New Limitations on ‘Business Method’ Patents

Posted Friday, September 21, 2007 by Jim Ruttler.

Ever since the State Street Bank Federal Circuit decision of 1994, the law regarding ‘business method’ patents has been in considerable disarray. It is well settled that abstract ideas, truths, principles, and motives are not patentable subject matter. Instead, patentability is limited to new or improved machines, compositions of matter, and processes. The court in State Street Bank, however, held that a method for managing financial services was patentable because it was a process and that patentability does not depend upon whether the process does business. This decision blurred the distinction between unpatentable ideas and patentable processes and introduced significant uncertainty.

Following the State Street Bank decision, inventor Comiskey filed a patent application for a method of conducting mandatory arbitration. However, the Federal Circuit affirmed a series of patent office rejections and held that standalone business methods are no longer patentable unless they are tied to a machine or composition of matter.

View the Comiskey Decision

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