1 (Slip Opin i o n) OCTOBER T ERM, 20 09 Sy llabu s N O TE : Wh er e it i s feas ibl e , a s yllab u s (h ead n ot e) wil lbe rel e as ed , as is bein g d o n e incon n ecti onwithth is cas e , a tth e ti meth e op in i o n is is s u ed

. Th e s yll abu s con s titu tes n o p a rt of th e op in i o nof th eC o u r t bu t h a s be en pre p are dbyt h e Re po rte ro f De ci sio n s fo r t h e co nveni e nce of t h e reade r . Se e United Statesv. Detroit Timbe r& Lumb er Co., 200U. S

. 3 21, 337

. 

# SUPREME CO URT O FTHE UNI TED STATES
Sy llabu s 

### BILSKI ET AL


### . v . KAP P O S, U N DE R SE CRE TARY OF COMME RC E FOR INT E LLE CTUAL PR OP E R TY AN D

DIREC TOR , PATE NT AND TRAD EMAR K OFFICE CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT No. 08–9 64. Ar g u ed Nov e mber9, 2009 —Dec ided Ju ne 28, 201 0 Petitioners’ patent applicatio n seek s protection for a claimed invention

th at ex pl ain s h o w c o mmodit i es bu y e rs and sellers in the energy mar ket can protect, or hedge, against th e risk of pricechanges. Thekey cla i m s a r e claim1 , which d e s crib e s as e ries of s t eps inst ruct ing how to h e dg e r i sk, an d c l aim 4, wh ic hplac es th e c l aim 1 c o n c ept in to a simple ma thematic a lfor m ula. The r e mainingc l aims ex plain how c l aims 1 an d 4 c a nbe app l i e d to allow en er gysu pplier s an d c o n s u m er s to minimi ze the r i sk s r e sultingfr om fluc tuations i nmar k et de

mand. The p a tent ex amine rr ejec t ed the application on the grounds that the inv e ntion is not i m p l emente d on a specific appar a tus, merely man i pu late s anabs tr ac t i d ea, an d solv es a pu r e ly math em atic a l problem. The Board of Pate nt Appeal s an d In ter f er enc e s agr eed an d a ffirm ed. TheFedera l Circu it , in t u r n , a f f i rm ed. Thee n b a n c court rej e ct ed it s prior t e s tfor de t e rm ining w h et her acla i m e d invent ion was apa tentab le “pr o c e ss ” underPatent Ac t, 35 U. S. C. §10 1

— i.e., whether the invention produced a“us e ful, conc rete, a n d ta ngib le re

sult,” see, e.g., State Street Bank& Trus tCo v. Sign at ure Fi nancial Group, Inc

. , 1 49 F. 3d 136 8 , 1373—h o ldi n gin stead th at a c l aime d process is pa t e nt eligible if: (1) it is tied to a particular machine or appar a tu s, or (2) it tr an sfor ms a par t ic u l arar tic l e in to a differ e n t s t at eo rt h i n g . C o n c l u d i n gth a tt h is “m ac hine-or

- tr ansformation te st” is the sole tes tfor determining patent eligibility of a “p rocess” under §101, th e c o u r t applied th e test an d h e ld t h at th e applic ationwas n o t patent eligib le

. Held:The jud g ment is affirmed.2 BILSKI v. KAPPOS Sy llabu s 545 F. 3d 94 3, affir m ed. J US TI CE K ENNEDY delivered the opinion of the Cour t, exc e pt as to Par t s II– B– 2 an d II–C– 2, c o n c lu din gth atpetition er s’ c l aimed inv e n tionis n o t pat e n teligible. Pp. 4–8, 10– 11, 12– 16.

(a) Section 10 1 specifies four independentcategories of inventions or discoveriesthat are patent e ligible: “process[es],” “ m achin[es],” “manufac tur [ es],” and “c omp o sition[s ] of m a tter

. ” “In c h oosingsuc h expans ive terms , . . . Congr e s s plai nly contemplated th at the paten t laws would be given wide s c ope,” Diamondv. Chak rab a rty , 447 U. S. 303, 3 08, inorderto en su r e th at “ ‘ i n g en u i tysh ou ld r e c e iv e a liber al encouragement,’ ” id., at 30 8–3 09. Th i s Cou r t’ s pr ec eden ts pr ov ide th r ee spec ific ex c e ption s to §101’ s br oa d pr in c i ples: “la w s of n a tu r e , physical phenomena, an d ab s t ra ct ideas

. ” Id., at 30 9. Wh ile n o t r e quired by the statutory text, these excepti o ns a r e co ns istent with the notion that a patentab le pr oc ess must b e “ n e wa n du s e f u l

. ” An d , i n a n y ca s e , the exceptions have define d th e st atu t e’ s r e ac has a mat t er of statutory stare de cisi sgoin gbac k 15 0 y e ar s. Se e Le Royv. Tatham , 14 How. 156, 17 4. Th e § 101 eligibili tyin q u ir yis on lya thr e shold test

. Ev en if a c l aimed invention qualifie s i none of the four ca t e gorie s , itm u sta l s o s a ti sfy “the c o nditions and requirements of th is t i tle,” § 101( a), in c l u d in gn o v e lty, see §102, n o n o b v iou s n e ss, see §103, an d a fu ll an d par t ic u l ardesc r i ption , see §112. Th e inv e n t ion at is su e is c l ai med to be a “p r o c e ss,” wh ich §100(b) defin e s as a “pr o c ess, art or me thod, and incl udes a new use of a known process, ma

c h in e, man u f ac tu r e , c o mpositionof matter , ormater i al.” Pp. 4–5. (b) The machine-or-transformation te st i s n o t th e sole t e st forpat

en t eligibil ity u n d er§101. Th e Cou r t’ s pr ec eden ts establish th at al

th ou ghth at test maybe a u s efu lan d imp o r t an t c l u eor inv e stig ativ e tool, it i s not the sole test fo r de ciding w h ether a ninve ntion is apat

en t-eligible “p r o c e ss” u n d er §101. In h o ldin g to th e c o n t r a r y , th e Federa l Circuitviolat ed t w o princi ples of statutory interpretation: Cour ts “ ‘ s hould not r e ad in to the pa tent l a ws lim it ation s and c o ndi

tions whic h the legi slatur e has not expressed,’ ” Diamondv. Die h r , 450 U. S. 1 75, 182, and, “[u]nless otherwise defined, ‘words will be in

t e rpret e d a s t a king t h eir ordina ry, cont em pora ry, co m m o n m e a n ing,’ ” ibid. The Court is una wa re of a n y ordina ry , c o ntempora ry, c o mmon mea n ingof “pr o c e ss” thatwould r e quir e it t obe t i ed to a machine or the transforma ti on of an articl e. Respondent Patent Di

r e c t orur g e s the Cour t to r e ad §1 01’ s o t herthr ee patentable c a teg o ries a s confining “ p roces s ” t oam a chine or transformati on. Howe ver, t h e doct rine o f noscitur a sociis is in applic able h e r e , for§100(b) al

ready explicitly defines “pro cess,” see Burges sv. Uni t ed States , 553 U. S. 124, 13 0, an d n o th ingabou t th e sec t ion ’ s in c l u s ionof th ose ot her ca t e gori es s u gges t s t h a ta “ p roce ss” must be tied to one of them.3 Cite as: 56 1 U

. S. ____ (2010) Sy llabu s Fina lly, t h e F e dera l Circuit incorre ct ly concluded that this Court has endorsed the machine-or-transformat ion test as the exclusive test. Rec e nt author ities show tha tthe te st was never intend ed to be ex

haustive or exclusive. See, e.g., Park erv. Flook , 4 3 7 U. S. 584, 58 8, n . 9. Pp. 5–8.

(c) S e ct ion 1 0 1 sim i la rly precludes area d ing of t h e t e r m“ p roces s ” that would c a teg o r i c a llyex c l ude business me thods. The ter m “meth od” with in§100(b)’ s “ p r o c e ss” defin i tion , at lea s tas a tex t u a l mat t erand be for eotherc o nsultingother Patent Ac t li mita tions and this Cour t’ s pr ec edents, mayinc l ude at least so me met h ods of doing b u s i nes s . The Court is una wa re of any arg u ment that the “or d inar y , cont em pora ry, com m o n m e aning,” Di ehr , supra , at 182, of “meth od” ex c l u d es bu sin e ss meth ods. Noris it c l earw h at a bu sin e ss meth o d exception would sweep in and whethe r it would excl ude technologies for co nduct i n gab u s i nes s more effici ent l y. Theca t e gori ca l exclus ion a r gument is further unde r mined b ythe fa ct tha tfedera l la w explic

itly contemplates the existence of at least s o me business method pat

en ts: Un der§273(b)(1), if a paten t -h olderc l aims in fr in g e men tbased on “a method i n[a] pa tent,” t h e alleg e d infr ing e rc a n asse r ta defens e of prior us e. By allowing this defe nse, the statute it self acknowledges that ther e ma ybe business method pa ten t s . S e ction 273 thus cla r i

fies th e u n d erstan din gth at a bu sin e ss me thod is simply one kind of “method” thatis, a tle as t insome c i r c u ms tanc es, eligibl eforpatent

ing unde r§1 0 1

. A contra ry con c lus i on would viola t e the ca non a g a i ns t interpreting a n ys t atutory provis i o n in ama nne r tha twould render anothe r provision superfluous. See Corleyv. U n ited Stat es , 556 U. S. ___, ___. Finally, while § 273 ap pears to leave open the pos

sibi lityof som ebu sin e ss me th od paten t s, it does n o t su g g e st br oad paten t ab ili tyof su c h c l aimedinv e n t ion s . Pp. 10–1 1.

(d) Ev en thoughpetitioner s’ applic a t ion is not c a teg o r i c a llyoutsid e of §101 u n d erth e two atex tu al appr oac h es th e Cou r t rejec t s tod a y , th at does n o t meanit is a “ p r o c e ss” u n d er§101. Petition er s seek to patent both t h e c o nc ept of hedging r i sk an d th e appli c ationof th at concept to energy markets. Under Benson , Flook , an d Dieh r , how

ev er , these are not patentab le pr oc esses but at tempt s to patent ab

str a c tide a s. Clai ms 1 an d 4 ex plainth e bas icc o n c ept of h e dgin gand r e du c eth at c o n c ept to am a th ema t ic al fo r m u l a. Th is i s anu n p at

entable abstract idea, just li kethe algorithms at issue i n Bensonan d Flook

. Petitio n er s’ r e mainingc l aims , broad examples of how hed ging c a n be used in c o mmodities and energy mar k ets, at te mpt to pa tent the use of the abstr ac t hedgingidea , the ninstructtheuse of well

known ra ndo ma n a l ys is tec hniq u es to help es tab l is h s o me of the in

puts into the e q uation. Theyadd even less to the underlying abstract principle than the invention held patent i n eligible in Flook. Pp. 12–4 BILSKI v. KAPPOS Sy llabu s 15.

(e) Because petitioners’ patent a pplica t ion ca n b erej e cted under the Court’s precedents on the unpaten tabili ty of ab str a ct idea s, the Cour t need not define fur t herwhat c o nstitute s a p a t e ntable “pr o c ess,” bey o nd pointingto the definition of that ter mpr ov ided in §100(b) an d l ookin gto th e g u ideposts in Benson , Flook , and Dieh r . Nothing in to day’s opinion should b eread a s endors ing t h e Federa l Cir c u it’ s past i n ter p r e tation s of §101. See, e.g. , Stat e St re et , 49 F. 3d, at 13 73. Th e appeal s c o u r t mayh av ethough t it neededto make th e machine-or-transformation test excl usive precisely because its case la w ha d not adeq ua tely identified less extreme means of restricting bu sin e ss me th od paten t s. Indisa pproving an exclusivemachine-or

tr ansfor matio ntest, this C o ur t by n omean s desir e s to pr ec lu de th e Federa l Circuit ’s developm entof ot her lim i t i ng crit e riat h atfurt her the Patent Ac t’ s pur p oses and ar e not i n c o nsistent with its tex t

. P. 16. K ENNEDY , J., delivered the opinion of the Court, except for Parts II

– B–2 an d II–C –2. R OBERTS , C. J., and T HOMAS an d ALITO , JJ., join ed th e opinion in full, and S CALIA , J ., j o ined ex ce ptfor Pa rt s II– B–2 a n d II– C– 2. S TEVENS , J., filed a nopi n ion co ncu rri ng inthe j u dg ment, in whi c h G IN SB U R G , B REYER , and S OTOMAYOR , JJ., joined. B REYER , J., filed an opinion conc u rring i nthe j u dgment, in which S CALIA , J., joined as to Part II._________________

_________________ 1 Cite as: 56 1 U

. S. ____ (2010) Opinion of theCourt
NOTIC E : Th is op i n ionis subjec t to f o rma lrevi si onbef o r e publicat ioninth e p r eli m in ary p rin t of th e U n it edS t at es R e p o rts

. R e ad ers ar e r e qu es ted to n o tif yth e R e p o rt e rof D e c i s i on s , Su p r em e C o u rt of th e U n ited St at es , Wa s h

ington, D. C. 2054 3, of any typ o gra p hical or other f o rmal err o rs , in or der th atc o rr ect i on sm a y b e mad eb e f o r e th ep r e lim in aryp rin t go es t o p r es s . 

# SUPREME CO URT O FTHE UNI TED STATES

No. 08–9 64 

### BER NAR D L. BILSKI AND 

### RAN D A. WARSAW , PETITIONERS v. DA VID J. KA P P OS, UN D ER SEC RETARY OF COMMERC E FOR IN TE LLECT UAL PROPER TY AND DIR ECT OR,

PATEN TAN D TRAD EMAR K O F FIC E ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEAL S FOR THE FEDERAL CIRC UI T [Ju n e28, 2010 ] 

### J USTICE 

### K ENNEDY 

### delivered the opinion of the Court, except as to Parts II–B–2 and II–C–2.* The question in this ca se turns on whether a patent ca n be issued for a claimed invention designed for the busines s world. Th e patent a p plication claims a procedure fo r instructing buyers and sellers how to protect against the risk of pric e fluctuations in a discrete section of the econ

omy. Three arguments are advanced for the propositio n that the claimed invention is outside the scope of patent law: (1) it is not tied t o a machin e and does not transform an article; (2) it involve s a method of conducti ng business; and (3) it is merely an abstract idea. The Cou rt of Appeals ruled that the first m e ntioned of these, the so-called ma

chine-or-tra nsformation test, wa s the sole test to be used for determining the patentabilit y of a “process” under the Patent Act, 35 U. S. C. §101.

——————

* J US TI CE S CALIA does not join Parts II–B–2 and II–C–2.2 BILSKI v. KAPPOS Opinion of theCourt 

### I Petitioners’ application s eek s patent protection for a claimed invention that explains h o w buyers and sellers of commoditie s in the en ergy mark e tcan prote ct, or hedge, against the risk of price changes. The keyclaims are claims 1 and 4. Clai m 1 descri bes a series of steps in

structingh o w to hedg e risk. Cl aim 4 puts the concept articulated in claim 1 into a simple mathematical formula. Claim 1 consists of the following steps: “(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a riskposition of said consum ers; “(b) identifying mar k et participa nts for said com

modity havi n g a counte r -risk position to said consum

ers; and “(c) initiating a series of transacti ons between said commodity provider an d said mar k et participa nts at a second fixed rate su chthat saidseries of market par ticipant tra nsactions balances the risk position of said series of consumer transactions.” App. 19–20. The remaining claims explain how claims 1 and 4 can be applied to allow energy suppliers and consumers to mini

mize the risks resulting from flu ctuations in market d e mand for energy. For example, claim 2 claims “[t]he method of claim 1 wherein said commodity is energy an d said market participa nts are tra nsmission distributors.” Id., at 20. Some of these claim s also suggest familiar statistical approaches to determi n e the inp u ts to use in claim 4’s e quation. For example, claim 7 a dvises using well-knownrandom an alysis techniques to determine how much a sell er will gain “from each transactio nunder each3 Cite as: 56 1 U

. S. ____ (2010) Opinion of theCourt 

### historical weather pattern.” Id., at 21. The patent examiner rejected petitioners’ application, explaining that it “ ‘is not implemented on a specific appa

ratus and merely manipulates [an] abstra ct idea an d solves apurely mathematical problem without any limi t a tion to a p r actical appl ication, therefore, the invention is not directed to the technological arts.’ ” Ap p. to Pet. for Cert. 148a. The Board of Patent Appeals and Interfer

ences affirmed, concluding that the application involved only mental steps that do not transform physical matter and was dir e cted to an abstract ide a . Id., at 18 1a–186a. The United States Court of Appeals f o r the Federal Circuit hea r d the case en banc and affirmed. The case produced five different opinio ns. Students of patent law would be well advised to study the s e scholarly opinions. Chief Judge Michelwrote the opi n ion of the court. The court reject ed its prior testfor determining whether a claimed invention was a patentable “process” under §101—whether it produces a “ ‘useful, concrete, and tangi

ble result’ ”—as articulated in State Stre et B a nk & Tru s t Co. v. Sign ature Financial Grou p, Inc. , 149F. 3d 1368, 1373 (1998), and AT &T C o rp . v. Excel Communication s, Inc., 172 F. 3d 1352, 1357 (1999). See In re Bilski, 5 45 F. 3d 943, 959–960, a n d n. 19 (CA Fed. 2008) (en banc). The court held that “[a] claimed process is surely patent

eligible und er §101 if: ( 1 ) it is tied to a particu lar machine or apparatu s, or (2) it tr ansforms a particular a rticle into a different state or thing.” Id., at 954. The court concluded this “machine-or-transformation test” is “the sole test governing §101 analyses,” id. , at 955, and thus the “tes t for determining patent eligibil ity of a process under §101,” id., at 956. Applying the machine-or-transformation test, the courth e ld that pet i tioner s’ application was not pate nt eligible. Id. , at 963–966. Judge Dyk wrote a separate concurring opinion, providing historical support for th e4 BILSKI v. KAPPOS Opinion of theCourt 

### court’s app r oach. Id., a t966–976. Three judges wrote dissenting opinions. Ju dge Maye r argued tha tpetitioners’ app lication was “not eligible f o r patent prot ection because it is directed to a method of conducting business.” Id., at 998. He urged the adoption of a “techn o logical sta n dard for patentability.” Id. , at 1010. Judge Rader would have f o und petitioners’ claims were an un patentable abstract idea. Id., at 1011. Only Judge Newman disagreed with the court’s conclusion that petitioners’ application was outsi d e of thereach of §10 1

. She did no t say that the applica t ion should have been granted but only that the issue should be remanded fo r further pro c eedings to determine whether the application qualified as patentable under other provisions. Id., at 997. This Court granted certiorari. 556 U. S. ___ (2 009). II A Section 101 defines th e subject matter th at may be patented under the Patent Act: “Whoever invents or discovers any new an d useful process, machine, ma nufacture, or composi t ion of matter, or any new and useful i m provement thereof, may obtain a patent th erefor, subject to the co nditions and requirements of this title.” Section 101 thus specifies fourindependent categories of inventions or discoveries thatare eligible f o r protectio n : processes, machines, manufactures, and compositions of matter. “Inchoosing such expansive terms . . . modified by the comprehensive ‘an y ,’ Congres s plainly c o ntemplated that the pa tent laws would be given wide scope.” Di a mondv. Chakrabar t y , 447 U. S. 303, 308 (19 80). Congress took this permissive a p proach to patent eligib ility to en

sure that “ ‘ingenuity s h ould receive a liberal encourage

ment.’ ” Id., at 308–3 09 (quoting 5 Writings of Thoma s5 Cite as: 56 1 U

. S. ____ (2010) Opinion of theCourt 

### Jefferson 7 5–76 (H. Washington ed. 1871)). The Court’s precedents provid e three specific exceptions to §101’s broad patent-eligibility principles: “laws of na

ture, physi c al phenomena, and abstract ide a s.” Chakr a barty , sup r a , at 309. While thes e exceptions are not re

quired by the statutory text, they are consistent with th e notion that a patentable process m u st be “new and useful. ” And, in any case, these exceptions have defined the reach of the statute as a matter of statu t ory s t ar e d ecisi sgoing back 150 years. See Le Royv. Tat h am , 14 How. 156, 174– 175 (1853). The concepts covered by these exceptions a r e “part of the storehouseof k n owledge of allme n . . . free t o all men an d reserved exclusively to none.” F unk Brothers Seed Co. v. Kalo Inoculant Co. , 333 U. S. 127, 130 (1948). The §101 p a tent-eligibility inquiry is only athreshold test. Even if an invention qualifies as a process, machine, manufacture, or composition of matter, in order to receive the PatentAct’s prot ection the claimed invention must also satisfy “the conditions and requirements of this title.” §101. Thos e requirem e nts includ e that the invention b e novel, see §102, nonob vious, see §103, and fully and par

ticularly de scribed, see §112. The present case involves an invention that is claimed to be a “pro cess” under §101. Section 100(b) defines “proc

ess” as: “process, art or metho d , and incl udes a new use of a known process, machin e, manufacture, composition of matter, or material.” The Court first considers two proposed categorical limita

tions on “process” patents under §101 that would, if adopted, ba r petitioner s’ applicati o n in the p r esent case: the machine-or-transformation test and the categorica l exclusion of business m e thod patents.6 BILSKI v. KAPPOS Opinion of theCourt 

### B 1 Under the Court of Ap peals’ formulation, an invention is a “process” only if: “(1) it is tied to a particularmachine or apparatus, or (2) it tra nsforms a particular article into a different state or thin g.” 545 F. 3d, at 954. This Cou r t has “more than once cautioned t hat courts ‘sho uld not read into the patent laws limitations a n d conditions which the legislature has not expressed.’ ” Diamondv. Diehr , 450 U. S. 175, 1 82 (1981) (q uoting Cha k rabar t y , supra , at 30 8; some internal quotation marks om itted). In p a tent law, a s in all statutory construction, “[u]nless otherwise defined, ‘words willbe interpreted as taking their ordinary, co n temporary, common meaning.’ ” Diehr , supra , at 1 82 (quoting Pe rrinv. United States , 4 44 U. S. 37, 42 (1979)). The Court has read th e §101 term “manufacture” in accor

dance with dictionary definitions, see Chakrabarty, supr a , at 308 (citi n g Ame r ica nFrui t Gro w ers, Inc. v. Brogdex Co

. , 283 U. S. 1, 11 (1931)), and approved a construction of the term “com p osition of matter” c o nsistent with common usage, see Chakraba rty , supra , at 308 (citing Shell Dev e l

opment Co. v. Wa tson , 149 F. Supp. 279, 280 (D C 1957)). Any sugges t ion in this Court’s cas e law that the Patent Act’s terms deviate fro mtheir ordinary meaning has only been an explanation for the exce ptions for laws of natu r e, physical phenomena, a n d abstract ideas. See Parker v. Flook , 437 U. S. 584, 588–589 (19 78). This C o urt has not indicated that the existence of these well-established exceptions gives the Judiciary c a rte blanch eto impose other limit ations that are incons istent with the text and the statute ’ s purpose and design. Concern s about at

tempts to c a ll any form of human activity a“process” c an be met by making sur e the claim meets the requirements of §101. Adopting th e machine-or-transform ation test as the sole7 Cite as: 56 1 U

. S. ____ (2010) Opinion of theCourt 

### test for wh at constitut e s a “pro cess” (as opposed to just a n important and useful clue) violates these statutory inter

pretation principles. Section 100(b) provides that “[t]h e term ‘proce ss’ means process, art or method, and includes a new use of a kno w n process , machine, manufactu re, compositionof matter, or material.” The Court is unaware of any “ ‘ordinary, co ntemporary , common meaning,’ ” Diehr , sup r a , at 182, of the definitional terms “process, art or method” that would require these terms to be tied to a machine or to transform an article. Respondent urges the Court to look to the other pa tentab le categories in §101— machines, manufactures, and compositions of matter—to confine the meaning of “process” to a machi n e or trans

formation, under the doctrine of noscitur a s o ciis

. Under this canon, “an ambigu ous term m a y be given more precise content by the neighboring words with whichit is associ

ated.” United Sta t esv. Steven s , 559 U. S. ___, ___ (201 0) (slip op., at 12) (internal quotation marks o m itted). This canon is inapplicable here, for §100(b) already explicitly defines the term “p rocess.” See Bur ges sv. Unit e dSt at es , 553 U. S. 124, 130 (20 08) (“Whena statute includes an explicit definition, we must followthat definition” (inter

nal quotation marks omitted)). The Courtof Appeals incorrectly concluded that this Court has e n dorsed the machine-or-transforma t ion test as the exclusive test. It is true that Cochranev. Deen er, 94 U. S. 780, 7 88 (1877), explained th at a “process” is “an act, or a series of acts, performed upon the subject-matter to be transformed and redu ced to a different stat e or thing.” More recentcases, however, have r ejected the broad impli

cations of this dictum; and, in all events, later authority shows that it was no t intended to be an e xhaustive o r exclusive test. Gotts c halkv. Be ns on , 409 U. S. 63, 70 (1972), noted that “[t]ransformation and reduction of a n article ‘to adifferent state or thing’ is the clue to the pat

-Opinion of theCourt 8 BILSKI v. KAPPOS Opinion of K ENNEDY , J. 

### entability of a process claim that does not inc l ude particu

lar machines.” At the same time, it explicitl ydeclined to “hold that no process patent could ever qualify if it did not meet [machine or tran s formation] requirements.” Id., at 71. Flook took a similar approach, “assum[ing] that a valid proce ss patent may issue even if it does not meet [the machine-or-transformation test].” 437 U. S., at 588, n. 9. This Court’s precedents establish that the machine-or

transformation test is a useful and important clue, a n investigativ e tool, for determ ining whether some claim e d inventions are processes under §101. The machine-or

transformat ion test is not th e sole test for deciding whether an invention is a patent-eligible “process.” 2 It is true th at patents f o r inventions that did not satisfy the machine-or-transformation test were rarel ygran ted in earlier eras , especially in the Indu strial Age, as explained by Judge Dyk’s thou ghtful historical review. See 5 4 5 F. 3d, at 966–976 (concurring opinion). But times change. Technology and other innovations progress in unexpected ways. For example, i twas once forcefully argued that until recent times, “well-established princip l es of patent law probably would have prevented the issua n ce of a valid patent on almost any conceivable computer program. ” Diehr , 450 U. S., at 1 95 (S TE VEN S 

### , J., dissenting). Bu t this fact does not mean that unforeseen innovations such as computer programs are always unpatentable. See id., at 192–193 (majority opinion) (h olding a procedure for molding rubber that included a computer program is within pate ntable subject matter). Section 1 01 is a “dy

namic provision d e signed to encompass new and unfor e seen inventions.” J. E. M. Ag Supply, Inc. v. Pioneer HiBred Int’l, Inc. , 534 U. S. 124, 135 (2001). A categorical rule denying patent pr otection for “inventions in areas notOpinion of theCourt 9 Cite as: 56 1 U

. S. ____ (2010) Opinion of K ENNEDY , J. 

### contemplated by Congress . . . would frustrate the pur

poses of the patent law. ” Chakrab a rty , 447 U. S., at 315. The machine-or-transformation te st may well provide a sufficient b a sis for eva l uating processes sim i l a r to those i n the Industrial Age—for example, inventions grounded in a physical or other tangi b le form. But there a r e reasons to doubt whet her the tes tshould be the sole criterion for determining the pate ntability of inventions in the Infor

mation Age. As nume r ous amicusbriefs argue, the ma

chine-or-tra nsformation test would c r eate un certaintya s to the patentability of software, advanced diagnostic medi

cine techniques, and inventions based on lin ear progra m ming, datacompression, and the manipulation of digita l signals. See, e.g., Brief for Business Software Alliance 24– 25; Brief for Biotechnology In dustry Or ga nization et al. 14–27; Brief for Boston Patent Law Associ ation 8–15; Brief for Houston IntellectualProperty La w Association 17–22; Brief for Dolby Labs., Inc., et al. 9–10. In the course of applying the machine-or-transformation test to emerging techn o logies , cou rts may pose question s of such intricacy and r e finement that they ri sk obscurin g the larger object of securing pate nts for valuable inven

tions without transgre ssing the public domain. The dis

sent by Ju dge Rader refers to some of these difficulties. 545 F. 3d, at 1015. As a result, in deciding wh ether previ

ously unforeseen inventions qualify as patentable “proc

ess[es],” it may not make sense to require courts to confine themselves to asking the question s posed by the machine

or-transfor m ation test

. Section 101’s terms suggest tha t new technologies may call for new inquiries. See Benson , supra , at 71 (to “freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology[,] . . . is not our purpose”). It is important to emphasize that the Court today is not commenting on the patentability of any particular inven

-10 BILSKI v. KAPPOS Opinion of theCourt 

### tion, let a l one holdin g that any of the ab ove-mentioned technologie s from the Informatio n Age should or shoul d not receive patent prot ection. This Age puts the possibil

ity of innovation in th e hands of more people and raises new difficul t ies for the patent law. With ever more people tryingto in novate and thus seeking pa tent p r otections for their inventions, the patent law faces a great challenge in striking the balance between prote cting inven t ors and not granting monopoli es o v er proc edures that others would discover by independent, creati v e application of general principles. Nothing in this opinionshould b e r e ad to take a position on where that balance ought to be struck. C 1 Section 101 similarlyprecludes the broad contention that the te rm “p rocess” catego rically exclu d es business methods. The term “method,” which is within §100(b) ’s definition of “process,” at least a s a textualmatteran d before cons ulting other limitation s in the Pa tent Act an d this Court’s precedents , may inclu d e at least some meth

ods of doing business. See, e. g., Webster’s New Intern a tional Dictionary 1548 (2d ed. 1954) (defining “method” a s “[a]n orderly procedure or process .

. . re gular way or manner of doing anything; hence, a set form of procedu r e adopted in investigati o n or instruction”). The Court is unaware of any argum e nt that th e “ ‘ordinary, contempo

rary, comm on meaning ,’ ” Di ehr , su pra , at 182, of “method” excludes business methods. Nor is it clear how far a pro hibition onbusiness method patents would reach, and whether it would exclude tec hnologies for conducting a business m o re efficien tly. See, e.g., Hall, Business an d Financial Method Patents, Innovation, and Policy, 56 Scottish J. Pol. Econ. 4 43, 445 (2009) (“There is no precis e definition of

. . . business method patents”). The argument that business m e thods are categoricallyOpinion of theCourt 11 Cite as: 56 1 U

. S. ____ (2010) Opinion of K ENNEDY , J. 

### outside of §101’s scope is further undermined by the fact that federallaw explici t ly cont emplates the existence of at least some business m e thod patents. Under 35 U. S. C. §273(b)(1), if a patent-h older claims infringement based on “a method in [a] patent,” the alleged infringer can assert a defense of prior use. For purposes of this d e fense a l on e, “method” is defined as “a me thod of doing or conductin g business.” §273(a)(3). In other words, b y allowing th is defense the statute itself ackn owledges that there may be business method patents. Section 273’s definitionof “method,” to be sure, cannot change the meaning of a prior-enacted statute. But what §273 does is clarify th e understanding that a business m e thod is simply one kind of “method” that is, at least in some circumsta nces, eligible for patenting under §101. A conclusion that business methods are not patentable in any circumstances would re nder §273 meaningless. This would violate th e canon ag ainst interpreting any statutory provision ina mannerthat would render an

other provision superfluous. See Corleyv. Unit e dSt at es , 556 U. S. ___, ___ (200 9) (slip op., at 9). This principle, of course, applies to interpretingany two provisions inthe U. S. Code, even when Congress enacted the provisions at different times. See, e.g., Haguev. Committee for Indus

trial Organ ization , 307 U. S. 496, 529–530 (1939) (opinion of Stone, J.). This established ruleof statutory interpreta

tion cannot be overcome by ju dicial speculation as to th e subjective intent of various legislators in enacting the subsequentprovision. Finally, while §273 appears to leave open the possibi l i ty of somebusines s method pat

ents, it do es not suggest broad patentability of such claimed inventions. 2 Interpreting §101 to exclude all business methods sim

ply because business method patents were rarely issuedOpinion of theCourt 12 BILSKI v. KAPPOS Opinion of K ENNEDY , J. 

### until modern times revives many of the previously dis

cussed difficulties. See supra , a t 8–9. At th e same time, some busin ess method patents raise special problems in terms of va gueness and suspect validity. Se e eBay Inc. v. Merc Excha n ge, L. L. C., 547 U. S. 388, 397 (2006) (K ENN E DY 

### , J., concurring). The Information Age empow

ers people with new capacities to perform statistical analyses an d mathematical calculations with a speed and sophistication that enable the design of protocols for more efficient performance of a vast number of business tas k s. If a high enough bar is not set when considering pate nt applications of this s o rt, patent examiners and courts could be fl ooded with claims that would put a chill on creative endeavor and dynamic ch ange. In searching for a limiting princi ple, this Court’s prece dents on the unpatentability of abstract i d eas provi d e useful tools

. See infra , at 12–15. Indeed, if the Court o f Appeals we re to succe ed in defining a narrower ca tegory or class of patent appl ications that claim to instruct ho w business s h ould be conducted, and then rule that the category is unpatenta ble because, for instance, it repre

sents an attempt to pa tent abstra ct ideas, this conclusion might well be in accord with controlling precedent. See ibid. But beyond this or some oth e r limitation consisten t with the st atutorytex t , the Pa tent Act leav es open the possibility that there a r e at le ast some processes that ca n be fairly d e scribed as business methods that are within patentable subject matter under §101. Finally, even if a part icular business method fits into the statuto r y definition of a “process,” that does not mean that the application claimingthat method should be granted. In order to receive patent pro t ection, any claimed invention must be novel, §102, nonobvious, §10 3 , and fully and particul a rly describ e d, §112. These limit a tions serve a critical role in adjusting the tension, ever13 Cite as: 56 1 U

. S. ____ (2010) Opinion of theCourt 

### present in patent law, between stimulating innovation by protecting i nventors and impeding progress by gran tin g patents wh en not justified by the statutory design. III Even thoughpetitioner s’ application is not categorically outside of §101 underthe two b r oad and a t extual ap

proaches the Court rejects toda y, that does n o t mean it is a “process” under §101. Petitioners seek to patent both the concept of hedging risk and the application of that concept to energy markets. App. 19–20. R a ther than adopting ca tegorical rules that might have wide-ranging and unforeseen impac t s, the Court resolves this cas e narrowly on the basis of this Court’s decisions in Benson , Flook , and Diehr , whic h show tha tpetitioners’ claims ar e not patentable proces ses becaus e they are attempts to patent abstract ideas. Indeed, allmembers of the Court agree that the patent application at issue h e re falls ou t

side of §101 because it claims an ab stract idea

. In Benson , the Court considered whether a patent appli

cation for an algorithm to conve rt binary-coded decimal numerals into pure b i nary code was a“process” under §101. 409 U. S., at 64–67. The Court first e x plained th at
“ ‘[a] p r incip l e, in the abstract, is afundamental truth; an original cause; a motive; these cannot be patented, as no one can clai m in e i ther of them an exclusive right.’ ” Id., at 67 (quoting Le Roy , 14 How., at 175). The Court then held the application at issue was not a “process,” bu t an unpa t

entable abstract idea. “It is conceded that one may not patent an idea. But in practi cal effect that would be th e result if the formula for conv erting

. . . numerals to p u re binary numerals were patented in this case.” 409 U. S., at 71. A contrary hol d ing “woul dwholly pre-empt t h e mathematical formula and in practical effect would be a patent on the algorithm itself.” Id., at 72. In Flook , the Court con s idered the next logical step aft e r14BILSKI v. KAPPOS Opinion of theCourt 

### Benson

. The applicant there attempted to patent a proce

dure for m o nitoring t h e conditions during the cataly tic conversion process in the petrochemical and oil-refinin g industries. The application’s only innovationwas relian c e on a mathematical algorithm. 437 U. S., at 585–586. Flookheld the invention was not a patentab le “process.” The Court conceded the invention at issue, unlike the algorithm in Ben s on , had been limited so that it could s t ill be freely u s ed outsidethe petrochemical an d oil-refini ng industries. 437 U. S., at 589–590

. Nevertheless, Flook rejected “[ t] he notion that po st-solution activi ty, no matter how conventional or obvious in itself, can transform an unpatentable principle into a pa tentable process.” Id., at 590. The C o urt concluded that the process atissue there was “unpa t entable under §101, not because it contain[ed] a mathematical algorithm as one component, but because once that a l gorithm [wa]s assumed to be wit h in the pri o r art, the application, considered a s a whole, c o ntain[ed] no patentable invention.” Id., at 59 4. As the Court late r explained, Flookstands for the proposition th at the prohi

bition against patenting abstractideas “cannot be circum

vented by a ttempting to limit the use of the f o rmula to a particular t e chnological enviro nment” or adding “insignifi

cant postsolution activity.” Diehr , 450 U. S., at 191–192. Finally, in Diehr , the Court estab lished a limitation on the principl es articulated in Benso n and Flook

. The appli

cation in Diehr claimed a previously unknown method for “molding ra w, uncu r ed synthetic rubber into cured preci

sion products,” using amathematical formula to complete some of its several step s by way of a computer. 450 U. S., at 177. Die h r explained that whil e an abstract idea, law of nature, or mathematical formula could not b e patented, “an appli ca tionof a law of nature or mathematical for

mula to a known structure or process may we ll be deserv

ing of patent protectio n .” Id., at 187. Diehremphasized15 Cite as: 56 1 U

. S. ____ (2010) Opinion of theCourt 

### the need to consider the invention as a whol e, rather than “dissect[ing] the claim s into old and new el ements and then .

. . ignor[ing] the presence of the old ele m ents in the analysis.” Id., at 188. Finally, the Court co ncluded th at because the claim was not “an attempt to patent a mathematical formula, but ra ther [was] anindustrial process for the moldin g of rubber products,” it fell within §101’s patentable subject matter. Id., at 192– 193. In light of these precedents, it is clear that p e titioners’ application is not apatentable “process.” Cla i ms 1 and 4 in petition ers’ application explain the basic concept of hedging, or protecting against risk: “Hedgin gis a funda

mental economic practice longprevalent in our system of commerce and taught in any int r oductory fi nance class

. ” 545 F. 3d, at 1013 (Rader, J., dissenting); s ee, e.g., D. Chorafas, Introductionto De rivative Financial Instru

ments 75–94 (2008); C. Stickney, R. Weil, K. Schipper, & J. Francis, Financial Accounting: An Introduction to Con

cepts, Methods, and Uses 581–582 (13th ed. 2010); S. Ross, R. Westerfield, & B. Jordan, Fundamentals of C o r porate Finance 743–744 (8th ed. 2008). The concept of hedging, described in claim 1 and r e duced to a mathemati

cal formula in claim 4, is an unpa t entable abstract idea, just like the algorithms at issu e in Bensonand Flook

. Allowing p e titioners to patent ri sk hedgingwould p r e empt use of this approach in all fields, andwould effec

tively grant a monopolyover an abstract idea. Petitioners’ remaining claims are b r oad examples of how hedging ca n be us ed in commodities and energy markets. Flookestab lished thatlimiting a nabstract idea to one field of useor adding tok e n postsolution com p onents did not make the concept patentable. That is exactly wha tthe remaining claims in petitioners’ application do. The s e claims attempt to patent the use of the abstract idea of hedging ris kin the energy mar k e tand then instruct th e16 BILSKI v. KAPPOS Opinion of theCourt 

### use of well-known random analysis techniques to help establish s o me of the inputs into the equation. Indeed, these claims add even less to the underlying abstract principle than the invention in Flookdid, for the Flook invention was at least directe d to the narrower domain of signaling dangers in operating a c a talytic con v erter. * * * Today, the Court once again declines to impose limita

tions on the Patent Act that are inc o nsistent with the Ac t’s text. The patent appl ication here can be rejected unde r our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what consti

tutes a patentable “process,” beyo nd pointing to the defini

tion of that term provided in §10 0 (b) and lo ok ing to the guideposts in Benson , Flook , and Diehr

. And nothing in today’s opinio n should be read as endors

ing interpretations of §101 that the Court of Appeals for the Federal Circuit has used inth e past. S ee, e.g., State Str eet , 149 F. 3d, at 1373; AT&T Corp. , 172 F. 3d, at 1357. It may be that the Court of Appeals thought it needed t o make the machine-or-transformat ion test exclusive pre

cisely because its case law had not adequately identified less extreme means of restri ctingbusiness method pat

ents, including (but not limited to) application of our opinions in Benson, Flo o k , and Die h r . In disa pproving a n exclusive machine-or-transformation test, we b yno means foreclose the Federal C i rcuit’s development of other lim it

ing criteria that furth er the purposes of the Patent Act and are not inconsistent with its te xt. The judgment of the Court of Appe als is affirm ed. It is so orde red._________________

_________________ 1 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

# SUPREME CO URT O FTHE UNI TED STATES

No. 08–9 64 

### BER NAR D L. BILSKI AND 

### RAN D A. WARSAW , PETITIONERS v. DA VID J. KA P P OS, UN D ER SEC RETARY OF COMMERC E FOR IN TE LLECT UAL PROPER TY AND DIR ECT OR,

PATEN TAN D TRAD EMAR K O F FIC E ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEAL S FOR THE FEDERAL CIRC UI T [Ju n e28, 2010 ] 

### J USTICE 

### S TEVEN S 

### , with w h om J USTICE 

### G INSBURG 

### , J USTICE 

### B RE YE R 

### , and J USTICE 

### S OTOMAYOR

### join, concur

ring in the judgment. In the area of patents, it is especially importan tthat the law remain stable and clear. The only question presented in this case is whether the so-calledmachine-or

transformat ion test is the exclusive test for what consti

tutes a patentable “process” under 35 U. S. C. §101. It would be possible to answer t hat question simply by hol d

ing, as the entire Court agrees, that although the m a chine-or-tra nsformation test is rel i able in most cases, it is not the exclusivetest. I agree with the Court that, in light of the uncertain t y that curren t ly pervade s this field, it is prudent to provid e further gui d ance. But I would take a different approach. Rather tha nmaking any broad s t atements about how to define the term “proce ss” in §101 or tinkering with th e bounds of the category of unpatentable, abstract ideas, I would restore patent law to its historical and constitu

tional moorings. For centuri e s, it was considered well established that a series of st eps for conducting bus iness was not, in itsel f ,2 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### patentable. In the la te 1990’s, the Federal Circuit an d others called this proposition into question. Congress quickly responded to a Federal Circuit dec i sion with a stopgap me asure designed to limit a potentially significant new problem for the b u siness community. It passed the First Inven t ors Defense Act of 19 99 (1999 Act), 113 Sta t

. 1501A–555 (codified at 35 U. S. C. §273), which provides a limited defense to claims of patent infringement, see §273(b), for “method[s] of do ing o rconductin gbusiness,” §273(a)(3). Following several more years of confusion, the Federal Circuit changed cour se, overruling recent deci

sions and holding that a series of steps may constitute a patentable process only if it is tied to a machine or trans

forms an article into a different state or thing. This “ma

chine-or-tra nsformation test” ex cl uded gener a l methods of doing business as well as, potenti a lly, a vari ety of othe r subjects that could be called proces ses. The Courtcorrectl yholds that the m a chine-or

transformat ion test is not the so le t e st for whatconstitutes a patentable process; rather, it is a critical cl ue. 1 

### But th e C o u r ti s q u i t e w r o n g , i nm yvi e w , t o s u g g e s tt h a ta n y series of st eps that is not itself a nabstract idea or law of nature may constitute a “process” within the meaning of §101. The language in the Court’s opinion to this effect can only cause misch i ef. The wiser course would have been to hold that peti tioners’ method is not a “process” because it describes only a general method of engaging in business transactions—and business methods are n o t patentable. Moreprecisely, alth ough a process is no t patent-ineligible simply because it is useful for conductin g business, a claim that merely describes a method of doin g

——————

1 Even if the m a chine-or-transformat ion te s tmaynot defi ne the sc ope of a paten t ab l epr oc ess, it wou l d be a gr av e mist ake t oassu me th a t a n ything witha“ ‘useful, concrete andtangible result,’ ” State Street Bank& Trustv. Signat ure Financial G ro u p, Inc. , 149 F

. 3d 136 8, 13 7 3 (CA Fed. 1998 ), maybe paten t ed.3 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### business does not qualify as a “pro cess” under §101. I Although the Court provides a b r ief statement of facts, ante , at 1–4 , a more complete explication may be us eful f o r those unfa m iliar with petitioners ’patent application and this case’s procedural history. Petitioners’ patent a p p lication describes a series of steps for managing risk amo n gst buyers and sellers of commodi

ties. The general method, descri bed in Claim 1, entails “managing the consum ption risk costs of a commodity sold by a comm odity pro vider at a fixed price,” a n d consists of the followin gsteps: “(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based u p on historical averages, said fixed rate corresponding to a ri sk position of said consumers; “(b) identifying mar k et participa nts for said com

modity havi n g a counte r -risk position to said consum

ers; and “(c) initiating a series of transacti ons between said commodity provider an d said mar k et participa nts at a second fixed rate su chthat saidseries of market par ticipant tra nsactions balances the risk position of said series of consumer transactions.” App. 19–20. Although the patent application makes clear that the “method can be used f o r any commodity to manage con

sumption risk in a fixed bill price product,” id., at 11, it includes specific applications of the method, particularl y in the fi eld of energy, a s a mean s o f enabling s u ppliers an d consumers to minimize the risks resulting f r om fluctua

tions in demand during specified time periods. See id. , at 20–22. En ergy suppliers and consumers m a y use th at4 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### method to hedge their risks by agreeing u p on a fixed series of payments at regular intervals thr o ughout the year instead of chargi ng or pa yin gpri c es tha tfluctuate i n response t o changing weather conditions. The patent application describes a series of steps, including the evaluation of historical costs and weather variables an d the use of economic and statistical formulas, to analyze these data and to esti mate the likelihood of certain ou t

comes. See id. , at 12–19. The patent examiner rejected petitioners’ application on the groundthat it “is not direct ed to the t e chnological arts,” insofar as it “is not implemented on a specific app a ratus and merely manipulates [an] abstra ct idea an d solves apurely mathematical problem without any limi t a tion to a practical appl ication.” App. to Pet. for Cert. 148a. The Board of Patent Appeals and Interferences (Board) affirmed the examiner’s decisi on, but it rejected the posi

tion that a patentable process must relate to “technologi

cal arts” or be performed on a machine. Id. , a t180a–181a. Instead, the Board de nied petitioners’ patent on two alte r native, although similar, grounds : first, thatthe patent involves only mental steps that do not transform physical subject matter, id. , at 181a–184a; and, second, that it i s directed to an “abstrac tidea,” id. , at 184a–187a. Petitioners appealed to the United States Co urt of Ap

peals for the Federal Circuit. Afte r briefing and argume nt before a three-judge panel, the court sua spon tedecided to hear the ca se en banc and ordered the par t ies to addres s: (1) whether petitioners’ “claim 1 .

. . claims pa tent-eligible subject matter under 3 5 U. S. C. §101”; (2) “[w]hat stan

dard should govern in determining whether a process is patent-eligible subject matter”; (3) “[w]hetherthe claimed subject mat t er is not p a tent-e ligible because it constitute s an abstract idea or mental process”; (4) “[w]hether a method or process must result in a physicaltransform a tion of an article or be tied to a machine t o be patent

-5 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### eligible subj ect matter”; and (5) whether th e court’s deci

sions in Sta t e S t re et B a nk & Trus t Co. v. Sign ature Finan

cial Group, Inc., 149 F

. 3d 1368 (1998) (State Str eet) , and AT&T Corp. v. Exc e lCommunications, In c., 172 F. 3d 1352 (1999) , should b eoverruled in any respect. App. to Pet. for Cert. 144a–145a. The en ba nc Court o f Appeals affirmed the Board’s decision. Eleven of thetwelve judges agreed that petition

ers’ claims do not describe a patentable “process,” §101. Chief Judge Michel’s op inion, join e dby eight other judges, rejected sev e ral possible tests fo r what is a patent-eligible process, including whether the patent produce s a “ ‘useful, concrete an d tangible r e sult,’ ” whe t her the p r ocess relates to “technological arts, ” and “categorical exclusions” for certain pro c esses such as busines s methods. In re Bilsk i, 545 F. 3d 9 43, 959–96 0 (2008). Relying on several of ou r cases in wh ich we expl ained how to differentiate a claim on a “fundamental principle” from a claim on a “process,” the court c o ncluded that a “claim e d process is surely pat

ent-eligible under §101 if: (1) it is tied to a particul a r machine or apparatus, or (2) it t r ansforms a particula r article into a differentstate or th ing.” Id. , at 954–95 5. The courtfurther concluded that this “machine-or

transformat ion test” is “the soletest go verning §10 1 analyses,” id. , at 955 (emphasis added), and therefore the “test for de termining patent eligibility of a process under §101,” id. , at 956. Applying that test, the court held th at petitioners’ claim is not a patent -eligible pr ocess. Id. , at 963–966. In a separ a te opinionreaching the same c o nclusion, Judge Dyk carefully reviewed the history of American patent law and Englis h precedents upon whi c h our law is based, andfound tha t“the unpatentability of process e s not involving manufactures, mach ines, or compositions of matter has been firmly embedded .

. . since the time of the Patent Act of 1793.” Id. , at 96 6. Judge Dyk observed,6 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### moreover, that “[t]here is no suggestion in any of this earl y consideration of process patent s that processes for organiz

ing human activity were or ever had been patentable.” Id. , at 972. Three judge s wrote dissenting opinions, althou gh two of those judges agreed that petitioners’ claim is not patent eligible. J u dge Mayer would have held that petitioners ’ claim “is not eligible for patent protection because it is directed to a method of conductingbusiness.” Id. , at 998. He submitted that “[t]he patent system is intended to protect and promote a dvances in science and technology, not ideas about how to stru ctu re commercial transac

tions.” Ibi d

. “Affording patent protection to business methods lacks constitut i onal and st atutory sup p ort, serves to hinder rather than promote innovation[,] and usurps that which rightfully belongs in th e public domain.” Ibid

. Judge Rader would h ave reje cted petitioners’ claim on the ground that it seeks to patent merely an abstract idea

. Id. , at 1011. Only Jud ge Newmand i sagreed wi th the cour t’s conclu

sion that petitioners’ claim seek s a patent on inel igibl e subject matter. Judge Newman urged that the en ban c court’s ma chine-or-tra nsformation test ignores the text and history of §101, id. , at 977–97 8, 985–990, is in tension with severa l of decisions by this Court, id. , at 978–985, and the Fe deral Circu it, id. , at 990–992, and will inval i

date thousands of pate nts that we re issued in reliance on those decisi ons, id. , at 992–994. II Before explaining in m o re detail how I would decide this case, I will comment briefly on the Court’s opinion. The opinion is less than pellucid in more than one respect, and, if misunder stood, couldresult inconfusion or upset settled areas of the law. Three prelimin ary observations may be clarifying.7 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### First, the Court sugg ests that t h e terms in the Paten t Act mustb eread as lay speakers use those terms, and not as they have traditionally been understood in the context of patent la w. See, e.g. , ante , at 6 (terms in §101 must b e viewed in li ght of their “ ‘ordinar y, contemporary, commo n meaning’ ”); ante , a t1 0 (patentab l e “method” is any “or

derly procedure or process,” “regular way or manner of doing anything,” or “set form of procedure adopted in investigation or instruction” (internal quot a tion marks omitted)). As I will explain at more length in Part III, infra , if th is portion of the Cou rt’s opinionwere take n literally, the results would be abs urd: Anything that con

stitutes a s e ries of steps would be patentable so long as it is novel, n o nobvious, a n d described with specificity. But the opinioncannot be taken literally on this point. The Court make s this clear when it accepts that the “atextual” machine-or-transformat ion test, ante , at 12, is “useful and important,” ante , at 8, even though it “violates” the stated “statutor yinterpretati on principles,” ante , a t 6; and when the Court excludes pro c esses that tend to pr e-empt com

monly used ideas, see ante , at 14–1 5. Second, in the proce ss of addressing the sole issu e presented to us, the opinion u s es som e la nguage that seems inconsistent with our cent uries-old reliance on th e machine-or-transformat ion criteria as clues to patentabil

ity. Most notably, the opinion f o r a plurality suggests that these criteria may operate differently when address

ing technologies of a recent vintage. See ante , a t8– 9 (machine-or-transforma t ion test is useful “for evaluating processes similar to th ose in the Industrial Age,” but is less useful “for determi n ing the patentability of inventions in the Infor m ation Age”). In mom e nts of caution, however, the opinion for the Court ex plains—correctl y—that the Court is merely restoring the law to its historical state of rest. See ante , at 8 (“This Court’s precedents establish that the m a chine-or-transformation test is a useful and8 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### important clue, an investigative tool, fordeterminin g whether so me claimed inventions are pro c esses under §101 ”). Notwithstanding this internal tension, I under

stand the Court’s opinion to hold only that the machine-or

transformat ion test remains an important t e st for pat

entability. Few, if a n y, processes cannot effectively be evaluated using these criteria. Third, in its discussion of an issu e not contained in the questions presented—whether t h e particul a r series of steps in petitioners’ application is an abstra ct idea—th e Court uses language that could suggest a shift in our approach to that issue. Although I happen to agree tha t petitioners seek to pat e nt an abst r act idea, the Court does not show how this conclu sion follows “clear[ly],” ante , at 15, from ou r case law. The patent now before us is not f o r “[a] princip l e, in the abstract,” ora “fundam ental truth. ” Parker v. Flook , 437U. S. 584, 58 9 (1978) (in t ernal quota

tion marks omitted). Nor does itclaim the sort of phe

nomenon of nature or abstract ide athat was embodied b y the mathematical formula at iss u e in Gotts chalkv. Ben

son , 409 U. S. 63, 67 (1972), and in Flook. The Court construes petitioner s’ claims onprocesses f o r pricing as claims on “the basic concept of hedging, or protecting against risk,” an te , at 14, and thus discounts the application’s discussion of what sorts of data to use, and how to analyze th ose data, a s mere “to ken postsolu

tion components,” ante , at 15. I nother words, the Cou r t artificially limits petitioners’ claims to hedging, and then concludes that hedging is an abstract idea rather than a term that describes a categor y of processes including petitioners’ claims. Why the Court does th is is never made clear. One might think th at the Cou rt’s analysi s means that any process that utilizes an ab stract idea is itself an un patentable, abstract idea. But we have neve r suggested any such rule, which would undermine a h o st of patentable processes. It is true, as the Co urt observe s ,9 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### that petitioners’ applicatio n is phr a sed broadly. See ante , at 14–15. But claim specification is covered by §112, not §101; and if a series of steps constituted an u n patentable idea merely because it was described without sufficient specificity, the Court could be calli ng into question some of our own prior decisions. 2

### At points , the opin ion suggests that novelty is the clue. See ante , at 14. Butthe fact th at hedging is “ ‘long pre v alent in ou r system of commerce,’ ” ibid. , cannot justify the Court’s co nclusion, as “the proper constructio nof §101

. . . does n o t involve the familia r issu[e] of novelty” th at arises u n der §102. Flook , 4 37 U. S., at 588. At other points, the opinion for a plurality suggests th at the anal ysis turns o nthe ca tegory of pa tent involved. See, e.g. , ant e, at 12 (courts should use the abstract-ide arule as a “too[l]” to set “a high enough bar” “when considering pat e nt applications of this sort”). But we have never in the past suggested that the inquiry varies by subject matte r. The Court, in sum, never provides a satisfying accoun t of what co nstitutes an unpatentable abstract idea. In

deed, the Court does not even explain if i tis using th e machine-or-transformat ion criteria. The Court essentially asserts its conclusion that petitio n ers’ application claims an abstractidea. This mode of analysis (or lack thereof) may have l e d to the c o rrect outc ome in this case, but i t also means that the Court’s musings on this issue stan d for very littl e.

——————

2 For exa m ple, arule t h a tb r oa dly-phra s e d cla i m s ca nnotcons t i t u te patentab le pro c esses could call into questi on our approval of Alexande r Gr ah am Bell’ s famou s fif t hc l aim on“ ‘ [t] he method of, and app a r a tu s for, tra n s m itting voca l orother s o unds telegra p hica lly, a s herein desc r ibed, byc a u s in gelec tr ic al u n d ulat ions, simi lar in form to the v ibr ation s of th e airac c o mpan y i n gthe said vocal or other sounds , subst a ntia lly as set forth,’ ” The T e leph one Case s , 126 U. S. 1, 53 1 (188 8).10 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### III I agree with the Court that the text of §101 must be the starting point of our an alysis. As I shall explain, however, the text mu st not be the end point as well. Pursuant to its power “[t]o prom ote the Progress of .

. . useful Arts, by securing for limited Times to .

. . Inventors the exclusive Right to their .

. . D i scoveries,” U. S. Const

. , Art. I, §8, cl. 8, Congress has pa ssed a series of paten t laws that gr ant cer t ain exclusive rights ove rcertain i n ventions an d discoveries as a mea n s of encou r aging inno

vation. In the latestiteration, the Patent Act of 195 2 (1952 Act), Congress has provided that “[w]ho ever invents or discovers any new and useful process, machine, manu

facture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, sub

ject to the conditions and requirements of this title,” 35 U. S. C. §10 1 , which in clude that the patent also be novel, §102, and n o nobvious, §103. The statute thu s authorizes four catego ries of subject matter that mayb e patented: processes, machines, manufactures, and compositions of matter. Se ction 101 imposes a threshold condition. “[N]o patent is av ailable f o r a discovery, however useful, n o vel, and nonobvious, unless it falls with in one of the express categories of patentabl e subject m a tter.” Ke wane e Oil Co. v. Bic ron Corp. , 416 U. S. 470, 483 (1974). Section 101 undoubtedly defines in “expansive term s ” the subject matter eligible for patent prote ction, as the statute was meant to ensure that “ ‘ingenuit[i e s] receive a liberal enc o uragement.’ ” Di amondv. Chak rabar t y , 447 U. S. 303, 308–309 (1 980); see a l so J. E. M. Ag Supply , Inc. v. Pioneer Hi-B r e d Int’l, In c. , 534 U. S. 124, 130 (2001). Nonetheless, n o t every new invention or discovery may be patented. Certain things are “free for all to use.” Bonito Boa t s, Inc. v. Thunder Craft Boats, Inc. , 489 U. S.11 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### 141, 151 (1989). 3 

### The text of the Patent Act does not on its face give muc h guidance about what constitutes a patentable proces s. The statute defines the term “p roc e ss” as a “process, art or method [that] includes a new use of a known process, machine, manufacture, composition of matter, or mate

rial.” §100(b). But, th is defi nition is not especially help

ful, given t hat it also uses the term “process” and is there

fore somew hat circular

. As lay spe a k e rs use th e wo rd “process,” it constitute s any series of steps. But it has al ways been clear that, as used in §101, the term does not refer to a “ ‘pr o cess’ in the ordinary se nse of the word,” Flook , 437 U. S. , at 588; se e also Corning v. Bu rde n , 15 How. 252, 268 (1854) (“[T]he term process is often us ed in a more vague sense, in which it cannot be the subject of a patent”). Ra ther, as discussed in some det a il in Part IV, infra , t h e term “pr o cess” (along with the de finitions given to thatterm) has long accum u lated a distinctive meaning in pat e nt law. When the term was used in the 1952 Patent Act, it was neither intended nor understood to encompass anyseries of steps or any way to do any thing

. With that understanding in mind, the Government has

——————

3 The Court quo t es our decisio nin Diamondv. Chak rab a rt y , 447 U. S

. 303 ( 198 0), forth e pr opositionth at, “ ‘[ i]n choosing such expansive ter m s . . . modified byth e c o mpr e hens iv e “any ,” Congr e ss plainl y contemplatedthat the patent la w s would be given wide scope.’ ” Ante , at 4. Bu t the Cour t fails to mention whic h ter m s w ew e r edisc u ssin gi n Chak rab a rty:the ter m s “m anufac tur e ” and “c omposi ti on of mat t er .” See 4 47 U. S., at 30 8 (“Inc h oosin gsu c h ex pan s iv e ter m s a s ‘ m an u f ac tur e ’ and‘ c om position of ma tter , ’ mo dified by thecomprehensive ‘any,’ Congres s pla i nly co ntemplated tha t the pa tent la ws would b egive n wide s c ope” ). As dis c us s e d herein, Congr e s s ’ choice of t h e t e rm“proc

ess” r e flec ted a bac kgr o u n du n d er stan di ng of what sorts of series of steps could be patented, an d likely reflected an intenti o nal design to codify tha ts e ttled, j u dicia lunders t a n ding. This ma y not have b een the c a se with the ter m s at is sue in Chak rab a rty
.12 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### argued that because “aword” in a statute “is given more precise content by the neighboring words wi th which it” associates, United S t a t esv. Williams , 553 U. S. 285, 294 (2008), we may dra wi n ferences from the fact that “[t]h e other three statutory categories of patent-eligible subject matter identified in Section 101—‘machine, manufacture, or composition of matter’—all ‘are things made by man, and involve technology.’ ” Brief for Respondent 26. Spe

cifically, th e Governm e nt submits, we ma y in fer “thatth e term ‘proce ss’ is limited to tech nological and industri al methods.” Ibid. The Court rejec t s this submission cate

gorically, on the ground that“§100(b) already explicitly defines the term ‘p roc e ss.’ ” Ante , at 6. Bu t §100(b) de

fines the term “proces s ” by using the term “process,” as well as several other general terms. This is not a case, then, in which we must either “follow” a definition, ante , at 7, or rely on neighboring words to understand the scope of an ambiguous term. The definition itself contains the very ambiguous term that we must define. In my view, the answer lies in between the Govern

ment’s and the Court’s positi ons: The terms adjacent to “process” i n§101 provide a clue as to its meaning, al

though not a very stro ng clue. Section 101’s l i st of catego

ries of patentable subj ect matte r is phrased in the disjunc

tive, suggesting thatthe term “process” has content distinct fro mthe other items in the list. It wo uld therefore be illogical to “rob” the word “process” of all independent meaning. Reiter v. Sonotone Corp. , 442 U. S. 330, 338 (1979). Moreover, to the exte nt we can dra winferences about what is a “process” from common attributes in §101, it is a dangerous ende avor to do so on the b a sis of a pe r ceived overarching the m e. Given the many moving parts at work in the Patent Act, there i s a risk of merely con

firming our preconceived notions of what should be pat

entable or of seeing common attributes that trac k“th e familiar is sues of novelty and obviousness ” that aris e13 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### under other sections of the stat ute but are not relevant to §101, Flook , 437 U. S., at 588. Th e placemen t of “proces s ” next to other items thus cannot prove that the term is limited to any parti cular catego rie s ; it does, h o wever, give reason to be skeptical that the sco p e of a patentable “proc

ess” extends to cover any series of steps at all. The Court makes a more seriou s interpretive error. As briefly discussed in Part II, supra , the Co urt at poin ts appears to reject the well-settled proposition that the ter m “process” in§101 is not a “ ‘proces s ’ in the ordinary sense of the word,” Flook , 437 U. S., at 588. Instead, the Cou r t posits that the word “ p rocess” must be understood in light of its “ordin ary, contem porary, common meaning,” an te , at 6 (internal quotation marks omit ted). Altho u gh this is a fine approach to statut ory interpre tation in general, it is a deeply flawed approach to a sta t ute that relies on complex terms of art developed against a particular historical background. 4

### Indeed, the approa ch would render §101 almost comical. A pro c ess for tra ining a dog , a series of dance steps, a method of shooting a bas ketball, maybe even words, stories, or song s if framed as the steps o f typing letters or uttering sounds—all would be patent

eligible. I am confident that the term “proce ss” in §101 is not nearly so capacious. 5

——————

4 For e x ample, if this Court were tointer p r e t the Sher man Ac t ac c o r d

ingto the Ac t’s plain tex t , itc o uld pr ohibit “the entir ebody of private cont ra ct ,” Nat i onal Soc. of P rofes sional En gine ersv. Uni t ed Stat es , 435 U. S. 679, 688 (197 8).

5 The Cour t attempt s to av oid suc habsu r d r e su lts bys t atin gth a t these “[c ] onc e rns” “c an be m e t bym a kingsur ethat the c l aim mee t s t h e r e qu ir emen ts of §101.” Ante , at 6. Because the only limitation on the plainme an in gof “pr o c e ss” t h at th e Co urt acknowledges ex plicitly is the b a ro nab s t r a c ti d e a s , l a w s o f n a t u r e , and t h e like, it is presumably thi s limit ation tha tis left to s t a n d be tweenal l c o n c eiv able h u m anac tiv i t y and patent m o nopolies. B u t manypr ocesses th at w o u l d make for absu r d paten t s ar e n o t abs tr ac t ideas. Norc a nth e requ ir emen ts of novelty, no nob v ious nes s , and pa rticula rdescription pi ck up the slack.14BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### So is the Court, perhaps. What is particular l y incredi

ble about the Court’s stated method of interpreting §1 01 (other than that the m e thod itself may be patent-eligible under the Court’s the o ry of §101) is that the Court devi

ates from its own professed commitment to “ordinar y, contemporary, common meaning.” As noted earlier, the Court ac cepts a role for the “atextual” machine-or

transformation “clue.” Ante , a t1 2 , 7. The Court als o accepts tha twe ha ve “ f oreclose[d] a purely li teral readin g of §101,” Flook , 437U. S., at 589, by holding that claims that are close to “laws of nature, natural phenomena, an d abstract id eas,” Diam ondv. Die h r , 450 U. S. 175, 185 (1981), do not count as “processes” under §101, evenif they can be colloqu ially described as such. 6 

### The Court attempts t o justify this latte r exception to §101 as “a matter of statutory s t are deci sis .” Ante , at 5. But itis strange to think that the verysa me term m u st be inter

preted literally on som e occasi ons, and in light of its his

torical usage on others. In fact, the Court’s understanding of §101 is even more remarkable because i t s willingness to excludegeneral principles from the provision’s rea c h is in ten s ion with it s apparent willingness to include steps for conducting bus i

ness. The history of patent la w contains strong norms against pat e nting these two cate gories of subject matter. Both norm s were pre s umably incorporated by Congress into the Patent Act in 1 952.

—————— Cf. ante , at 12–1 3 (plu r a lit yopin ion)

. A gr eat deal of h u m anac tiv i ty wa s a ts o me time novel a n d nonob v ious

.

6 Curiously, the Court conce d es that“thes eexceptions a r e not re

quir ed bythe sta t utor ytex t ,” but ur g e s that “theyar e consist e ntwith the notion tha ta patentab le pr oc ess mu st be ‘ n ewan d u s efu l

. ’ ” Ant e , a t5 (emphas i s a dded). I do not s ee how th es e exception s find atextual home in the t e r m“new anduseful.” The exceptions may b econs istent with those wor d s, but they ar e some ti mes inc o nsistent with the “or d i

na ry, co nt em pora ry, com m o n m e a n ing,” ante, at 6, 10 (i n t er n a l qu ota

tion mar k s om itted), of the wor d s “pr o c e ss” and “method.”15 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### IV Because the text of §101 does noton its face convey th e scope of patentable processes, it is necessary, in my view, to review the history of our patent law in some detail

. This approa ch yields a much more straightforward answe r to this cas e than the Court’s. As I read the history, it strongly su pports the conclusion that a met h od of doing business is not a “process” under §101. I am, of course, mindful of the fa ct that §10 1 “is a dy

namic provision d e signed to encompass new and unfor e seen invent ions,” and that one m u st therefore view his

torical conc eptions of patent-eligible subject matter ata n appropriate l y high level of generality. J. E. M. Ag Supply, 534 U. S., a t135; see also Chakra barty , 447 U. S., at 31 5– 316. But it is non e theless signif icant that while people have long innovated in fields of bu siness, meth ods of doin g business fall outside of the subject matter th at has “his

torically been eligible to receive the prote ction of our patent laws ,” Di ehr , 45 0 U. S., at 184, and likely go beyon d what the modern patent “statu te was enacted to protect , ” Flook , 437 U. S., at 593. It is als o significan t that when Congress enacted the latest Pate nt Ac t, itd i d so against the background of a well-settl ed understan ding that a series of steps for conductingbusiness cannot be patented. These cons iderations ought to guide our analysis. As Justice Holmes notedlong ag o, sometim e s , “a page of history is worth a volu me of logic.” N e w York Tru s t Co. v. Eisne r , 256 U. S. 345, 349 (1921). English Backdrop The Constitution’s Patent Clause was written against the “backd rop” of English patent practices, Graham v. John DeereCo. of Kansas Ci ty , 383 U. S. 1, 5 (1966), and early American patent law was “largely based on and incorporated” features of th e English patent system, E. Walterscheid, To Promote th e Progress of Useful Arts:16 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### American Patent La w and Administration, 1789–18 36, p. 109 (1998) (hereina fter Walt erscheid, To Promote the Progress). 7 

### The governing English law, the Statute of Monopolies, responded to abuses whereby the Crown would issue letters patent, “granti n g monopolies to court favorites in goods or businesses which had long before been enjoye d by the public.” Grah am , 383 U. S., at 5. Th e statute generally prohibited the Crown from granting such exclusive rights, 21 Ja m. 1, c. 3, § 1 (1623), in 4 Statutes of the Realm 1213 (reprint 1963), but it contained exceptions that, inter alia , permit ted gran ts of exclusive rights to t h e “working or making of any manner of new M anufacture. ” §6. Pursuant to that provision, patents issued for th e “mode, method, or wa y of manufacturing,” F. Campin, La w of Patents for Inventions 11 (18 69) (emphasis deleted) , and English courts c o nstrued the phrase “wor king or making of any manner of new m anufactures ” to encom

pass manufacturing processes, see, e.g. , Boul tonv. Bull , 2 H. Bl. 463, 471, 492, 126 Eng. Rep. 651, 65 5, 666 (C. P. 1795) (holding that th e term “ma nufacture” “applied no t only to things made, but to the practice of making, to principles carried into practice in a new manner, to new results of principles carried into practice”). T hus, English courts uph e ld James Watt’s fam o us patent on a method for reducin gthe consu m ption of fuel in steam engines, 8

### as

——————

7 See Pennockv. Dialog ue , 2 Pet. 1, 1 8(1 829) ( “ [M ]an yof th e pr ov i

sions of our patent act are derived from the principles and practice, which have pr eva iled in the cons tructi on o f that of England”); Proceed

in g s inCon gr e ss Du r i n gth e Ye ar s 178 9 an d 179 0 Rel a ti n gto th e Fir s t Paten tan d C o py r i gh t Laws, 22 J. Pa t. Off. Soc

. 352, 363 (1 94 0) (e x plain i n gth at t h e 1790 Pa ten tAc t was “fr a med ac c o r d in g to th e Cou r se of Pr ac tic ein the English Patent Office”); see also W a lterscheid, The Early Evoluti o n of the Uni t ed Stat es Patent La w: Antecedents , 7 6 J. Pat. & Tr a d e m ar k Off. Soc

. 69 7, 69 8 ( 199 4) (desc r ibin g th e r o le of th e English backdrop).

8 See Hornb low erv. Boul ton, 8 T. R. 95 (K. B. 179 9).17 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### well as avariety of patents issued for methods of synthe

sizing substances or building mechanical devices. 9 

### Although it is difficult to derive a precise understanding of what sorts of methods were patentable un der English law, there is no basi s i nthe text of the Statute of Mon o po lies, nor in pre-1790 English precedent, to infer that bus i

ness methods could qualify. 10

### Th ere was so me debate throughout the relevant time period about wh at processes could be patented. But it does not appear that an yone seriously b e lieved tha tone co uld patent “a method for organizing human activity.” 545 F. 3d, at 970 (Dyk, J. , concurring). 11 

### There were a small number of patents issued between 1623 and 1790 relatin gto banking or lotteries and one f o r a method o f life insur ance, 12

### but these did not constitute

——————

9 See, e.g. , Roebuck and Garb ettv. Willia m Stirling &Son(H. L. 1 7 7 4) , repri n t e d i n1 T. Webs t e r, R e port s and N o t e s of Ca s e s on Lett er s Paten tforInv e n t ion s 45 ( 184 4) (“me th od of makin gac id spir itby burning sulphur and salt pe tre, and collecting the cond ensed fumes”) ; id. , at 77 (“ ‘m ethod of prod ucing a yellow colour for painting in oil or water , makingwhite lead, and separ a ti ngthe mineral alka li fr o m c o mmon sal t , all to be per f o r med in one s i ngle pr oc ess’ ”); see also C. Ma cLeod, Inv e nt ing t h e I n dus t ria l Revo lution: The E n glish Patent Sy stem, 16 60 –18 00, pp. 84–9 3, 100 –1 0 4 , 109– 11 0, 152 –1 55 (19 8 8) (listingpatent s) (h ereinafter MacLeod).

10 Some English c a ses m a de r e fer e nc e to the per m issibil i t yof patents ov er new “tr ades.” But so faras I c a n tell, the ter m“tr ade” r e fer r e d not to the me thods of c o nduc tingbusiness butr a therto met h ods of mak i ng and using physical i t ems or to th e object o f the trade. See, e.g. , Cloth

work ers of Ips w ichCase , 78 En g . Rep. 147, 148 (K. B. 1603) (“[I]f a ma n ha th b r ought in ane w invention a n d anew tra d e within the king dom . . . [the King] may gr ant by c h ar t e runto him”).

11 See also Po ll ack, The Mul t iple Unconstitutionali t y of Business M e thod Patents: CommonSense, Co n gr e ssion al Con s ider ation , an d Con s titu t i on alHistor y , 28 Ru tg er s Compu t er& Tech

. L. J. 61, 94–9 6 (2002) (hereinafter Pollack) (d es crib i ng En glis h pra c t i ce).

12 See id., at 95; B. Woodcroft, Alphabe ti cal Index of Patentees of Inv e n t ion s , from M a r c h2, 161 7 (14 Ja m e s I) to Oc tob e r1, 1852 ( 1 6 Vic t or iae) 38 3, 410 (2d ed. 19 69) (h er ein a fterWoodc r o ft).18BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### the “prevail [ing]” “ p rin c iples and practice” in England o n which our patent law was based, Pennockv. Dialogu e, 2 Pet. 1, 18 (1829). Such patents were exceedingly rare, and some of them probably were vi ewed not as inventions or discoveries but rather as specia l state privileges 13

### that until the mid-1800’s we re recorded alongside inventions in the patent records, s ee MacLeod 1–2 (explaining that various typ e s of patents were listed together). It appears that the only En glish patent of the time that can fairly be described a s a business method patent was one issued in 1778 on a “Plan for assurances on lives of persons from 10 to 80 years of Age.” W oodcroft 324. 14

### And “[ t] here is no indication” that this pa tent “was e v er enforced or its valid

ity tested,” 545 F. 3d, at 974 (Dyk, J., concurring); th e patent may thus have represented little more than the whim—or error—of a single patent clerk. 15 

### In any eve n t, these patents (or patent) were probably not k n own to the Framers of early patent law. In an e r a before com p uterized databases, organized ca se law, an d treatises, 16

### the America ndrafters probably would have

——————

13 See, e. g. , C. Ewen , Lotter i es an d Sweepstake s 70– 71 (193 2) (de

sc r ibingthe “l etter s p a tent” to for mac o lonyin Vir ginia and to o p er at e lotter i es to fund that c o lony).

14 S ee a l s o Ren n , J o hn Kno x ’ s Pla nfor Insuring Lives : A Pa tent of Inv e n t ionin1778, 10 1 J. In st. Ac tu ar ie s 285, 28 6 ( 197 4) (h er ein a fte r Renn) (des crib i ng the pa tent).

15 “The English patent sy stem ” atthatti me “was one of si mple r e gi s tr ation. Ex tensiv e sc r u tiny was not ex pected of the law offic e r s admin

is t e ring it .” Ma cLeod 4 1

. Thus , a s one scholar suggest ed of the pate nt on life insurance, “perhaps the Law Officer wa s in avery good hum o u r that d a y , orper h aps he had for g otte n the wording of thestatute; mos t likely he wa s concer ned only withthe promised ‘very considerable Cons umption of [Revenue] S t a m ps ’ wh ich [the pa tent holder] decla r ed, would ‘ c ontr ibute to the incre ase of the Public Revenues.’ ” Ren n285.

16 See Mark m a nv. We st view In s t ru me n t s , In c . , 517 U. S. 370, 3 8 1 (199 6) (“[T]he sta t e of patentlaw in the c o mmon-law c o ur ts befor e180 0 led one historian to observe that ‘thereported cases are desti t ute of any decis i on of im port a n ce’ ” (quotingHulme, On the Consider ation of the19 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### known about particul a r patents only if they were well publicized or subject to reported litigation. So far as I am aware, no published cases pertained to patents on busi

ness methods. Also noteworthy is what was not patented under the English system. Du ring the 17 th and 18 th centuries, Great Brita i n saw innovations in business or ganization, 17 

### business m o dels, 18

### management techniques, 19

### and novel solutions t o the challenges of o p erating global firms in which subordinate managers could be reached only by a long sea voyage. 20

### Few if any of these methods of conduct

ing busines s were patented. 21

—————— Patent Grant , PastandP r esent, 13 L. Q. Rev. 313, 31 8 ( 189 7))); M a c L eod 1, 6 1–6 2 (ex p la in in gth e dear thof c l earc a se law); see al s o Boultonv. Bull, 2 H. Bl. 46 3 , 491, 12 6 En g . Rep. 651, 6 65 ( C . P. 1 795 ) (Eyre, C. J

. ) (“ Pa t e ntright s a r e no wher e t h a tI ca n f i nd a ccu ra t e ly disc u ssed inou rbooks”).

17 See, e.g. , A. DuBois, The En glish Busines s Comp anyAft e r the Bub

ble Ac t, 1720 –18 00, pp. 38–4 0, 435 –43 8 (193 8); Har r i s, Th e Bubble Ac t: Its Pass a g e an d its Effec t s onBu siness O r g a n i zati on , 54 J. Ec on. Hist. 61 0, 624–62 5 (19 94).

18 See Pollac k 9 7–1 00. Fore x ample, those who held patents on oil la m p s developed firm s t h a tcont ra ct edto provide street lighting. See M. Falkus, Li ghting in theDark Ag es o f English Eco n omic History: Town Streets before the Industrial Revolu tions, in Trade, Gove rnment, an d Ec on omy inPr e-In du s t r i al En gl an d 249, 255 –25 7, 259– 26 0 (D. Coleman& A. Joh neds. 1976).

19 See, e. g. , G. H a mmersley, The State an d the English Iro nIndustry in the Sixteenth and Seve nteenth Centuri e s , in id., at 166, 17 3, 175 – 178 (de s c r ibin gth e adv e n tof man a g e me n ttec h n i qu es foreffic i en tly run n ing am a j o r iron works )

. 20 See, e. g. , Carl os & Nicholas , Agency Prob lems in EarlyChartered Companie s: The Case of theHudson ’ s Bay Compan y , 50 J. Ec on. Hist. 853, 85 3– 87 5 (199 0).

21 Nor, s ofa r a s I ca n t e ll, were b u s i nes s met h od pa t e nts com m o n in the United States in the brief pe riod between independence and the creation of our Constitution—despite th e f a c tthat it wa s a time of gr eat bu sin e ss in n o v a tion , in c l u din gn e wpr ocesses foren g a gi n ginr i sky tr ade an d tr an spor t, on e of which has be en called “the quintessentia l bu sin e ss in n o v a tionof th e 178 0s.” T. Do erflinger, A Vi gorous Spirit of20 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### Early Ame r i can Pa ten t Law At the Constitutional Convention, the Founders decide d to give Congress a pa t e nt power s o that itmi ght “promot e the Progres s of .

. . useful Arts.” Art. I, §8, cl. 8. There is little known history of that Clause

. 22 

### We d o k n owt h a tt h e Clause passed without objection or debate. 23 

### This is strik

ing because other pro p osed powers, such as a power to grantchar ters of incorporation, generateddiscussion about the fear that they might breed “monopoli e s.” 24 

### Indeed, at the ratifica tion conventions, some States rec ommended amendments that would have prohibited Con

gress from granting“ ‘exclusive advanta g es of com merce.’ ” 25

### I f the original understanding of the Patent

—————— Ent e rpris e : M e rcha n t s a n d Econom icDe velopment in Revolutionary Ph iladelph i a 291 (1 986) (d esc r ibin gn e w meth ods of c o n d u c tin gand fina ncing t r a d e with China)

.

22 See Seidel, The Consti tutionand aStanda rd of Patent ab ility, 4 8J. Pat. Off. Soc

. 5, 10 (19 66) (h er ein a fter Seidel); Walterscheid, To P r o mote the Pr o gr e ss of Sc ienc e and UsefulArts: The Background and Origin o f the I n tellectual Property Cl ause of the UnitedState s Consti

tution, 2 J. I n tell. Pr op. L

. 1, 2 6(1994) (hereinafter Wal t erscheid, Background a n d Origin); W a ltersc heid, To Promote the Progress 59, an d n

. 12; Pr ag er , A Histo r yof In tellec t u a l Pr oper tyFr om 15 45 t o 178 7, 26 J. Pa t. Off. Soc. 711, 746 (194 4).

23 Walterscheid, Background and Origin 2 6 ; 2 Records of t h e Federa l Conv en tionof 178 7, pp. 509– 510 (M . Far r a n ded. 1966).

24 J. M a dison , Notes of D e ba tes in the Federal Convention of 1787, pp. 638– 63 9 (Oh i o Un iv . Press ed. 196 6).

25 See Walter sc h e id, Bac k gr oun dan d Or i gin 38, n

. 124, 55– 56 (c ollec t

in gsou r c e s); s ee also Th e Objec t ion s o f H o n . G e o r g eM a s o n , O n eo f t h e Delegates fro mVirginia, i nthe La te C o ntinental Co nv ention, to the Proposed Fed e ral Constitu tion, As si gned a s Hi s R e a s ons For Not S i gning t h e S a m e , 2 A m erica nMus e um or Repository of Ancient and M o der nFugi tiv ePiec es, etc

. 534, 53 6 (1 78 7 ) (r epr i n t196 5 ) ; Ratif i c a tion of the New Co nstitution byt h e Conv ention of the State o f New York, 4 id., at 153, 156 (17 89); Re mar k s onth e Amen dmen ts to th e Federal Constitution Proposed by The Co nv en tion s of M a ssa c h u s etts, New Hampshire, N e w York, Virginia, So uth and North Ca r o lina , with th e Minorities of Penns ylva niaa n d Ma ryla nd b ythe Rev. Nichola s Collin,21 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### Clause included the authority to patent met h ods of doing business, it might not have passed so quietly. In 1790, Congress passed the first Patent Act, an “Act to promote the progress of usefulArts” that a u thorized p a t

ents for pe rsons who had “invented or discovered any useful art, manufacture, engine, machine, or device, or any improvement therein not b e f o re k n own or used,” if “the invention or discovery [was] sufficiently useful and important.” 1 Stat. 109–110. Three years lat e r, Congress passed the Patent Act of 1793 a n d slightly modified the language to cover “any new and useful a rt, machine, manufacture or composition of m a tter, or a n y new an d useful improvement onany art, m a chine, manufacture or compositionof matter.” 1 Stat. 319. The object of the constitutional patent power and th e statutory a u thorization for proce ss patents in the early patent Acts was the term “useful art.” It is not evident from the face of the statutes or the Constitution whethe r the objects of the patent system were “arts” that are also useful, or rather a mor e specific ca tegory, the class of art s known as “useful arts.” Cf. Graham , 383 U. S., at 12 (describing the “ ‘new and useful’ t e sts which have always existed in the statutory scheme” and apply to all catego

ries of subj ect matter). Ho wever, we have generally as

sumed that“useful art, ” at least as it is used in the Paten t Act, is itself a term of art. See Burden , 15 How., at 267– 268. The word “ a rt” and th e phrase “useful arts” are subject to many meanings. There is room on the margins to de

bate exactly what qu alifies as either. There is room, moreover, to debate at what level of generali ty we should understand these broad and histo r ical terms, given that “[a] rule th at unantici p ated inven t ions are wi thout prote c tion would conflict with the core concept of the patent

—————— D. D ., 6 id

. , at 303, 30 3.22 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### law,” Ch akr a barty , 447 U. S., at 31 6. It appears, however, that regar d less of how one construes the term “useful arts,” business method s are not in cluded. Noah Webster’s first A m erican dictionary 26

### defined th e term “a rt” as the “dis position or modification of thin gsby human skill, to answerthe purpose intended, ” and differ

entiated between “useful or mechanic” arts , on the one hand, and “liberal or polite” arts, on the other. 1 An American Dictionary of the English Language (1828) (facsimile edition) (emphasis added). Al though other dictionaries defined th e wo rd “art” more bro a dly, 27

### Web

ster’s definition lik ely conveyed a message similar to the meaning of the word “manufactures” in the earlier English statute. And we know that the term “useful arts” wa s used in the founding era to refer to manufacturing an d similar app lied trades. 28

### SeeCoul ter, The Fi eld of the

——————

26 Some sc h o lar s su g g e st th atWebste r’s “close proximity to the Con

s t itutiona l Convention coup led with his famil i ar itywit hthe deleg a tes makes it likel y that he played some indirect role in the d e velopment” of the Constituti on’ s Intellec t ual Pr op er tyClau se—a Cl au se th at es tab

lished not onlythe power to c r e ate patents but al s oc o pyr i gh ts, a subjec t in whic h Websterhad gr eat in t e res t

. Donne r, Co pyrightCla u s e of the U. S. Constitut i on: Why Did the Framers Include It Wi th Un an imou s Appr ov al? 36 Am. J. Leg a l. Hist. 3 61, 3 7 2 (19 92). Bu t there is no direct evidence o f this fact. See Walter scheid, Backgroun d an d Or igin 40–41.

27 See, e. g . , 1 S. Joh n s on , Dic t ion a r yof th e En glishLan gu a g e(1773) (r epr i n t1978) (listin gas de fin i tion s of an“ar t”:“[t]h ep o werof doing s o mething not ta ught b yna ture a n d i n stin c t , ” “[a] sc ien c e; as, t h e liberal arts ,” “[a] tr ade,” “[a] r t fulness; sk ill; dexterity,” “[c]un ning ,” a n d “[s]pec u lation” )

. One migh t question the breadth of these definitions. This sa me dic t ionary offere d as anexample of “doing something not ta ught b yna ture a n d ins t in ct,” the a r t of “dance”; and as an example of a “tr ade,” the ar t of “makingsug a r . ” Ibid.

28 For examples of this usage, see Bookof Trades or Librar y of Useful Ar ts ( 180 7) (d esc r ibin gina th r ee-v o lu me wor k68 tr ade s , eac hof wh ic h is th e mean s of c r e atin ga pr odu c t, su chas feath e rwor k erorc o rk cutter); 1 J. Bigelow, The Us eful Arts Considered in Connexion with th e Applica t ions of S c ience (1 8 4 0 ) (s urveying ahis t ory of wha twe would23 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### Statutory Useful Arts, 34 J. Pat. Off. Soc. 487, 493–50 0 (1952); see also Thomas, The Patenting of the Liberal Professions, 40 Boston College L. Rev. 1139, 1164 (1999) (“[The Framers of theConstitution] undoub t edly contem

plated the i n dustrial, mechanical and manu al arts of the late eighteenth Centur y, in co ntra st to the seven ‘liberal arts’ and th e four ‘fine arts’ of classical learning”). Indeed, just days before the Constitu tional Convention, one del e gate listed examples of American progress in “manufac

tures and the useful arts,” all of which invol v ed the cre a tion or transformation of physical substances. See T. Coxe, An Address to a nAssembly of the Friends of Ameri

can Manufactures 17–18 (1787) (listing, inter alia , meal, ships, liquors, potash, gunpowder, paper, sta rch, ar ticles of iron, stone work, carriages, and harnesses )

. Numerous scholars have suggeste dthatthe term “usef u l arts” wa s widely understood to encompass the fields that we would now describe as relat i ng to technology or “technological arts.” 29

—————— today call mechanics, techno logy, and e n gi neering)

. See also D. Defoe, A General Hi story of Discoveries an d Improvements, in Useful Arts (172 7); T. Cox e , AnAddr ess to anA sse mbl yof the Friends of American M a n u f ac tu r e s17 –1 8 (1 78 7 ) ; G. Log a n , A Let t erto t h e Citizen s o f Pennsylvania, on the Nece ssity of Promoting Agriculture, Manufac

tu r e s, an d th e Usefu lAr ts 12 –13 (2d ed. 18 00); W. Kenr ick, AnAddr ess to th e Ar tis t s an d M a n u f ac tu r e r s of Great Br it ain2 1–3 8 (17 74); c f

. Corning v. Burden , 15 How. 25 2, 2 6 7 (18 54) (l ist i n gth e “ar t s of tan

ning, dyein g , ma king wa ter-proof cloth, vu lca n izing Indi arub b e r, [a n d] smelting ores”).

29 See, e. g . , 1 D. Ch isu m , Paten t s G1–23 (2 010); Lu tz, Paten t s an d Science: A Clarification of the PatentClau se of the U. S. Constitution, 18 Geo. Wash . L. Rev

. 50, 54 (19 49– 19 50) ; Samu elson , BensonRev i s ited: The Case Against P a tent Prot ec tion forAlg o r i thms and Othe r Compu t er -Rel ated Inv e n t ion s , 39 Emor yL. J. 1025, 103 3 , n . 24 (1990); Seidel 10, 13; see also Great Atlanti c& Pa cific T e a Co. v. Superm ark e t Equipment Corp. , 340 U. S. 14 7, 1 54 ( 1 9 50) (Dou gl as, J., c o n c ur r i ng) (explaining that in the Fram ers’ vie w, an “inv ention, to justifya pa tent, had to serve the ends of sci e nce—to push back the fron tiers of chemi s -24BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### Thus, field s such as business a n d finance were not generally considered part of the “useful arts” in the found

ing Era. See, e.g. , The Federalist No. 8, p. 69 (C. Rossiter ed. 1961) (A. Hamilton) (distinguishing between “the arts of industry, and the science of finance”); 30 The Writings of George Washington 1745–1799, p. 186 (J. Fitzpatrick ed. 1939) (writing in aletter that “our commerce has been considerably curtailed,” but “the useful arts have been almost imp e rceptible pushed to a considerable degree of perfection”)

. Indeed, the same delegate to the Constitu

tional Convention who gave an address in which he listed triumphs in the useful arts distinguished between those arts and th e conduct of business. He explained that inves

tors were now attracted to the “manufactures and the useful arts, ” much as they had long invested in “com

merce, navigation, stocks, ban ks, and insurance compa

nies.” T. Coxe, A Statement of the Arts and Manufactures of the United Sta t es of America fo r the Year 1810, (1814), in 2 American State Pa pers, Finance 666, 688 (1832). Some scholars have remarked, as did Thomas Jefferson, that early patent statutes ne ither included nor reflected any serious debate about the precise scope of patentable

—————— tr y , phy s ic s, and the like; to make a dis t inctive contribution to scientific knowledge”); Inre W a l d ba um , 457 F. 2d 997, 100 3 (CCPA 197 2) (Ric h , J ., con c ur ring) (“ ‘The phra s e“technologica l a r ts ,” as we h ave us ed it, is sy nony mous with the phr a se “useful ar t s ” a s i tap pea r s inAr tic l e I , Section 8 of the Constituti on’ ”); Paulikv. Rizkalla , 7 60 F. 2d12 70 , 127 6 (C A Fed. 19 85) (ex p l a i n in gth at “u se fu l ar ts” is “ t h epr oc ess tod a y called technological innovat i on”); Th omas, ThePost-Industrial Pate nt Sy stem, 1 0Fo r dh a m In tell. Pr op. M e dia & En t. L. J. 3, 32–5 5 (1 999) (ca t a l oguing ea rly unders t a n dings of technologica l a r ts ). This view maybe su ppor t ed, forex ample, byan1814 gr an t to Harv ar d Un iv er sity to create a “P rofessorship o nthe Application of Science to the U s eful Ar ts,” somethi n gthat todaymigh t be akin to applied science o re n gi

neering. See M. James, Engineer i n g a nE nvironm entfor C h a n ge: Bigelow, Peirce, and Early Nineteenth -Cen tu r yPr ac tic a l Edu c ationat Harvard, in Science at Harvard University: Histor ica lPers pect ives 5 9 (C. Elliott & M. Rossiter eds. 1992).25 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### subject ma tter. See, e.g. , Graham , 383 U. S., at 9–1 0 (discussing Thomas Jef f erson’s obs e rvations). It has b e en suggested, however, that “[p]erh a ps this was in part a function of an understanding—shared widely among legislators, courts, patent office officials, and inventors— about what patents were meantto protect. Everyon e knew that manufactures and mac h ines were at the core of the patent system.” Merges, Prop erty Righ ts for Business Concepts a n d Patent System Reform, 14 Be rkeley Tec h

. L. J. 577, 5 85 (1999) (h ereinafter Merges). Thus, although certain p r ocesses, such as those related to t h e technology of the time, might have been cons idered patentable, it is possible th at “[a]gainst this background, it would ha ve been seen a s absurd for an entrepreneur to file a patent” on methods of conducting business

. Ibid. Deve lopmen t of Americ a n Paten tLa w During the first years of the patent system, no patents were issued on methods of doing business. 30

### Indeed, for some time, there were serious doubts as to “th e patentabil

ity of processes per se, ” as distinct from the physical end product or the tools u s e dto perform a process. Id., at 58 1– 582. 31 

### Thomas Jef f erson was the “ ‘firstadministrator of our patent system’ ” and “the author of the 1793 Patent Act. ” Graham , 3 83 U. S., at 7. We have said that his “conclu

sions as to conditions of patentability .

. . are worthy of note.” Ibid

. at 7. During his time administering the sys

tem, Jefferson “saw cle a rly the diff iculty” of de ciding wha t

——————

30 See Waltersc heid, To Promote th e Pr ogr e ss 173 –1 78; P o llac k10 7– 108.

31 These doubts ended by the time of Cochranev. De en er , 9 4U

. S

. 78 0 (187 7), inwh ic hwe h e ld that “ apr oc ess maybe p a ten t able ir r e spec ti v e of the particular form of the instru mentali t ies used,” and therefore one maypatent “a n ac t, orser i esof ac ts, per f ormed upon the subjec t mat t e r to be tr ansfor med and r e duc e d to a differ e nt state orthing

. ” Id

. , at 78 8.26 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### should be patentable. 32 

### Id. , at 9. He drafted th e 1793 Act, id. , at 7, an d, years later, explained that in that Act “ ‘the whole was t u rned over to the judi ciary, to be matured in to a system, under which every one might k n ow when his actions were safe and lawful,’ ” id. , at 10 (quoting Letter to Issac McPherson, inVIWritings of Thomas Je fferson 181

– 182 (H. Washington ed. 1861)). As the Court has ex

plained, “Congress agreed wi th Jefferson

. . . that th e courts should develop additio nal conditions for patentabil

ity.” Grah am, 383 U. S., at 10. Thus “[a ] lthough th e Patent Act was amended, revised or codified some 50 times between 1790 a n d 1950, Congress steered clear” of adding statutory requirements of patentability. Ibid

. For nearly 160 years, Congress retain ed the term “useful arts,” see, e.g. , Act of July 4, 1836, ch. 3 57, 5 Stat. 117, leaving “wide latit u de for jud i cial constr uction .

. . to keep pa ce with industrial development, ” Berman, Method Claims, 17 J. Pat. Off. Soc. 713, 714 (1935) (hereinafter Berman). Although c o urts occasiona lly struggled with defining what was apatentable “art” durin gthose 160 years, they consistently rejected patents on methods of doing busi

ness. The rationales for those decisions sometimes varied. But there was an ove r archingth eme, at least in dicta: Business methods a r e not patentable arts. See, e.g. , United Sta t es Cr edit S y s. Co. v. American Cr edit Indem. Co., 53 F. 818, 819 (CC NY 18 93) (“metho dof insuri ng against los s by bad debts” could not be patented “as an art”); HotelSecu rity Ch ecking Co. v. Lorrain eCo. , 160 F. 467, 469 ( CA2 1908) (“A system of transacting business disconnected from the means for c a rrying outthe system is not, within the most liberal int e rpretation of the term ,

——————

32 A s k ept i c of pa t e nt s , J e ffers on des crib e d t h is a s “ d rawing aline between thing s whic h ar e wor t h to the public the embarrassment of a patent, and th ose whic h ar e not.” 13 Writi n gs of Thomas Jefferson 335 (Memorial ed. 1904).27 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### an art”); Gut h riev. C u rlett , 10 F. 2d 725, 726 (CA2 192 6) (method of abbreviati ng rail tariff schedules, “if it b e novel, is not the kindof art p r otec ted by the patent acts ”) ; In re Pa tton , 127 F. 2d 324, 327–328 (CCPA 19 42) (holding that novel “ ‘intersta t e and nation a l fire-fighting system’ ” was not patentable bec ause, inter alia , “a system of trans

acting busi n ess, apart from the means for carrying ou t such system is not” an art wit h in the meaning of the patent law, “nor is an abstract idea or theory, regardless of its importa nce or . . . ingenuity”); Loew’s Dr ive-In Th ea tre s , Inc. v. Park-In Theatres, Inc. , 174 F. 2d 5 47, 552 (CA1 1949) (“[A] system for the transa ction of business, suc h , for example, as the cafeteri a system for transacting th e restaurant business .

. . however n o vel, useful, or commer cially successful is notpatentable apart from the means for makingthe system practical l y useful, or carr ying it out”); Joseph E. Seag ram & Sons, Inc. v. Marzall , 18 0 F. 2d 26, 28 (CADC 1950) (method of focus- group testi n g for beverages is not patentable subject matter); see als o In re Howa rd , 394 F. 2d 869, 87 2 (CCPA 1 968) (Kirk

patrick, J., concurring) (explaining that a “method of doin g business” c annot be p a tented). Between 1790 and 195 2, this Court never addressed the patentability of business methods. But we co nsistently focused the inquiry on whether an “art” was connected to a machine or physic al transformation, 33

### an inquiry that would ha ve excluded methods of doing business. By the earl y 20th century, it was widely understood that a series of steps for conducting business could not be patented. A leading tr eatise, for example, listed “ ‘sys tems ’ of busin ess ” as an “un p atentable subjec[t].” 1 A. Deller,

——————

33 See, e. g. , Expanded Metal Co. v. Bra d ford , 214 U. S. 366, 38 3, 385 – 386 ( 1 9 09); The Tele pho n e Cases , 126 U. S., at 5 33– 53 7; Cochrane , 94 U. S., at 787– 788; Burden , 15 How., at 267–268.28BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### Walker on Patents §18, p. 62 (1937). 34

### Citing many of the cases listed above, the treatise concluded that a “method of transacting business” is not an “ ‘a rt.’ ” Id. , §22, at 69; see also L. Am dur, Pa tent Law and Practice §39, p. 53 (193 5) (listing “Methods of doing busines s” as an “Unpatentable [A]r[t]”); Berman 718 (“[C]a ses have been fairly unan i

mous in denying patentability to such methods”); Tew, Method of Doing Business, 16J. Pat. Off. Soc. 607 (193 4) (“It is probably settled by long practice and many prece

dents that ‘methods of doing business,’ as thes e words are generally understood, are unpaten table”). Indeed, “[u]ntil recently” it was still “considered well established tha t [business] methods were non-statutory.” 1 R. Moy, Walker on Patents §5:28, p. 5– 104 (4th ed. 2009). 35 

### Modern American Pate nt La w By the mid-1900’s, m any courts were cons truing the term “art” by using words such as “method, process, sys tem, or like terms.” Be rman 713; see Expanded Metal Co. v. Br adford , 214 U. S. 366, 382 (1909) (“The word ‘proce ss’ has been brought into the decisions because it is suppos

edly an equivalent form of expression or inc l uded in the

——————

34 See also 1 A. Deller , Walker onPaten t s §2 6, p. 152 (2d e d . 1964) (A “ ‘ s y s tem’ ormethod of tr ansac t ingbu sin e ss is n o t [a pr oc ess], n o rdoes it c o me within anyother desig n ation of patentable subj ec t mat t er”).

35 Alth ou gha few paten t s issu ed befor e1952 th at r e lated t ometh ods of doing busi ness, see Uni t ed Stat e s P a ten tan d Tr a d emar k Offic e , Automate d Fi nanc ial orM a nag e ment Data Processing Methods, online at http://www .us p to.gov/w eb/menu/bu s m ethp/index. h tml (all Internet mater i a l s as v i sited Ju n e26, 201 0, an d av ailab l e in Cler k of Cou r t’ s ca s efile), t h es e pat e nt s were ra re, o f t e n is s u ed t h rough s e lf

regis t ra t i on ra t h er t h a na n y form a lized pa t e ntexa m inat ion, genera lly wer e n o t u p h e ld byc o ur ts, an d ar gu ablyar e distin g u ish able fr om pu re paten t s onbu sin e ss me th ods in sofar as they often invo lved the manu

facture of new objects. See In re Bilski , 545 F. 3d 94 3, 974, an d n

. 18 (CA Fed. 20 0 8) (c ase belo w) (Dy k , J., c o n c u r r i n g); Pollac k74–7 5; Walterscheid, To Promote the Progress 243.29 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### statutory designation of a new an d useful art”). 36

### Thus in 1952, when Congress updated th e patent la ws as part of its ongoing project to revise theUnited States Code, it changed th e operative languag e in §101, replacing the term “art” with “pro cess” and adding a definition of “proc

ess” as a “process, art or method,” §100(b). That change was made for clarity and did not alter the scope of a patentable “process.” See Dieh r , 450 U. S., at 184. The new terminology was added only in recognitio n of the fact that courts had been interpretingthe categor y “art” by us ing the ter ms “proces s or method”; Congress thus wante dto avoid “the necessityof explana tion that th e word ‘art ’ a s used in th is place means ‘process or method.’ ” S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952) (hereinafter S. Rep. 197 9); accord, H. R. Rep. No. 1923, 82d Cong., 2 d Sess., 6 (1952) (herein a fter H. R. Rep. 1923); see also id., at 17 (explaining that “the word ‘art’ ” in §101 “has been interpreted by the courts as being practically synonymous with proces s or method,” and that the switc hto the word “[p]rocess” was intended only for clarity). 37 

### It appears that when Congress changed the la nguage in §101 to inc o rporate the prevailin g judicial terminology, it merely codified the p r evailing judicial interpretation of that cate gory of subjec t matter. See Diehr , 450 U. S., at 184; see als o Barberv. Gonzales , 3 47 U. S. 637, 641 (1954) (“While it is true that statut ory la nguage should be inter

preted whe n ever possible according to common usage , some term s acquire a special technical meaning by a process of j u dicial construction”). Both the Senate and House Committee Reports explained that th e word “pro c -

——————

36 For e x amples of such usage, see TheTe lep h oneCases , 1 26 U. S ., at 533, an d Burden , 15 How., a t267.

37 See also 98 C o n g . Rec

. A415 (19 52) (r em ar ks of Rep. Br y s on) (de

sc r ibing , afterthe fac t , the 195 2 Patent Ac t, and ex plainingthat “[t]he word ‘a rt ’ wa s cha n ged t o‘proces s ’ in order t ocla r ify it s m e a n ing. No changein s ub s tance was intended”).30 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### ess” was used in §101 “to clarify the present law as to the patentability of certain types of pro c esses or methods as to which some insubstantial doubts have been expressed.” S. Rep. 1979, at 5; accord, H. Rep. 1923, at 6

. And both noted that those terms were us ed to convey the prevailing meaning of the term “art,” “as i n terpreted” by courts, S. Rep. 1979, at 17; ac cord, H. Re p. 1923, at 17. Indeed, one of the main drafters of the Act explained that the definition of the term “process” in §100(b) reflects “how th e courts have construed the term ‘art.’ ” Tr. of address by Judge Giles S. Rich to the New Yo rk Patent L a w Associa

tion 7–8 (Nov. 6, 1952). As discussed above, by this time, c o urts had consistently construed t h e term “art” to excl ude methods of doing business. The 1952 Act likely ca ptured that same mean

ing. 38

### C f

. Graham , 383 U. S., a t1 6–17 (reasoning that because a provision of the 1952 Act “paraph r ases language which has often been used in decisions of th e courts” and was “added to the statu t e for uniformity and de finiteness, ” that provision shou ld b e treatedas “a codification of judi

cial precedents”). 39

### Indeed, Judge Rich, the main drafte r

——————

38 Th e 1952 Ac talso r e ta in ed th e lan g u a g e“inv en ts ordisc ov er s, ” whic h bythat time had ta ken on a c o nnotation thatwould tend t o exclude business methods. See B. Ev ans & C. Ev ans, A Dictionaryof Con t empor a r yUsag e 137 ( 195 7) (ex p lai n in gth at “disc o v e r ; i nv e n t” means “to ma ke orc r e ate s o methingnew, espec i ally , inmoder nusag e, s o m e t h ing ing e nious l y devis e d t o perform mechanical operations”).

39 As explained in Part II, su pra , th e Cou r ten g a g e s ina Jeky ll-an dHy de for mof inter p r e tation with r e sp ec t to the wor d“proc e ss” in §1 01. Itrej e ct s t h e int e rpret a t i onI proffer b e ca us e t h e words “ p roces s ” a n d “method” do not, on theirfa c e , dist inguish between different series o f ac ts. Ante , at 10. But i t als or ejec t s manysor t s of pr oc esses without a tex t u a l ba sis f o rdoin gso. See ante , at 4–5, 7, 12– 15. An d wh ile the Courts rests a great deal of weight on Park er v. Flook, 437 U. S. 5 8 4 (197 8), forit s an aly s i s of ab str a c tidea s, th e Cou r t mi n i mizes Flook ’s rejection of “a purely literal reading of §10 1 ,” a s well as Flook ’s reliance onth e h i stor ic al bac kdr o p of §101 an d ou r u n d er stan din gof wh at “th e sta t ute was e n ac ted to pr otec t,” id., at 588–5 90, 59 3; se e also Diamon d31 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### of the 1952 Act, later explained that “the in vention of a more effective organization of the materials in, and th e techniques of teaching a course in physics, chemistry, or Russian is not a patentable invention because it is outside of the enumerated ca tegories of ‘process, machine, manu

facture, or composition of matter, or any new and useful improvement thereof.’ ” Principles of Patentability, 28 Geo. Wash. L. Rev. 393, 394 (196 0). “Also outside that group,” he added, was a process for doing business: “the greatest inventio[n] of our times, the diaper service. ” Ibid

. 40 

### “Anything Under the S un” Despite strong evidence t hat Con gress has consistently authorized patents for a limited class of subject matte r and that the 1952 Act did not alter the nature of the then

existing limits, petitioners and their amiciemphasize a single phrase in the Act’s legislative history, which sug

gests that the statutory subject matter “ ‘in c lude[s] any

thing under the sun that is made by man.’ ” Brief for Petitioners 19 (quoting Ch akrabart y , 447 U. S., at 309, in turn quoti ng S. Rep. 1979, at 5). Similarly, the Cou rt relies on la nguage from our opin ion in Chakrabar t y that was based in part on this piece of legislative history. See ante , at 4, 6

. This relian c e is mispl a ced. We have never understood

—————— v. Die h r , 450 U. S. 175, 192 (198 1) (ex p la in in gth at a “ c laim sat i sfie s the requirements of §101 ” when it “is per f or minga function whic h the patent laws w e re des i gned t oprotect”).

40 Fort y yea r s la t e r, J u dg e Rich authored the State Stre et opinion that some hav eunder stood to m a ke busines s methods p a te ntable. But St ate Stree t dealt w i th whether a piece of software could be patented and addr essed on l yc l aims dir e c t ed at mac h in es, n o t pr oc esses. His opin ion may therefore be better unde r stood me rely as holding tha tan otherwise pa tentab le pr oces s is not unpa t entabl e s i mply because it is directed towa rd the c o nduct of doi n g b u s i nes s
— a nis s u e the Court ha s no occasion to address today. See State St re et, 149 F. 3d, at 137 5.32 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### that piece of legislative history to mean that any series of steps is a p a tentable process. Ind eed, if that were so, the n our many opinions ana lyzing wha tis a patentable process were simply wastes of pages in the U. S. Reports. And to accept that errant piece of le gislative history as widening the scope of the patent law would contradict other evi

dence in the congressional record, as well as our presump tion that the 1952 Act merely codified the meaningof “process” and did not expand it, see Diehr , 450 U. S., at 184. Taken in context, it is apparent that the quoted lan

guage has afar less expansive meaning. The full sentence in the Committee Reports reads: “A person may have ‘invented’ a machine or a manufacture, which may include anything u n der the sun that is made by man, but it is not necessarily patentable under secti on 101 unless the condi

tions of [thi s] title are fulfilled.” S. Rep. 1979, at 5; H. R. Rep. 1923, at 6. Viewed as a wh ole, it seem s clear tha t this language does notpurport to explain that “anythin g under the s un” is patentable. In deed, the l anguage may be understood to state the exact o p posite: that “[a] perso n may have ‘i nvented’ .

. . anything under the sun,” but th at thing “is n o t necessarily patentab le under section 101.” Thus, even in the Ch akrabar t yo p inion, which relied on this quote, we cautioned that the 1952 Reports did n o t “suggest th at §101 has no limit s or that it em braces every discovery.” 447 U. S., at 309. Moreover, even if the l anguage in the Committee Re

ports was meant to flesh out the meaning of any portion of §101, it did not purport to de fine the term “process.” The language refers only to “manufactu re[s]” and “machine[s],” tangible obj e cts “made by man.” It does notreference th e “process” ca tegory of su bject matte r (nor coulda process b e comfortablydescribed as something “ ma deb ym a n” )

. T h e language m a y also be understood merely as defining th e term “inve n ts” in §101. As Judge Dyk e x plained in his33 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### opinion below, the phrase “made by man” “is reminiscen t” of a 1790’s description of the limits of English patent law, that an “invention must be ‘made by man’ ” a n d cannot be
“ ‘a philosop h ical princi ple only , neither organi zed or ca pa ble of bein g organized’ from a patentable m anufacture. ” 545 F. 3d, at 976 (quoting Hornblowerv. Bou l ton, 8 T. R. 95, 98 (K. B. 1799)). The 1952 Act, in short, cannot be understood as expand

ing the scope of patentable subject matter b ysuggestin g that any series of step s may be patented as a “process ” under §101. If anything, the Act a ppears to have codified the conclusion that subject matte r which wa s understood not to be patentable in 1952 was to remain unpatentable. Our recent case law reinforces my view that a series of steps for conducting business is not a “process” under §101. Since Congress passed the 1952 Act, we have never ruled on whether that Act authorizes patents on business methods. But we ha ve cast significant doubt on that proposition by giving substantial weight to the machine

or-transformation test, as general methods of doing busi

ness do not pass that te st. And mo re recently, Members of this Court have noted that patents on bus in ess method s are of “suspect validity. ” eBay Inc

. v. Me rcExc hange, L. L. C. , 547 U. S. 388, 397 ( 2006) (K EN NEDY 

### , J., concurring). * * * Since at least the days of Assyrian merchants, people have devised better an d better wa ys to condu ct business. Yet it appe ars that ne ither the Patent Clause, nor early patent law, nor the current §101 contemplated or wa s publicly understood to mean that such innovations are patentable. Althoughit may be difficult to define with precision what is a pa tentabl e “process” under §101, th e historical clues conver ge on on e conclusion: A busines s method is not a “process.” And to the extent that there is ambiguity, we should be mindful of our judicialrole. “[W]e34BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### must proce e d cautiously when we are asked to exten d patent righ ts” into an area that t h e Patent Act likely was not “enacte d to p r otect , ” Flook , 43 7 U. S., a t 596, 593, lest we create alegal regime thatCo ngress never would ha ve endorsed, a n d that can be repaired only b ydisturbin g settled property righ ts. V Despite the strong historicalevide n ce that a method of doing busin ess does not constitute a “process” under §101, petitioners nonetheles s argue—and the Court suggests in dicta, ante , at 10–11—that a subsequent law, the First Inventor Defense Act of 1999, “must be read together” with §101 to make business methods patentab le. Brief fo r Petitioners 29. This argument utilizes a flawed method of statutory in terpretatio nand ignores the motivation for t h e 1999 Act. In 1999, following a Federal Circuit decisionthat inti

mated business meth ods could be patented, see State Str eet , 149 F. 3d 1368, Congress moved quickly to limit the potential fallout. Congress passed the 1 999 Act, co di

fied at 35 U. S. C. §27 3 , which provides a limited defense to claims of patent in fringement, see §273(b ) , regardin g certain “m ethod[s] of doing orconductin gbusiness,” §273(a)(3). It is appare nt, both fro mthe conte n t and history of the Act, that C o ngress did not in anyway ratify State Stree t (or, as peti tioners con t end, the b r oadest possible readi n g of Sta t e S t ree t). The Act merely limited one potential effect of that decision: that busines ses might s u ddenly find themselves liable for innocently using methods they as

sumed could not be pa tented. Th e Act did n o t purpor t t o amend the limitations in §101 on eligible subj ect matter. Indeed, Congress placed the statute in Part III of Title 35, which addresses “Patents and Protection of Patent Rights,” ra ther than in Part II, which contains §101 an d35 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### addresses “Patentability of Inventions and Grant of Pat

ents.” Particularly because petitioners’ reading of the 1999 Act would expand §101 to cover a category of pro c esses that have not “historically been eligible” for patents, Diehr , 450 U. S., at 18 4, we should be loathe to conclude that Congress eff e ctively amended §101 without saying so clearly. We generally presume that Congre ss “does not , one might say, hide elephants in mouseholes .” Whi t ma n v. Americ a n Truckin g

Assns., Inc. , 531 U. S. 457, 468 (2001). The Act th erefore is, at be st, merely evidence of 1999 legislative views on the meaning of the earlier, 1952 Act. “[T]he views of a subsequentCongress,” however, “form a hazardous basis for inf e rring the intent of an earlier on e. ” United S t a t esv. Price , 361 U. S. 304, 313 (19 60). When a later statute is offeredas “an ex pression of how the .

. . Congress interpreted a statute passed by another Con

gress . . . ahalf centu r y before ,” “such interpretation has very little, if any, si gnificance.” Rainwaterv. Uni t ed Sta t es , 356 U. S. 590, 593 (1958). Furthermore, even ass u ming that Congress’ views at the turn of the 21st c e ntury coul d potentially serve as a valid basis for interpreting a statute passed in the mid

20th century, the Firs t Inventor Defense Act does not aid petitioners because it does not show thatth e later Con

gress itself understood §101 to cov e r business methods. If anything, itshows that a few jud g es on the Federal Cir

cuit unders t ood §101 in that man n er and th at Congress understood what those judges had done. The Act appears to reflect su rprise and perhaps even dismay that business methods might be pate nted. Thus , in the months follow

ing State S t re et , congressiona lauthorities lamented tha t “business methods and processes .

. . until recently were thought no t to be pa tentable,” H. R. Rep. No. 106–464, p. 121 (199 9); accord, H. R. Rep. No. 106–28 7, pt. 1, p. 3136 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### (1999). 41 

### The fact that Congress decided it was appropri

ate to create a new de fe n s e to clai ms that bus iness method patents were being inf r inge d merely demonstrates recog

nition that such clai ms could create a significant new problem for the business community. The Court nonetheles s states that the 1999 Act “ac

knowledges that there may be bu siness meth od patents , ” thereby “cla r ify[ing]” its “understa n ding” of §101. Ante , a t 11. More specifically, the Court worries that if we were to interpret the 1952 Act to exclude business methods, our interpretati on “would render §273 meaningless.” Ibid. I agree that “[a] statute should be construed so that effect is given to all its provisions.” Corleyv. United States , 556 U. S. ___, ___ (2009) (slip op., at 9) (internal quotation marks omitted). But it is a different matter altogether when the Court construes one st atute, the 1952 Act, to give effect to a differen tstatute, the 1999 Act. The canon on which the Court relies is predicated upon the idea tha t “[a] statute is passed as a whole.” 2A N. Singer & J

. Singer, Sta t utes and Statutory Construction §46:5, p. 18 9 (7th ed. 2007). But th e two statu t es in question were not passed as a whole. Put another way, we ordinarily assume, quite sensibly, that Congress would not in one st atute include two provi

sions that are at odds with each other. But as this case shows, that sensible reasoning can break down wh en

——————

41 See also 14 5 Con g . Rec

. 30985 ( 1 9 99) (r e m ar ks of Sen

. Sc h u m er) (explaining that “[i]n State Stree t, the Cour t did away with the so-c alled
‘ b usiness met h ods’ exc e ption to statutor ypatentab le subjec t matter , ” and “[t]he f i rst inventor defense w ill pr ovide .

. . important, needed protections in the face of the unc er taintypr esented b y. . . the Stat e Stree tca s e ” ) ; id

. , at 31007 (r emar ks of Sen

. DeWin e ) (“Vir t u a llyn oon e in the industry believed that thes e me thods or processes were pat

entable”); id., at 1 9 2 81 (r em ar ks of Rep. M a n z u llo) (“B e for eth e Stat e Str eet B a nk a n d Tr ust c a se . . . it was univ e r s allythough t that meth

ods of doing orcondu c ting b u s i nes s were no t pa tentab le items ” ).37 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### applied to di fferent statutes. 42

### The 1 999 Act was passed to limit the impact of the Federal Cir c uit’s then- r ecent state

ments on the 1952 Act. Although repudiating that judicia l dictum (as we should) might effe ctively render the 19 99 Act a nullity going forward, such a holdin g would not mean that it was a nullity when Congress enacted it

. Section 27 3 may ha ve been a technically unnecessary response to confusion about patentable subject matter, bu t it appeared necessary in 1999 in light of wh at was bein g discussed in legal circles at the time. 43

### Consid er the logi

cal implications of the Court’s ap p r oach to th is question: If, tomorrow, Con gress were to conclude that patents o n business m e thods are so important that the special i n fringement defense in§273 ought to be ab olished, an d thus repealed that provision, this could paradoxical l y strengthen the case aga i nstsuchpatents be cause there would no longer be a § 273 that “acknowledges

. . . business method patents,” ante , at 11. Tha tis not a sound method of statutoryinterpretat i on. In light of its history and purpose, I thinkit obvious

——————

42 The Court opines that“[t]hi s pr inc i ple, of course , applies to inter

preting any t w o provisions in the U. S. Code, even when Congre ss enac ted the pr ov isions atdiffer e nt ti mes.” Ante , a t 1 1 (em p hasis added). The o n ly support the Court o ffers for this proposition is a 1 9 3 7 opinion for three Justices, i n Haguev. C o mmittee for Indus trial Or

ganiza tion , 307 U. S. 496, 5 28– 53 0 (19 39) (o pin i onof Ston e, J.). Bu t that op inion i s inappo si te. Althou gh Justice Stone s t ated th at two pr ov isions “m ust be r e ad to g e ther ,” id. , at 530, h edid so to ex plainth a t anambig u ityina later

- in -ti m e sta t ute must be understood in light of the earlier-in-time framewo r k agai n s t wh ic hth e ambig u ou s statu t e was pass ed, id. , at 528–5 3 0 , par t ic u l ar lybec a u s e th e latersta t u t e ex plic itlystat ed that it “sh a ll not be c o nstr ued to appl y” to the pr ovi

sion created by an earlier Act, id. , at 528.

43 I am nottr y i ngto “ov e r c o me” an “es t ab lished r u le of sta t utor yin

ter p r e tation” with “judic ialspec ulatio n a s to the subje c tiv eintent of v a r i ou s legi slator s, ” ante , a t11, bu t, r a th er , I am ex plain i n gwhyth e Court has i llo gically expanded the ca non upon which it relies b e yond tha tca non’s logica l underpin n ings

.38BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### that the 19 99 Congres s would never have en acted §273 if it had foreseen that this Court would rely on the provision as a bas is f o r concluding that business m e thods are pat

entable. Section 273 is a red herring; we should be focus

ing our attention on §1 01 itself. VI The constitutionally mandated pu rpose and function of the patentlaws bolster the conc lusion that methods of doing business are not “processes” under §101. The Constit u tion allows Congress to issue patents “[t]o promote the Progress of .

. . useful Arts,” Art. I, §8, cl. 8. This clause “is both agrant of power and a limitation. ” Graham , 38 3 U. S., at 5

. It “reflects a balance between the need to encourage in novation and the avo i dance of mo

nopolies wh ich stifle competition without any concomitant advance in the ‘Progress of Science and useful Arts.’ ” Bonito Boats, 489 U. S., at 146. “This is the standard expressed in the Constitution and it may n o t be ignored. And it is in this light that patent validity ‘requires refer

ence to [the] standar d writ ten into the Constitution.’ ” Graham , 3 83 U. S., at 6 (quoting Great Atlan t ic & Pacifi c Tea Co. v. Superm ark e t Equipm e n t Corp. , 340 U. S. 147, 154 (1950) (Douglas, J ., concurrin g) (emphas is deleted)); see also Grantv. Ray m ond , 6 Pet. 218, 241–242 (1832) (explaining that patent “laws which are passed to give effect to this [constitutional] purpose ought, we think, t o be construed in the spirit in which they have been made”). 44

——————

44 See also Quanta Com p uter, Inc. v. L GElectro nic s , I n c. , 553 U. S. 617, 62 6 (20 0 8) (“ ‘[T]he pri m ary purposeof ou rpatent laws is not the creation of priv ate fortunes f o r the o w ners of patents but is “to promote the progress of scienc e and useful arts” ’ ” (quoting Motion Pic t ure Patents Co. v. Universal Fi lm Mfg. Co. , 243 U. S. 50 2 , 511 ( 1 9 17))); Pfaff v. WellsElectroni cs, Inc. , 525 U. S. 55, 6 3 (1 998) (“[T]h e paten t s y s t emrepresent s aca refully cra ft edbar gainth at en c o u r ag es bothth e c r e ationan d th e publicdisc losu r eof new an d u s eful adv a n c es in39 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### Thus, although it is for Congre ss to “implement the stated purpose of the Framers by sel e cting the pol i cy which in its judgment best e ffectuates the constitutional aim,” Gr ah am , 383 U. S., at 6, we interpret ambiguous patent laws as a set of rules that “ w ee[d] out those inven

tions which would not be disclosed or devised but for the inducement of a paten t ,” id. , at 1 1 , and that “embod[y]” the “careful balance between the need to promote innova

tion and the recognition that i m itation and refinement through imitation are both necessary to invention itself and the very lifebloodof a comp etitive econ omy,” Bonito Boats , 489 U. S., at 14 6. And absent a discernible signal from Congress, we proceed cautiously when dealing with patents that press on th e lim its of the “ ‘standard written into the constitution,’ ” Graham , 3 83 U. S., at 6, for at th e “fringes of congressional power,” “more is required of legislatures than a vague delegati on to b e filled in later,” Barenblattv. Uni t ed S t ates , 360 U. S. 109, 139–140 (1959) (Black, J., dissenting); see also Gre e nev. McElroy , 3 60 U. S. 474, 507 (1959) (“[D]ecisions of great c o nstitutional import and effect” “requir[e] ca reful and purposeful con

sideration by those responsible for enacting and imple

menting our laws”). W e should not casually risk exceedin g the constitutional limit ation on Congress’ behalf. The Court has kept this “constitutional standard” i n mind whendeciding what is pa tentable subject matter under §101. For exa m ple, we h ave held th at no one can patent “laws of nature, natural ph enomena, a n d abstract ideas.” Diehr , 450 U. S., at 185. These “are the basic tools of scientific and technological work,” Ben s on , 409 U. S., a t 67, and therefore, if p a tented, would stifle th e very pro gress that Congress is authorized to promote, see, e.g. , O’Reilly , 15 How., at 1 13 (explaining tha tMo rse’s patent on electromagnetism for writing would preempt a wide

—————— technology”).40 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### swath of technological d e velopment s ). Without any legislativ e guidance to the contr a ry, ther e is a real concern that patents on business m e thods would press on the limits of the “standard expressed in the Con

stitution,” Graham , 383 U. S., at 6, more likely stifling progress than “promot[ing]” it. U. S. Const., Art. I, §8, cl. 8. I recognize that not all methods of doing busines s are the same, and that therefore the constitutional “bal

ance,” Bonito Boats, 4 89 U. S., a t146, may vary withi n this catego ry. Ne ver t heless, I th ink that this balance generally supports the historic understandingof the term “process” as excluding business methods. And a categori

cal analysis fits withthe purpo s e, as Thomas Jefferson explained, of ensuring that “ ‘every one might k n o w when his actions were safe a n d lawful,’ ” Graham , 3 83 U. S., at 10; see also Fe st o C o rp. v. Shoketsu Kinzoku Kogyo Kabu

shiki Co. , 535 U. S. 722, 730–731 (2002) (“The monopoly is a property right; and like any property righ t, its bounda

ries shouldbe clear. This clarity is essentia l to promote progress”); Diehr , 450 U. S., at 21 9 (S TE VEN S 

### , J., dissent

ing) (it is n e cessary to have “rules that enable a conscien

tious patent lawyer to determine with a fair degree of accurac y” what is patentable). On one side of the bala n ce is whether a patent monopol y is necessaryto “motiv ate the innovation,” Pf aff v. Wells Elec tronic s, Inc., 525 U. S. 55, 63 (1998). Al though the r e is certainly disagreement about the need for patents, scholars generally agree that when innovation is expen

sive, risky, and easily copied , inventors are less likely to undertake the guaran teed costs of innovation in order to obtain the mere possib ility of ani nvention that others can copy. 45

### Both common sense and recent econom ic scholar

ship suggest that these dynamics of cost, risk, and reward

——————

45 See generally W. Landes & R. Po sner, T h e Economic Structure of In tellec t u a l Pr oper tyLaw 13–15 (2 00 3).41 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### varybythe ty pe of thi n g being pa tented. 46

### An dt h e f u n c tional case that patents pr omote progress generally is stronger for subject matter th a thas “historically been eligible to r e ceive the protection of our patent laws,” Di ehr , 450 U. S., at 184, than for methods of doing business. Many have expressed serious d o ubts abou twhethe r patents are necessary to encourage business innovation. 47 

### Despite the fact that we have long assum e d busines s methods could not be patented, it has been remarked th at “the chief business of th e American people, is business.” 48 

### Federal Express developed an ov ernight del i very servic e and a variety of specific methods (including shipping through a central hub and online packa g e tra cking) with

out a patent. Althoughcounterfactuals are a dubious form of analysis, I find it h a rd to believe that many of our en

trepreneurs forwent b u siness innovation because they could not claim a patent on their new methods. “[C]ompanies have am ple incentiv es to d e velop business methods even witho u t patent protection, because the competitive mark etplace re wards companies that use more efficient business methods.” Burk & Le mley 1618. 49 

### Innovators often captu r e advanta g es from new busines s methods notwithstandi n g the risk of others copying their innovation. Some bus iness methods occur i nsecret an d

——————

46 See, e.g. , Burk & Lemley, Policy Leversin Patent L a w, 89 Va. L. Rev

. 1575, 157 7– 158 9 (20 03) (h er ein a fterBu r k& Lemley).

47 See, e.g. , Bu rk & Lem l ey 161 8; C a r r i er, Unraveling the PatentAn titr u s t Par a dox , 150 U. Pa. L. Rev

. 761, 826 (2 00 2) (h er ein a fter Car r i er); D r eyfu ss, Ar e Bu s i n e ss M e th ods Paten t s Ba dforBu sin e ss? 16 S a n t a Cla r a Compu t er& HighTec h . L. J. 263, 2 74– 27 7 (20 00) (hereinafter Dreyfuss); Posner, The Law and Economics of Intellectual Pr oper ty , 131 Daedalu s 5 (S pr in g2002).

48 C. Coolidge, The Press Under a Free Government, in F o undations of th e Republic : Speec h e s and Addr esses 1 87 (19 26).

49 See also Poll a c k 75–76 ( “ Si n c e bu sin e ss meth ods ar e ‘ u sefu l’ wh en t h ey direct ly ea rn re venue , t h ey a r e inherently unlikely to be unde r produced”).42 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### therefore can be protected with trade secrecy. 50

### An df o r those methods that oc cur in publ ic, firms th at innovate often capture long-term benefits from doing so, thanks to various first mover advantages, including lockins, brand

ing, and networking effects. 51 

### Business innova tion, more

over, generally does n o t entail th e same k i n d s of riskas does more t r aditional, technolo gical innovation. It gener

ally does not require th e same “enormous costs in terms of time, research, and d e velopment , ” Bicron , 416 U. S., a t 480, and thus does notrequire the same kind of “compen

sation to [innovators] for thei r labor, toil, and expense,” Seymour v. Osborne , 11 Wall. 516, 533–544 (1871). 52 

### Nor, in ma ny cases, would patents on bus iness methods promote progress by encouraging “public disclosure .” Pfaff , 525 U. S., at 63; see a l so Brenner v. Manson , 383 U. S. 519, 5 33 (1966) (“[O]ne of the purposes o f the pa tent system is to encourage dissemin a tion of inf o rmation con

cerning dis c overies and inventions”). Many business methods are practiced in public, and therefore a patent does not necessarily en courage the disseminat ion of any

thing not already known. And for the meth ods practiced in private, the benefits of disclosu re may be small: Man y such methods are distributive, not productive—that is, they do no t generate any efficiency butonly provide a means for competitors to one-up each other in a battle for pieces of the pie. And as the Co urt has explained, “it i s

——————

50 See R. Levin et al., Appropriating the Returns from Indu strial Re

sear c han d Dev e lopmen t, in 3 Br ookin g s Paper s onEc on. Ac tiv i ty794– 795 (1 98 7).

51 See Bu r k& Lemley161 8; Dr ey fu ss 275; s ee g e n e r a llyC a r r i er821– 823. Con c ede d ly , th er e maysome meth o d s of doin gb u sin e ss th a td o notconfers u ff icientfirs t

- m o ver a dva nt a g e s . S ee Ab ra mowicz & Duff y , Int e llect ua l Propert yfor M a rketExpe rimentation, 8 3 N. Y. U. L. R e v. 337, 34 0– 34 2 (200 8).

52 See Burk & Lemley161 8; C a rrier 826; Olson, Takingthe Utilit ar ia n Ba sis for Pa t e ntLa w S e rious l y: Th e Ca s eFor Res t rict ing Pa t

en table Subj ec t M a tter , 82 Temp. L. Rev

. 181, 231 (2 00 9).43 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### hard to see how the p ublic wo uld be b e nefit e d by disclo

sure” of certain business tools, sin c e the nondisclosure of these tool s “encourages busin ess e s to in itia te new and individualized plans of operation,” which “in turn, leads to a greater v a riety of bu siness methods.” Bic ro n , 416 U. S. , at 483. In any even t, even if p a tents on b u siness m e thods were useful for encouraging innovation and disclosure, it woul d still be qu estionable whether they would, on balance, facilitate or impede the progress of American busines s. For even when patents encourage innovation and disclo

sure, “ too muchpatent protectioncan impede rather than ‘promote the Progress of .

. . useful Arts.’ ” Laborato ry Corp. of Am ericaHoldi n gs v. Meta bolite Labor a torie s , Inc. , 548 U. S. 124, 126–127 (2006) (B REYER 

### , J ., dissentin g from dismissal of certiorari). P a tents “candiscourage research by impeding the free exchange of information,” for example, by forcing people to “avoid the use of poten

tially patented ideas, by leading them to conduct costl y and time-consuming searches of existing or pending pat

ents, by req u iring complex licensin garrangem ents, and b y raising the costs of using the pate nted” meth ods. Id. , at 127. Altho u gh “[e]very patent is the grant of a privilege of exacting tol l s from the public,” Great A t lan t ic , 340 U. S., at 154 (Douglas, J., concurring), the tolls of patents on business m e thods may be especially high. The primary concernis that pate nts on business meth

ods may prohibit a wi de swat h of legitimate competition and innovation. As one scholar explains, “it is usefu l to conceptualize k n owledge as a pyramid: the b i g ideas ar e on top; specific applications are at the bottom.” Dreyfuss 275. The higher up a patent is on the pyramid, the greater the social cost and the greater the hindrance to further inn o vation. 53 

### Thus, this Court stated in Benson

——————

53 See Dr ey fu ss 276; M e r g es & Nelson , On th e ComplexEc on omic s of44BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### that “[p]henomena of nature .

. . , mental processes, an d abstract intellectual concepts are not patentable, as they are the bas ic tools of scientif ic and technological work, ” 409 U. S., at 67; see also, Joseph E. Seagram & Sons, In c. , 180 F. 2d, at 28 (“To give appellant a monopoly, throu gh the issuanc e of apatent, upon so great an area .

. . wou l d in our viewimpose without warr ant of law a serious re

straint upo nthe adva nce of science and indu stry”). Bus i

ness methods are similarly often closer to “big ideas,” as they are the basic to ol s of comme rcial wor k

. They are also, inma ny cases, the basic tools of further business innovation: Innovation in busin ess method s is often a sequential and complementary process in which imitation may be a “ spur to inno vation” andpatents ma y “become a n impedimen t .” Bessen & Maskin, Sequential Innovation, Patents, and Imitation, 40 RAND J. Eco n . 611, 61 3 (2009). 54

### “Think how the airline industry might now be structu red if the first c o mpany to offer frequent flyer miles had enjoyed the sole ri ght to award them.” Dreyfuss 264. “[I]mitation and refinement through imitation are bot h necessary to inventionitself and the very lifeblood of a competitive economy.” Bonito Boats , 489 U. S., at 146. If business methods could be pate nted, then many busi

ness decisi ons, no ma tter how small, couldbe potential patent violations. Businesses would either live in constant fear of litigation or would need to undertake the costs of searching through patents that describe methods of doing business, at tempting to decide whether their innovation is one that remains in th e public domain. See Long, Infor

mation Costs in Patent and Copyri ght, 90 Va. L. Rev. 465,

—————— Paten tSc ope, 90 Colu m. L. Rev

. 839, 873

– 878 (1 99 0).

54 See also Rask ind, The StateStreet BankDecision, The BadBusi

ness of Unlimi t ed Patent Protection forMeth ods of D o ingBu sin e ss, 10 For dh a m In tell. Pr op. M e dia & En t. L. J. 61, 102 (19 9 9 ) (“In ter a c t iv e emula t ion more tha ninno va tion is the dr iv i n gfor c eof bus i ness metho d cha n ges ” ).45 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### 487–488 (2004) (hereinafter Long). But as we have long explained, patents should not “embaras[s] the honest pursuit of business with fears and apprehensions of con

cealed lien s and unknown liabiliti e s to lawsui ts and vexa

tious accountings for p r ofits made in good faith.” Atlantic Worksv. Br ady , 107 U. S. 192, 200 (1883). 55



### These effect s are magnified by the “potential vagueness” of business method patents, eB ay Inc. , 547 U. S., at 39 7 (K ENN E DY 

### , J., concurring). When it comes to patents, “clarity is e ssential to promote pr ogress.” Fe sto Corp. , 5 35 U. S., at 730–731. Yetpatents on methods of conducting business g e nerally are composed largely or entirely of intangible steps. Compared to “the k i nds of goods

. . . around whi c h patent rules historically developed,” it thu s tends to be more costly andtime consuming to sear ch through, an d to negotiate licenses f o r, patents on business methods. See Long 539 , 470. 56 

### The breadth of business methods, their omnipresence in our society, and their potent ial vagueness also invite a particularly pernicious use of patents that we have long criticized. As early as the 19t h century, we e x plained that the patent laws are not intended to “creat[e] a class of

——————

55 Th er e is subst a n t ialac adem icde bate, moreover, about whether the normal process of screening patent s fornov e ltyan d obv i ou sn ess c a n function effe ctively for business me thod s. The argument goes that bec a u s e bu sin e ss me th ods a r e bothv a guea n d not confined to a n y on e industry, there is nota well -confined body of pr iorar t t oc o n s u l t, an d ther efor e many“bad” pa te nts are likely to issue, a pr oblem that would need to be sorted out in lat e r litigation. See, e.g. , Dr ey fu ss 268– 27 0 ; Eisenberg , Analy z e This: A Law and Economics Agenda for the Patent Sy stem, 53 V a n d . L. Rev

. 2081, 209 0 (20 0 0 ) ; M e r g es 589– 590.

56 S ee als oJ. Bes s e n & M. Me urer , Patent Failure: How J u dges , Bu

r e au c r a ts, an d Lawy er s Pu t In n o v a tor s at Risk 46–7 2 (2 008) (h er ein a f

ter Bes s en & Meure r); P. Menell & S. S c ot chm e r, Int e llect ua l Propert y Law, in2 Han dbook of L a w an d Ec on omic s 15 00 –1 501, 1 5 0 6(M

. Polinsky & S. Shavell eds. 200 7). Concededly, alterati ons in the rem

edystr u c t u r e, su c has th e Fir s t Inv e n t or Defen s e Ac t of 199 9, §430 1 et seq ., 113 Stat. 153 6, c o dified at 35 U. S. C. §273, mi tig a te th ese c o sts.46 BILSKI v. KAPPOS S TEVENS , J., c o ncu rrin gin j u dgment 

### speculative schemers who make it their business to watch the advancing wave of improvement, and gather its foa m in the form of patented monopolies, which enable themto lay a heavytax u p on t h e industryof the coun try, withou t contributing any thingto the re al advance m ent of th e arts.” Atlantic Work s , 107 U. S., at 200. Yet business method patents may have begun to do exactly that. See eBay Inc. , 547 U. S., at 396–397 (opinion of K ENNEDY 

### , J.). These many costs of b u siness method patents not only may stifle innovation, but they are also lik ely to “stifle competition,” Bonito Boats, 489 U. S., at 146. Even if a business m e thod patent is ultimately held invalid, patent holders may be able to use it to threaten litigation and to bully competitors, esp e ciallythos e that cannot bear the costs of a drawnout, fact-intens ive patent litigation. 57 

### That can ta ke a particular toll onsmall and upstart bus i

nesses. 58 

### Of course, patents always serve as a barrier to competition for the typ e of subject matter tha tis patented

. But patents on busines s methods are patents on busines s itself. Therefore, unli k e virtually every othe r category of patents, the yare b ythe i r verynatu r e likely to depress the dynamism of the marketplace. 59

——————

57 See generally Farrell & Sh apiro, How St rong Are Wea kPatents? 98 A m er. Econ. Rev

. 1347 (200 8); Me urer, Controlling Opportunisti c and Anti-Co m petit iv eIntellec t ual Pr oper tyLitig a ti on, 44 Bosto n Colleg eL. Rev

. 509 (2003); M oor e, Populism an d Pa t e n t s, 82 N. Y

. U. L. Rev

. 69, 90– 91 (2 007).

58 See Bes s en& M e u r er176; Less ig , Th e Deathof Cyb e r s pac e , 57 Wash . & Lee L. Rev

. 337, 346– 34 7 (200 0).

59 Congres s a n d t h e court s have worked lon ga n d ha rd t o crea t e a n d adminis t erantitr ust l a ws t h at ensur ebusinesse s c a nnot pr ev ent eac h other from co mpeting vigorously. If methods of c o nduc tingbusiness wer ethemselv es patentab l e , then virtually any novel, nonobvious bu sin e ss meth od c o u l d be gr an ted a federally protected monopoly. The tension this migh t c r e ate with our antitr ust r e gi me pr ov ides y e t an ot her rea s on for s k ept i cismt h a t Congres s would have wa nt ed the patent laws to ex tend to business methods.47 Cite as: 56 1 U

. S. ____ (2010) S TEVENS , J., c o ncu rrin gin j u dgment 

### * * * The constitutional sta n dard for patentability is difficult to apply with any precision, and Congress has significa n t discretion to “impleme nt the stated purpose of the Fram

ers by selecting the p o licy wh ich in its judgment best effectuates the constitutional aim,” Grah am , 383 U. S., at 6. But Congress has not, eith er explicitly or implicitly, determined that patents on meth ods of doi n g busines s would effectuate this aim. And as I understand thei r practical co nsequences, it is hard to see h o w they would. VII The Constitution gra n ts to Congress an important power to promote inno vation. In its exercise of that power, Congress has establis hed an intricate system of intellec

tual property. The s c ope of pat e ntable subject matte r under that system is broad. But i tis not endless. In th e absence of any clear gui d ance from Congress, we have only limited textual, historical, and fu nctional clues on which to rely. Those clues all point toward the same conclusion: that petitio n ers’ claim is not a “pr o cess” within the mean

ing of §101 because methods of doing business are not, in themselves, covered bythe statute. In my view, ackno w l

edging as much would be a far more sens ible and re

strained way to resolve this case. Accordingly, while I concur in the judgme nt, I stron gly disagr ee with the Court’s disp osition of this case._________________

_________________ 1 Cite as: 56 1 U

. S. ____ (2010)
B REYER , J ., concu rrin gin j u dgm e nt 

# SUPREME CO URT O FTHE UNI TED STATES

No. 08–9 64 

### BER NAR D L. BILSKI AND 

### RAN D A. WARSAW , PETITIONERS v. DA VID J. KA P P OS, UN D ER SEC RETARY OF COMMERC E FOR IN TE LLECT UAL PROPER TY AND DIR ECT OR,

PATEN TAN D TRAD EMAR K O F FIC E ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEAL S FOR THE FEDERAL CIRC UI T [Ju n e28, 2010 ] 

### J USTICE 

### B RE YE R 

### , wi th whom J UST I CE 

### S CALIA 

### joins as to Part II, concurring in t h e judgment. I I agree with J USTIC E 

### S TEVEN S

### that a “general method of engaging i nbusiness transactio n s” is not a patentab le “process” within the m e aning of 35 U. S. C. §101. Ante, at 2 (S TEVEN S 

### , J., concurring in judgment). This Court h a s never before held that so-called “business m e thods” are patentable, and, in m yview, the text, history, and pu r poses of the Patent Act make cl ear that th ey are not. Ante , at 10 –47. I would therefore decide this case on that ground, and I join J USTICE 

### S TEVEN S 

### ’ opinion in full. I write sep a rately, however, in o r der to hi gh light the substantial agre emen t among many Members of the Court on many of the fundamental issu es of patent l a w raised by this case. In light of th e need for c l arity and s e ttled law i n this highly technical area, I think it appropria t e to do so. II In additionto the Court’s unanimous agreement tha t the claims at issue h e re are unpatentable abs tract ideas, it is my view that the following four points are consistent2 BILSKI v. KAPPOS
B REYER , J ., concu rrin gin j u dgm e nt 

### with both t h e opinion of the Court and J USTI CE 

### S TEVEN S 

### ’ opinion con c urring in the judgment: First, altho u gh the text of §101 is broad, it is not with

out limit. See ante , at 4–5 (opinion of the Co urt); an te, at 10 (S TEVEN S 

### , J., concurring in judgment). “[T]he underly

ing policy of the patent system [is] that ‘the things which are worth to the public the embarrassment of an exclusive patent,’ . . . must outweigh the restrictive effect of the limited patent monopoly.” Graha m v. John Deere Co. of Kansas City , 383 U. S. 1, 10–11 (1966) (quoting Lette r from Thomas Jefferson to IsaacMcPherson (Aug. 13, 1813), in 6 Writings of Thomas Jef f erson 181 (H. Washing

ton ed.)). T h e Court has thus been careful in interpreting the Patent Act to “det ermine not only whatis protecte d, but also wh at is free for all to use.” Boni to B o ats, Inc. v. Thunder Craft Boats, Inc. , 489 U. S. 141, 151 (1989). In particular, the Court has long held that “[p]henomena of nature, though just discover ed, mental processes, and abstract in tellectual concepts are not patentable” under §101, since allowing individuals to patent these funda

mental pri n ciples would “wholly pre-empt” the public’s access to the “basic tools of scientific and technological work. ” Gottsch alkv. Benson , 40 9 U. S. 63, 67, 72 (1972); see als o , e.g., Diamondv. Dieh r , 45 0 U. S. 175, 185 (1981); Diamondv. Chakraba r t y , 447 U. S. 303, 309 ( 1980). Second , in a series of cases that extend back over a century, th e Court has stated that “[t]ransformation a n d reduction of an article to a differ e nt state or thing is the clue to the patentability of a process claim that does no t include particular machines.” Diehr , sup ra , at 184 (em

phasis added; internal quotation marks omitted); see als o , e.g., Ben s on , supra , at 70; Parkerv. Flook , 437 U. S. 584 , 588, n. 9 (1978); Coc h ranev. Deener , 94 U. S. 780, 788 (1877). Application of this test, the so-called “machine-or

transformation test,” has thus repeatedly helped the Court to determine what is “a patentable ‘process.’ ” Flook , supra,3 Cite as: 56 1 U

. S. ____ (2010)
B REYER , J ., concu rrin gin j u dgm e nt 

### at 589. Third , whi l e the machine-or-transformation test has always been a “useful and important clue,” it has never been the “s ole test” fordeterminin g patentability. Ante, at 8; see also ante, at1 ( S TEVENS 

### , J., concurring in judg

ment); Ben s on , supra , at 71 (rejecting the argument tha t “no process patent could ever qualify” for protection under §101 “if it did not me et the [machine-or-transformation] requiremen t s”). Rathe r , the Court has empha s ized that a process claim meets the requirements of §101 when, “co n sidered as a whole,” it “is performing a function which the patent laws were designed to prot ect ( e.g. , tra n sforming or reducing a narticle to a different state or thing).” Dieh r , supra, at 1 92. The ma chine-or-tra nsformation test is th us an important example of how a court can det e rmine pat

entability under §101, but the Federal Circuit erred in thi s case by treating it as th e exclusive test

. Fourth , alt h ough the machine-or-transformat ion test is not the onl ytest for patentability, this by no means indi

cates that anything which produ c es a “ ‘useful, concrete, and tangibl e result,’ ” Sta t e Stree t B a nk & Trus t Co. v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373 (CA Fed. 1998), is patenta b le. “[T]hi s Court has never ma de such a statement and, if taken literally, the statement would cover instances where this Court has held the con

trar y .” La boratory Corp. of Amer ica Holdingsv. Metabo

lite Labor a tories , Inc. , 548 U. S. 124, 136 (20 06) (B REYE R 

### , J., dissenting from dismissal of certiorari as improvidently granted); see als o , e.g. , O’Reillyv. Morse , 15 How. 62, 117 (1854); Flook , supra , at 590. Indeed, the introductionof the “useful, concrete, and tangible result”approach to patentability, as s o ciated wi th the Fe de ral Ci rcui t’s State Streetdecision , prece d ed the granting of patents that “ranged from the somewhat ridiculous to the truly ab

surd.” In re Bilski , 545 F. 3d 943 , 1004 (CA Fed. 2008) (Mayer, J., dissenting) (citing patents on , inter alia , a4 BILSKI v. KAPPOS
B REYER , J ., concu rrin gin j u dgm e nt 

### “method of training j a nitors to dust and v a cuum using video displays,” a “system for toilet reservations,” and a “method of using co lor- coded brac e l ets t o d e si gnate datin g status in order to lim it‘the embar rassment of rejection’ ”); see a l s o Brief for Respondent 4 0–41, and n. 20 (listing dubiou s pat e nts). To t h e extent t h at theFed e ral C i rcuit ’s decision in this case reject ed that approach, nothing in today’s deci sionsh ouldbe ta ken as disappr oving of that determin ati o n. See ante , at 16; ant e , at 2, n. 1 (S TEVEN S 

### , J., concurring in judg ment). In sum, it is my view that, in re emphasizin g that the “machine-or-transform ation” te st is not necessarily the sole test of patentability, the Court intends neither to de

emphasize the test’s usefulness n o r to suggest that many patentable processes lie beyond its reach. III With these observations, I concur in the Court’s judgment.