Are Business Methods Patentable?

In re Bilski, the courts must re-interpret 35 U.S.C. § 101, which states that a process can be patented. In State Street Bank v. Signature Financial Group, the court decided that business methods were patentable as long as the process produced a “useful, concrete, and tangible result” [1]. In re Comiskey, the courts put an end to business method patenting that ensued, asserting that “a process must be ‘tied to a machine’ or ‘create or involve a composition of matter or manufacture.” [2] Subsequently, in the In re Bilski hearing, Bilski sought to patent his “method for commodities dealers to minimize risk through hedging contracts”[3].  The court is forced to either return to the narrow interpretation of s.101 by overruling the State Street Bank case or to broaden its scope.

The question is: What would be the consequences of defining a “useful process” within the meaning of the Patent Act, narrowly or broadly?  

If a broad interpretation was favored, business methods would be patentable. However, the impact of this decision would mean that other methods, not connected to an apparatus or machine of some kind, would be patentable too. In other words, as mentioned in the article, everything from a ‘curve ball’ to ‘chiropractics’ becomes fair game. Such a broad scope could increase patenting as was evidenced after 1998. By narrowly interpreting s.101, we avoid such impacts while also largely maintaining coherence with precedent.

The benefits of allowing for a broad interpretation include stronger protection for innovation. By giving inventors the right to exclude others from using their disclosed patent information, the law encourages innovation. In turn, innovation leads to economic progress, providing an essential incentive. 

While a broad reading will mean that stakeholders, such as corporations, business schools and universities, can protect their investments through patenting, it also means that the corporations with the greatest wealth may monopolize a great number of business methods, excluding other stakeholders from taking advantage of their use. Narrowing the interpretation of s.101 would mean that business methods, if accessible, could be utilized by the public. However, it is unlikely that stakeholders would make their business methods accessible when they cannot be protected through patenting. Trade secrets become more and more probable when legislative provisions do not protect innovation.

Despite arguments for broadening the s.101 interpretation, largely its inducement of innovation, a narrow reading pre-State Street Bank did not necessarily put a hamper on innovation. After reading the article, I feel that the decrease in patent litigation, the narrow focus on what constitutes a ‘process’ in line with what the legislature intended and the interest of stakeholders and the public at large seem to suggest that the courts will disregard the State Street Bank case and follow suit with the Comiskey decision. I would have to agree with this finding. After all, if we cannot draw the line at business methods, where will it be drawn? Opening the door to business method patents opens an even greater door to patenting other abstract processes too, making practically everything patentable!