Supreme Court Rules on Business Method Patents - Sort Of

August 5, 2010 - One of the more interesting developments in the world of patents has been the emergence of a class of patents known as business method patents. these patents do not describe a mechanism of a machine or a process of manufacturing, they describe a series of steps used in conducting business. The most infamous of these patents is the patent held by Amazon.com for "1-click" buying which essentially patents the use of a shopping cart for buying things from a website. Amazon sued Barnes and Noble with this patent and licensed it to Apple. The incredibly broad patent was narrowed somewhat last March in response to a re-examination by the USPTO - much to the disappointment of the many technologists who despise patents in general and business method/software patents in particular. People who oppose business method patents had hoped that Amazon's patent would be rejected upon re-examination. When that didn't happen they hung their hopes on the case of Bilsky v Kappos which was about to appear before the US Supreme Court.

Bilski sought to patent a process on “how buyers and sellers of commodities in the energy market protect, or hedge, against the risk of price change.” On June 28, 2010, the Supreme Court decided that Bilski’s invention was an abstract idea and thus not a patent-eligible process. But the anti-patent crowd had little reason top celebrate. The Bilski ruling was specific to Bilski and does not apply to business method patents more generally. In fact, lawyers have interpreted the Court's Bilski ruiling as an affirmation of business method patents.

Bilksi was just one battle. The war over business method patents will continue. In the years to come the situation should become more clear... or not. If you're thinking about patenting a business method be forwarned. It was hard and expensive and risky before Bilski. Now it's even harder, even more expensive and still risky.