On October 30, 2008, an en banc Federal Circuit overruled portions of its opinion in State Street Bank and Trust Company v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. 1998), and narrowed the availability of patent protection for business methods. The majority opinion, written by Chief Judge Michel and joined by eight of the other eleven active judges on the Federal Circuit, cited the Supreme Court decisions in Gotttschalk v. Benson, 409 U.S. 63 (1972), Parker v. Flook, 437 U.S. 584 (1978), and Diamond v. Diehr, 450 U.S. 175 (1981), approving of the “definitive test” set forth in those decisions for determining the Section 101 patent eligibility of a process. The court stated that a process is “surely patent-eligible if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” This overrules the portion of its opinion in State Street Bank that held a claim to be patent-eligible if it “produces a useful, concrete and tangible result.”
This decision leaves for future resolution the meaning of “tied to a particular machine” and could simply result in a reworking/reissuance of business methods patents so that the claims are tied more directly to actual machines. The decision also puts at risk a broad range of computer-implemented and information-based patents that have been issued over the past 10 years. It is possible, and even likely, that Bilski will seek certiorari, but careful reliance of the Federal Circuit on specific precedent from the Supreme Court may cause the Court to pass on the issue at this time. Between the impact of this decision and the enormous expansion of design patent rights in the recent Egyptian Goddess decision, patent attorneys, and especially patent litigators, may be very busy in the future.