Bilski (“The Appellant”) filed a patent application pertaining to an explanation on how commodities buyers and sellers in the energy market can protect, manage or hedge against the risk of price changes before the Patent and Trademark Office (the “USPTO”).

The USPTO rejected the application on the ground that the claimed invention was not implemented on a specific apparatus. In addition, the USPTO stated that the claimed invention merely manipulated an abstract idea that solved a purely mathematic problem.

The Appellant brought the claims before the Board of Patent Appeals and Interferences (the “Appeal Board”), which affirmed and agreed to the decision of USPTO hook, line and sinker. The Appellant further appealed to the United States Court of Appeals for the Federal Circuit (“The Federal Circuit”) and then the United States Supreme Court (“The Supreme Court”), both of which further affirmed the decision of the USPTO and the Appeal Board.


In affirming the decision of the Appeal Board, the Federal Circuit relied on the Patent Act and previous decisions of the United States Supreme Court. In addition, the Federal Circuit reiterated that for an invention to be patentable, it must be tied to a particular machine or apparatus and must transfer a particular article into a different state or thing. Thus, the Appellant’s patent failed this test and was not a patentable subject matter.

Upon further appeal, two significant issues were couched for determination before the Supreme Court. The first issue was whether the Federal Circuit erred in using the machine test to determine the patentable subject matter. The other issue was whether the machine test could prevent patent protection for many business methods, thus contracting the intent of the Patent Act.

In a unanimous decision, the Supreme Court affirmed the decision of the Federal Circuit and held that the Appellant’s invention was said not to be patent-eligible. Justice Kennedy delivered the leading judgment, wherein the Supreme Court believed that the Federal Circuit did not err in using the machine test.

Although, in contrast to the Federal Circuit’s decision, the Supreme Court held that the machine test was not the only criteria in determining patent eligibility. In giving his opinion, Justice Kennedy thoroughly considered the four categories stated for patent eligibility in section 101 of the Patent Act. The categories are as follows: process (es), machine (s), manufacture (s) and composition (s).

Justice Kennedy further stated that the eligibility enquiry was on a threshold. Hence, even if an invention falls under any category, it must satisfy the conditions and requirements of the title. Finally, Justice Kennedy said three exceptions were provided for section 101 by the Supreme Court: laws of nature, physical phenomena, and abstract ideas. Chief Justice Robert, Justice Thomas and Justice Alito joined the opinion of Justice Kennedy in totality, while Justice Scalia joined the concurring opinion of Justice Breyer.


Although Justice Stevens gave a concurring judgment, he disagreed with the court’s case disposition. In his view, the general method of engaging in business transactions is not a patentable “process”  within the meaning of section 101 of the Patent Act and even any series of steps that is not itself an abstract idea or law of nature might constitute processes provided for under section 101 of the Patent Act. 


Disclaimer: The views and opinions expressed throughout this blog are the views and opinions of the individual author(s) and/or contributor(s) and do not necessarily reflect the views and opinions of our firm, CIONCA IP Law. P.C. 

PATENT, Trademark and IP Law Blog

  • CIONCA IP TEAM (SE)2/18/2022 4:22:47 PM

    Machine or Transformation

Marin Cionca | Founder of CIONCA IP

Marin Cionca, Esq.

Registered Patent Attorney

USPTO Reg. No. 63899

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About CIONCA® IP Law firm: We are an Irvine, Orange County, California based boutique intellectual property law firm with a focus on patent and trademark application, prosecution, opinion, licensing and IP enforcement services, including IP litigation, offering its IP services, other than IP litigation, primarily at flat fee rates. We serve local OC (Orange County) clients, as well as clients from the Los Angeles, San Diego and Riverside Counties and clients throughout the state of California, the United States and also international clients, such as EU clients.

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