“In re Bilski” Establishes Machine-Or-Transformation Test

A decade ago in State Street Bank & Trust Co. v. Signature Financial Group, the United States Court of Appeals for the Federal Circuit issued an opinion that has been widely perceived to encourage a substantial increase in patents directed to business methods and to software programs. On October 30, 2008, in an eagerly anticipated opinion in In re Bilski, the Federal Circuit, en banc, rejected the test for patentability that it had adopted in State Street as well as other tests frequently used to determine the patentability of process subject matter under 35 U.S.C. §101. The ruling of In re Bilski was narrowly focused on the "utility" requirement for patentability with respect to process claims, which is undertaken independently of whether the claimed process is novel or non-obvious. While the ultimate impact of the ruling remains to be seen, one can predict with some certainty that new approaches will be needed to obtain business method patents and certain software