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Narrow Ruling in Bilski Case Maintains Patentability of Diagnostics, other Biotech Inventions

NEW YORK (GenomeWeb News) — The Supreme Court today upheld the Federal Circuit Court of Appeals' determination in Bilski v. Kappos that certain business method patents are invalid, but rejected the lower court's determination that such patents must be tied to a machine or undergo a "transformation" in order to be patentable.

The decision ultimately upholds the patent eligibility of certain innovations not tied to a physical instrument, such as software, data-driven processes, and medical diagnostics.

The Biotechnology Industry Organization today applauded the decision. BIO had previously filed an amicus brief with the Supreme Court asking it to overturn the lower court’s criteria for determining whether a method or process is eligible for patenting — the so-called "machine-or-transformation test," which requires patentable methods or processes to either be tied to a specific machine or to be transformed into another state or thing.

"The machine-or-transformation test is not the sole test for patent eligibility under [the Patent Act 35 USC] Section 101," Justice Anthony Kennedy wrote in the majority opinion in Bilski v. Kappos. In order for an invention to be patentable subject matter under Section 101, it must be a process, a machine, manufacture, or a composition of matter that is new and useful, but not a law of nature, a physical phenomenon, or an abstract idea. This latter exception is where Bilski's patents failed, according to the Supreme Court.

While the court determined that Bernard Bilski's business method patent claims for hedging risk in commodities trading were invalid, it did so on the grounds that Bilski's patent claims are abstract ideas, not because they failed to meet the machine-or-transformation test.

The Supreme Court "recognized that the lower court’s ruling could have created uncertainty in fields such as advanced diagnostic medicine techniques,” BIO President and CEO Jim Greenwood said in a statement.

He added that BIO is "pleased that the Court made it clear in today’s decision that the patent system was designed to be broad and inclusive in order to promote innovation."