I know a little bit about intellectual property given Rismark has done a lot of work in this domain. The US supreme court has just delivered an interesting finding on the patentability of hedging strategies, which Corrs Chambers Westgarth--arguably Australia's pre-eminent law firm--have summarised for our benefit below.
On 28 June the US Supreme Court delivered its long-awaited decision in Bilski v Kappos.
Background
In Bilski, the applicant sought patent protection for a method of hedging commodity prices in the energy market. The patent examiner rejected the application on the basis that it merely disclosed an abstract idea. The United States Court of Appeals for the Federal Circuit affirmed the examiner’s decision, stating that the claimed invention was not patentable because the claimed process was not related to a machine or did not transform an article to a different state (the machine-or-transformation test).
Abstract ideas are not patentable (the Court)
The US Supreme Court dismissed Bilski’s further appeal. The Court reaffirmed the key principle that mere abstract ideas were not patentable. Following its previous decisions in Gottschalk v Benson, Parker v Flook and Diamond v Diehr, the Court held that Bilski’s invention of hedging price risk was not a patentable process but, rather, an unpatentable abstract idea.
Machine-or-transformation test is an indicator of patentability rather than the sole test (the Court)
Overruling the Court of Appeal on this point, the Supreme Court held that the machine-or-transformation test was a useful clue or indicator of patentability, rather than the sole test for determining the patentability of a process.
Machine-or-transformation test is inadequate for Information Age inventions (Chief Justice Roberts and Justices Kennedy, Thomas and Alito)
Justice Kennedy, representing the views of four justices, observed that the machine-or-transformation test may have been useful for evaluating processes in the Industrial Age but is inadequate as the sole test for determining patentability of inventions in the Information Age, such as software, advanced diagnostic medical techniques or inventions based on linear programming, data compression and digital signals. (His Honour reserved the position as to the patentability of these specific examples.)
