Software and business data processing has followed an unbroken evolutionary path from mechanical technology up to today's software-controlled microprocessors. Automated business data processing itself dates back over a hundred years. The USPTO, however, was historically reluctant to grant patents on inventions relating to computer software and business methods.

In the 1970s, the USPTO avoided granting any patent if the invention utilized a calculation made by a computer. Their rationale was that patents could only be granted to processes, machines, articles of manufacture and compositions of matter.

In the 1980s, the Supreme Court forced the USPTO to change its position. By 1995, the USPTO developed guidelines for patent examiners that reflect a series of court decisions that established that software patents were here to stay.

In 1998, the State Street decision triggered an awareness of the "business-method claim" as a viable form of patent protection. State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998).

The USPTO also developed a special examination class for business methods – class 705. This class contains numerous small groupings and four major groupings directed to specific and general business data-processing machines and methods. These machines and methods still heavily reflect the electrical and computer engineering that underlay them.

Last year, a key test set forth in the State Street decision was overruled in the Bilski decision – In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d 1385 (Fed. Cir. 2008)(en banc). The Bilski decision introduced a two-part test that can be used to determine whether software or a business method represents statutory subject matter. Under Bilski, an applicant may show that a process claim is statutory subject matter either by: (1) showing that the claim is tied to a particular machine; or (2) showing that the claim transforms an article.