The U.S. Supreme Court has – finally – issued its opinion in Bilski v. Kappos.  For such a long-awaited decision, it is – surprisingly – unanimous.

You may view the opinion here.

The narrow issue was whether an inventor could patent a method for hedging energy costs against changes in the weather.  The answer to that narrow question is:  No.  Therefore, after years of waiting, the Supreme Court upheld the USPTO’s initial refusal.

However, what was more in doubt was how much the Court would reign in the notion of business method patents.  The Court did not, in fact, sign the death warrant of business method patents.  Rather, the Court rejected the Federal Circuit’s narrow test that would require patents to involve a machine or transformation of matter and merely said patents can’t cover an abstract idea.

A federal appeals court first approved business method patents in a 1997 decision involving State Street Corporation. That same year, Amazon.com won a patent for its one-click ordering system, which struck many critics as being too obvious and unconnected with machinery to be patentable. Amazon.com immediately went after rivals in the new Internet retail industry seeking royalties for its supposed innovation.

The Supreme Court first upheld a software patent in 1981, involving software controlling a process for curing rubber, and since then patents have become a vital bulwark protecting the assets of big companies like IBM and Microsoft.

The Supreme Court has now held that the machine-or-transformation test is not the only test to determine whether a claim recites statutory subject matter.

The Supreme Court did not define what constitutes a patentable “process” other than to refer to the definition in 35 U.S.C. §100(b) (which defines “process” as a “process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material”) and to cite to its prior precedent Benson, Flook and Diehr. The Supreme Court also noted that it was not endorsing past interpretations of §101 by the Federal Circuit, such as the “useful, concrete and tangible result” test set forth in State Street Bank & Trust v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373 (CA Fed. 1998).

Thus, business method patents remain alive and well, for now.