At the well-attended argument of In re Bilski before the Supreme Court yesterday, the Justices expressed skepticism over the patent-eligibility of business methods, suggesting that such methods have not historically been considered patentable and should not be now. Several of the Justices also expressed concern that the Federal Circuit’s “machine or transformation" test for patent-eligibility is too restrictive and may inadvertently exclude future inventions. Thus, both sides were pressed to articulate a different test, and the suggested alternatives proposed by both sides did not seem to satisfy the Court.

In probing the preferred scope of patent-eligibility, Justice Scalia asked what was wrong with limiting processes to traditional manufacturing arts. Justice Ginsburg noted that the broad test proposed by Bilski would include tax-avoidance methods, estate planning methods, methods on choosing a jury, and other such methods which traditionally have not been considered patentable. Justice Breyer described his inventive method of teaching antitrust law while keeping 80% of the class awake, musing that framers of the Constitution did not envision that he could patent such a method. Chief Justice Roberts also expressed skepticism that the “physical steps” required by the Bilski claim, which can be performed by picking up a telephone and calling various entities, were sufficient to establish patentability of the claim.

Justices Breyer and Sotomayor in particular pushed each side for a test that would draw an appropriate line concerning the patent-eligibility of business methods. Justice Sotomayor asked for a reasonable limit on the definition of “useful arts” in Section 101, questioning whether there is some benefit to society of allowing patents on human methods that cannot be accomplished by allowing patents on the machines used to perform such methods. Justice Ginsburg suggested a “technical arts” approach such as used in Europe and other countries, which neither party supported. After discussing several options, Justice Breyer admitted that he did not know how to strike the proper balance such that “patent law will do no more harm than good.”

The Court also discussed the Federal Circuit’s opinion in the State Street Bank case, which is cited as confirming the patentability of business methods, even though the invention in that case was a computerized system. Justices Stevens and Kennedy were interested in whether the State Street decision would come out the same way under the machine-or-transformation test, and the government confirmed that it would still be patentable as a machine. This led Chief Justice Roberts to discuss a footnote in the government’s brief in which the government suggested that a non-patent-eligible business method could be rendered patentable by using a computer to perform some of the steps. While this is the Patent Office’s position, several of the Justices were clearly concerned that this requirement did not meaningfully limit the patent-eligibility of business methods because the eligibility requirement is easy to circumvent.

The tone of the Justices' questions suggest that Mr. Bilski will likely go home empty-handed. How that conclusion is reached, however, may also have a significant impact on the scope of patent-eligible subject matter concerning business methods, regardless of whether they are tied to the use of a computer. It is possible that the Court may affirm the rejection of Bilski’s claims as mere “abstract ideas” under its existing precedent. More likely, the Court will try to refine or revise the Federal Circuit’s “machine or transformation” test to achieve a better balance that leaves open the possibility of patenting future technologies that would not satisfy the current test.