Last week, the Court of Appeals for the Federal Circuit published an opinion that may significantly impact owners of and applicants for patents that could be construed as relating to pure business methods, particularly Internet and financial industry related inventions. The issue addressed in In re Bilski was whether pure business methods are patentable subject matter, or, rather, unpatentable ideas because they lack a tangible result. Specifically, to be patentable, the Federal Circuit stated that the claimed method must be tied to a particular machine or apparatus, or transform an article into a different state or thing, and not just be an intangible idea. The Federal Circuit rejected the previous tests for determining patentable subject matter, including the “useful, concrete and tangible result” and the “technological arts” tests. The Federal Circuit clarified that, to constitute patentable subject matter, the use of a machine or transformation of an article must impose “meaningful limits” on the scope of the claims, be “central to the purpose of the claimed process,” and cannot be “merely insignificant extra-solution activity.”

While the extent of the Patent Office’s and courts’ interpretation of the Federal Circuit’s opinion in Bilski is yet to be resolved, Bilski will not likely result in an inability to obtain meaningful patent protection for these methods, if the claims are carefully drafted. For example, the Federal Circuit cited prior decisions in which the transformation of raw data into a computer-rendered visual depiction of the data was still patentable subject matter. At the least, Bilski may create some uncertainty as to whether applicants for patents and current owners of business method patents involving a pure process, rather than a process that can be tied or applied to a tangible device, system or composition, will succeed in protecting their subject matter. We expect that the breadth of the Federal Circuit’s decision will be tested and further refined in the coming year