This morning, the Supreme Court decided the long-running Bilski case (PDF) on business method patents—a case with broad applicability to software patents. As expected, the Court struck down the Bilski patent itself as an unpatentable "abstract idea"—but it also said that business method and software patents can be legitimate.
The case began when one Bernard Bilski tried to patent "a method for managing the consumption risk costs of a commodity sold by a commodity provider." The application included some broad statistical algorithms for hedging risk, but then asserted broad ownership over the way that these principles could be implemented by others.
The Patent Office rejected the application on the grounds that it was not a tangible invention. Two federal courts have agreed, and the Supreme Court today concurred. Bilski's idea is an unpatentable abstract concept, not an "invention."
But the meat of the ruling concerns the broader patentability of similar claims. For years, the Patent Office has tried to rein in broad patents by limiting them to inventions that involve a machine or a transformation of one thing into another. In other words, broad "process" and algorithmic patents have been frowned on.
