My Feb. 24, 2009, blog entry addressed the status of software patents. At that time, I noted that the current state of the law required the application of a two-part test that was adopted by the Court of Appeals for the Federal Circuit for determining whether a process claim for a software or business-method patent represented statutory subject matter.1 See In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d 1385 (Fed. Cir. 2008)(en banc). The test required: (1) a showing that the claim is tied to a particular machine; or (2) a showing that the claim transforms an article. This test is commonly referred to as the “machine or transformation” test.

On June 28, 2010, the Supreme Court determined that the machine or transformation test was not the exclusive test for determining whether a process claim for software or business-method patents is eligible for patent protection. Bilski v. Kappos, 561 U.S. ___ (2010). However, the Court applied the test and determined that the invention at issue was not eligible for patent protection because it represented an attempt to patent an abstract idea.

The Supreme Court’s methodology was similar to the approach that it took in KSR Int'l Co. v. Teleflex, Inc., 550 U.S. 398 (2007), in which the Supreme Court rejected a rigid application of the existing test for determining whether a claimed invention was obvious in favor of a more “flexible” approach.

Unfortunately, the Supreme Court’s Bilski decision provides little guidance in determining whether an invention represents an abstract idea. As a result, prospective applicants must scrutinize the long line of cases in this particular area of the law when they are considering filing an application that includes a method claim directed to software or a business method. Similarly, litigants who are defending against the assertion of a software or business-method patent may need to review their existing invalidity defense if it depends upon a rigid application of the machine or transformation test.2