State Street: Virtually Anything Is Patentable

by Robert C. Scheinfeld and Parker H. Bagley

"Virtually anything is patentable." These are the words now echoing in court decisions (see Hughes Aircraft Company v. United States,(1) July 28, 1998), in courtrooms and in conference rooms across the country in the wake of the Federal Circuit's recent decision in State Street Bank & Trust Co. v. Signature Financial Group, Inc.(2) There, the patent at issue was directed to a "Hub and Spoke" computerized business system allowing mutual funds (Spokes) to pool their assets into an investment portfolio (Hub) organized as a partnership to realize various administrative and tax advantages.

According to the court, the patent claimed patentable subject matter because of its "practical utility." The fact that the patented programmed machine produced a "useful, concrete, and tangible result" was enough -- "even if the useful result is expressed in numbers, such as price, profit, percentage, cost, or loss." The Federal Circuit thus made clear