Federal Circuit To Consider 'Business Method' Patent Eligibility In En Banc Rehearing

The U.S. Court of Appeals for the Federal Circuit has ordered rehearing en banc in In re Bilski, No. 2007-1130 (Fed. Cir. Feb. 15, 2008) (order granting rehearing en banc) to determine the extent to which "business methods" are eligible for patent protection under U.S. law. The Federal Circuit's decision in Bilski could have significant implications regarding patent-eligible subject matter in the area of business methods. Indeed, the Court has indicated it might reconsider its landmark 1998 decision in, Inc., 149 F.3d 1368 (Fed. Cir. 1998), wherein the Court held there is no "business method" exception to patentable subject matter.

The hearing in In re Bilski is set for May 8, 2008, and amici briefs may be filed without leave of court on the following questions:

Whether claim 1 of the 08/833,892 application [the Bilski application at issue] claims patent-eligible subject matter under 35 U.S.C. 101(Section 101).

What standard should govern in determining whether a process is patent-eligible subject matter under Section 101?

Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process. When does a claim that contains both mental and physical steps create patent-eligible subject matter?

Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under Section 101.

Whether it is appropriate to reconsider State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999) in this case and, if so, whether those cases should be overruled in any respect.

Claim 1 of the Bilski application relates to a method practiced by a commodity provider for managing (i.e., hedging) the consumption risks associated with a commodity sold at a fixed price. "Consumption risk" can refer to the need to use more or less energy due to the weather. The claim does not recite how the steps are implemented and are broad enough to read on performing the steps without any machine or apparatus.

The claims in Bilski thus differ from the claims in State Street Bank, which recognized the patentability of a method of transforming data representing discrete dollar amounts into a final share price. In State Street Bank, the claims did recite computer processor means, storage means, and other means corresponding to an arithmetic logic unit...