Lex 8256: The Law in
Internet business method patents (Michael)
Business method patents – What are they,
and should they be patentable?
Statute that governs whether
or not inventions are patentable
U.S.C. § 101 – Patentable Subject Matter.
Historically, §101 disallowed patents on abstract ideas, newly
discovered mathematical formulas, or laws of nature/physics.
Inventions pertaining to new “methods of conducting business” teetered
on the line of patent eligibility -- until the State Street case in 1998 (149 F.3d
1368), where the Federal Circuit held that business methods are
eligible for patent protection if they produce a “useful, concrete and
For a quick reading on the effect of State
Street and a critical view of the reactive mass flow of business
method patent applications, read pages 1-6 only of Michael J. Meurer, Business
Method Patents and Patent Floods (later published as 8 Wash. Univ.
J. L. & Pol'y 309 (2002)).
Business method patents became a hot commodity in the 90s and early
2000’s. Arguably the most famous business method patent is
Amazon’s patent on its 1-Click checkout system (a method of ordering
products online only clicking once). Read:
How has §101 been analyzed since State Street and up to
2010? Read the section of the Wikipedia entry marked
"United States," in the "History" discussion, at
Bilski v. Kappos, 130 S. Ct.
3218 (2010) – read only the majority opinion. This is the mother
of all business method patent cases, and was decided in 2010. By
concluding that the “machine-or-transformation” test is not the only
test to analyze whether a business method is patentable, the Court
necessarily broadened patentable subject matter, while still finding
against Bilski’s patent application. Do you agree with the result?
Post-Bilski cases are scarce,
since the case is so recent. However, read Mayo
v. Prometheus Labs: Bilski and Medical Methods (June 29,
2010). The Federal Circuit heard
the case on remand, and affirmed its original decision using Bilski as its new precedent.
Do you agree with Bilski?
Here are some articles that discuss both the potential benefits and
negative impacts of Bilski.
Positive take on Bilski:
Kimton Eng, Bad
for Bilski, good for business (Aug. 27 - Sept. 2, 2010)
Negative take on Bilski:
A great post-Bilski discussion, including
USPTO's response, subsequent court cases interpreting Bilski, and consideration of the
effect in the future after Bilski:
Richard Raysman & Peter Brown, Process
Patents in the Wake of 'Bilski' (Jan. 12, 2011)