Business Method Patents Limited by U.S. Supreme Court

The U.S. Supreme Court ruled against two men who sought to patent a system for hedging energy trades today in the highly anticipated Bilski v. Kappos opinion. The Supreme Court affirmed the U.S. Court of Appeals for the Federal Circuit’s decision against Bilski that said methods can be patented only if they have some physical component, through either a connection to a machine or their power to transform an item into a different state. The ruling was the first time in 29 years that the court voted on what types of innovations qualify for legal protection. While the decision was unanimous, the justices divided 5-4 in their reasoning, with the majority declining to bar all patents on methods of conducting business. Finnegan partner J. Michael Jakes who represented Bilski and Warsaw, said it may just mean a rewording of the patent application to “make the claims less abstract.” “For most patent owners, it’s a very good decision,” Jakes stated. “It eliminates the federal circuit’s very restrictive test and leaves open patents for things that are not physical” inventions.