The patent covered a technique for hedging for commodities traders in the energy market - a classic business method patent. The examiner rejected it because it was not implemented on specific apparatus (as processes generally need to be), it merely manipulated an abstract idea,, and it solved a purely mathematical problem. The Board of Patent Appeals and Interferences agreed and affirmed. The Court of Appeals for the Federal Circuit also affirmed, rejecting its own test for whether a claimed invention was a patentable process (whether it produced a "useful, concrete, and tangible result", as in State Street). Instead, it applied the "machine-or-transformation" test - a process can be patented if it is tield to a particular machine or apparatus, or it transforms the particular article into a differnt state or thing. On that basis the CAFC held the application was not patent-eligibible. In doing so it threw down a gauntlet to the Supreme Court: the machine-or-transformation test was crafted from precedents from that court.
The Supremes declined the challenge, and threw the gauntlet back. They affirmed the CAFC judgment but did not endorse an exclusive machine-or-transformation test. There was no need to look further than the bar on patenting abstract ideas. The fact that the Bilski patent involved abstract ideas was reason enough to refuse it, and automatically this meant that the machine-or-transformation test could not be the exclusive one for patentability of processes. Nor was there any need to define further what constitutes a patentable process. Justice Kennedy gave the opinion of the court, and concluded:
Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act’s text. The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr. And nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357. It may be that the Court of Appeals thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents, including (but not limited to) application of our opinions in Benson, Flook, and Diehr. In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text. The judgment of the Court of Appeals is affirmed.I sense that it's a bit of a disappointment - commentators were looking forward to much more robust statement about exotic patents, such as software and business methods ones. Instead, it sounds as if the court has said look at what the Patent Act says and work it out from there. The "machine-or-transformation" test is a tool to help, but not a rule to be applied in all cases. Nevertheless, Dennis Crouch detects something more in the judgment:
Although not rejected by the majority opinion, it is clear that the broad “useful, concrete, and tangible result” test is dead. That test is conclusively rejected by what I term the Anti-State-Street Majority — a majority created by the combining the two concurring opinions in Bilski and their five-justice majority.Well, it would be a shame if software and business methods patents suddenly became cut and dried so there was nothing left to argue about!