In Re Bilski - Majority Opinion

Majority Opinion

The en banc Federal Circuit upheld the rejection, 9–3. The majority opinion by Chief Judge Paul Redmond Michel characterized the issue as whether the claimed method is a patent-eligible "process," as the patent statute (35 U.S.C. § 101) uses that term. While any series of actions or operations is a process in the dictionary sense of that term, the court explained, the Supreme Court has held that the statutory meaning is narrower than the dictionary meaning which "forecloses a purely literal reading." Patent-eligible processes do not include "laws of nature, natural phenomena, abstract ideas." The limiting legal principle applies not just to processes, but to anything on which a patent is sought. As a trilogy of Supreme Court decisions on patent-eligibility from approximately three decades ago had taught, "Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work." Therefore, the question was whether Bilski's process fell within any of the prohibited categories (that is, was a claim to a "principle"), and the underlying legal question was what legal tests or criteria should govern that determination when a claim is directed to a principle.

The court concluded that prior decisions of the Supreme Court were of limited usefulness as guides because they represented polar cases on the abstraction and concreteness spectrum. Nonetheless, a legal test could be distilled from them: "A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing." Not only did the patent-eligibility trilogy (Benson, Flook, and Diehr) support this test, the court explained, but so too did earlier Supreme Court precedents dating back well into the 19th century.

The court then considered whether this two-branch test should be considered all-inclusive, that is, as stating indispensable conditions of patent-eligibility. It concluded that the answer was affirmative, even though much of the language in the Supreme Court's patent-eligibility trilogy was more reserved. The Federal Circuit placed great weight on the use of the definite article in several Supreme Court statements that transformation and use of a particular machine provided "the clue to the patentability of a process claim." At the same time the court placed no weight on the fact that the Benson Court had not accepted the Government's argument that the case law "cannot be rationalized otherwise."

The Federal Circuit observed that two caveats exist to the transformation-machine test: (1) a field-of-use limitation is insufficient to avoid the prohibition against pre-emption, as Flook expressly held; and (2) conventional or obvious "insignificant post-solution activity" does not make what is otherwise a claim to a principle patent-eligible (again referring to Flook). The court added that insignificant pre-solution activity (such as data-gathering) is equally ineffective, and so too is an insignificant step in the middle of a process (such as recording a result).

The court then rejected other proposed tests of patent-eligibility that had been suggested since the Supreme Court's trilogy. Several Federal Circuit panel decisions had held that a process was patent-eligible if it produced "a useful, concrete, and tangible result" — such as the transformation of financial data from one form to another form. Thus, in the State Street Bank v. Signature Financial Group case the court had upheld a patent on a tax-avoidance scheme under this standard. The court now recognized that this test is "inadequate," as a dissenting Supreme Court opinion had already stated, and therefore backed away from the language, denying that the Federal Circuit had ever "intended to supplant the Supreme Court's test." The court did not, however, expressly hold that State Street should be overruled: it merely dropped a footnote stating that "those portions of our opinions in State Street and AT&T relying solely on a 'useful, concrete and tangible result' analysis should no longer be relied on."

The court next turned to the "technological arts" test (a patent-eligible advance must be "technological" in nature) and rejected it on several grounds: The meanings of "technological arts" and "technology" are disputed and ambiguous. No court has ever adopted the test. The technological-arts test is not an equivalent of or "shortcut," the court insisted, that can be used instead of the transformation-machine test. "Rather, the machine-or-transformation test is the only applicable test and must be applied, in light of the guidance provided by the Supreme Court and this court, when evaluating the patent-eligibility of process claims."

On the other hand, the court refused to adopt a test that barred business methods, under that rubric, from patent-eligibility. Also, while the court stated that the machine-or-transformation test was the applicable test, the Supreme Court in Benson had stated that there could be cases where a claim that fails the "requirements of prior precedents" may still nonetheless be patent-eligible subject matter. Benson, 409 U.S. at 71. Similarly, software could not categorically be excluded. The court also stated that future developments may alter the standing or the application of the test.