Bilski: The Landmark Decision That Wasn't
In the highly anticipated decision, Bilski v. Kappos, the Supreme Court affirmed the rejection of a specific business method patent, but left the door wide open on the validity of thousands of similar patents. In what has become typical for decisions under the Roberts Court, the majority opinion was narrowly defined. The court ruled only on the specifics of the case while failing to provide much guidance for similar patents.
Watching the case intently were both sides of the patent divide. Of course, large sectors of the economy depend on patent rights for growth and innovation, and many feel that more patent rights further innovation. However, there exists a large segment of the business community, including many in the tech industry, who were hoping the court would take this opportunity to put an end to controversial business method patents (and software patents) by applying the "machine or transformation" test adopted by the Federal Circuit. The test requires any patent to either: 1) be tied to a particular machine devised to carry out a process in a non-conventional, non-trivial way, or 2) transform an article from one thing or state to another. Abstract ideas like business methods would not satisfy the test.
At issue in Bilski was a rejected business method patent for a system to hedge on energy prices using weather projections. And while the court rejected this particular patent, it went out of its way to state that it was a narrowly defined decision, and the machine or transformation test is only "useful and important clue," but should not be the sole test. Many justices on the court expressed doubt about the validity of business method patents, but a majority of them were not ready to categorically exclude them from patentability. The result is that thousands of business method patents and software patents remain valid, but future litigation will be needed to determine which ones. So the lesson as always: nobody really wins except the lawyers.
