A Madness to the Method? The Impact of Bilski on Method Patents

Faulting the Federal Circuit's interpretation of the patent statute, the Supreme Court explained that ' 101 broadly describes subject matter eligible for patenting. Looking to the Court's prior case law, the opinion identified only three exceptions to the statute's broad patent-eligibility principles: laws of nature, abstract ideas, or natural phenomena. Bilski, slip op. at 5. While the Court recognized that the Machine or Transformation test is a useful tool for analyzing processes under ' 101, it rejected as inconsistent with the broad statutory language the Federal Circuit's conclusion that the test is the sole or exclusive way in which to determine patent-eligibility for processes. Id. at 16.

Nevertheless, the Supreme Court affirmed the Federal Circuit's judgment that the claims of Bilski's patent application were not patentable subject matter under ' 101, yet did so on different grounds. Rather than applying the Machine or Transformation test to the Bilski claims, the Supreme Court focused on the question of abstractness, and found that the claims were merely directed to abstract ideas. According to the Court, the Bilski application attempted to patent the concept of hedging risk, but allowing such a patent would pre-empt use of the risk hedging approach in all fields. Other claims in the Bilski application were similarly ruled unpatentable as nothing more than attempts to limit the risk hedging concept to the energy market field or to add token post-solution activity; but the limitations were deemed insufficient, in light of the Court's precedents, to make the claims patent-eligible.