implications of this decision for patenting software, business methods, and analytical procedures are briefly discussed.

Patents for software and business methods have long been publicly controversial. After the Supreme Court placed software methods in the legal mainstream in Diamond v. Diehr, 450 U.S. 175 (1981), lower courts have attempted to define the circumstances in which software and business methods are patentable. In 1998 the U.S. Court of Appeals for the Federal Circuit declared that methods of doing business are eligible for patents in State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998). In practice, the U.S. Patent and Trademark Office (“USPTO”) took an expansive view of the patent-eligibility of software and business methods for patents until the release of the 2005 Interim Guidelines for Patent Subject Matter Eligibility, in which the USPTO instructed Examiners to reject processes unless they “transform an article or physical object to a different state or thing, or otherwise produce a useful, concrete and tangible result.” 

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