(Slip Opinion) OCTOBER TERM, 2009 1 

Syllabus 

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader. 

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 

SUPREME COURT OF THE UNITED STATES 

Syllabus 

BILSKI ET AL. v. KAPPOS, UNDER SECRETARY OF 

COMMERCE FOR INTELLECTUAL PROPERTY AND 

DIRECTOR, PATENT AND TRADEMARK OFFICE 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 

THE FEDERAL CIRCUIT 

No. 08–964. Argued November 9, 2009—Decided June 28, 2010 

Petitioners’ patent application seeks protection for a claimed invention 

that explains how commodities buyers and sellers in the energy market can protect, or hedge, against the risk of price changes. The key 

claims are claim 1, which describes a series of steps instructing how 

to hedge risk, and claim 4, which places the claim 1 concept into a 

simple mathematical formula. The remaining claims explain how 

claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand. The patent examiner rejected the application on the grounds

that the invention is not implemented on a specific apparatus, merely 

manipulates an abstract idea, and solves a purely mathematical 

problem. The Board of Patent Appeals and Interferences agreed and 

affirmed. The Federal Circuit, in turn, affirmed. The en banc court 

rejected its prior test for determining whether a claimed invention 

was a patentable “process” under Patent Act, 35 U. S. C. §101—i.e., 

whether the invention produced a “useful, concrete, and tangible result,” see, e.g., State Street Bank & Trust Co v. Signature Financial 

Group, Inc., 149 F. 3d 1368, 1373—holding instead that a claimed

process is patent eligible if: (1) it is tied to a particular machine or 

apparatus, or (2) it transforms a particular article into a different

state or thing. Concluding that this “machine-or-transformation test”

is the sole test for determining patent eligibility of a “process” under 

§101, the court applied the test and held that the application was not

patent eligible. 

Held: The judgment is affirmed. 
2 BILSKI v. KAPPOS 

Syllabus 

545 F. 3d 943, affirmed. 

JUSTICE KENNEDY delivered the opinion of the Court, except as to

Parts II–B–2 and II–C–2, concluding that petitioners’ claimed invention is not patent eligible. Pp. 4–8, 10–11, 12–16. 

(a) Section 101 specifies four independent categories of inventions

or discoveries that are patent eligible: “process[es],” “machin[es],”

“manufactur[es],” and “composition[s] of matter.” “In choosing such

expansive terms, . . . Congress plainly contemplated that the patent

laws would be given wide scope,” Diamond v. Chakrabarty, 447 U. S. 

303, 308, in order to ensure that “ ‘ingenuity should receive a liberal 

encouragement,’ ” id., at 308–309. This Court’s precedents provide

three specific exceptions to §101’s broad principles: “laws of nature, 

physical phenomena, and abstract ideas.” Id., at 309. While not required by the statutory text, these exceptions are consistent with the 

notion that a patentable process must be “new and useful.” And, in 

any case, the exceptions have defined the statute’s reach as a matter

of statutory stare decisis going back 150 years. See Le Roy v. 

Tatham, 14 How. 156, 174. The §101 eligibility inquiry is only a 

threshold test. Even if a claimed invention qualifies in one of the

four categories, it must also satisfy “the conditions and requirements 

of this title,” §101(a), including novelty, see §102, nonobviousness, see

§103, and a full and particular description, see §112. The invention 

at issue is claimed to be a “process,” which §100(b) defines as a “process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.” Pp. 4–5.

(b) The machine-or-transformation test is not the sole test for patent eligibility under §101. The Court’s precedents establish that although that test may be a useful and important clue or investigative

tool, it is not the sole test for deciding whether an invention is a patent-eligible “process” under §101. In holding to the contrary, the 

Federal Circuit violated two principles of statutory interpretation:

Courts “ ‘should not read into the patent laws limitations and conditions which the legislature has not expressed,’ ” Diamond v. Diehr, 

450 U. S. 175, 182, and, “[u]nless otherwise defined, ‘words will be interpreted as taking their ordinary, contemporary, common meaning,’ ” ibid. The Court is unaware of any ordinary, contemporary, 

common meaning of “process” that would require it to be tied to a

machine or the transformation of an article. Respondent Patent Director urges the Court to read §101’s other three patentable categories as confining “process” to a machine or transformation. However, 

the doctrine of noscitur a sociis is inapplicable here, for §100(b) already explicitly defines “process,” see Burgess v. United States, 553 

U. S. 124, 130, and nothing about the section’s inclusion of those 

other categories suggests that a “process” must be tied to one of them. 
Cite as: 561 U. S. ____ (2010) 3 

Syllabus 

Finally, the Federal Circuit incorrectly concluded that this Court has

endorsed the machine-or-transformation test as the exclusive test. 

Recent authorities show that the test was never intended to be exhaustive or exclusive. See, e.g., Parker v. Flook, 437 U. S. 584, 588, 

n. 9. Pp. 5–8.

(c) Section 101 similarly precludes a reading of the term “process” 

that would categorically exclude business methods. The term 

“method” within §100(b)’s “process” definition, at least as a textual

matter and before other consulting other Patent Act limitations and

this Court’s precedents, may include at least some methods of doing

business. The Court is unaware of any argument that the “ordinary,

contemporary, common meaning,” Diehr, supra, at 182, of “method” 

excludes business methods. Nor is it clear what a business method 

exception would sweep in and whether it would exclude technologies

for conducting a business more efficiently. The categorical exclusion

argument is further undermined by the fact that federal law explicitly contemplates the existence of at least some business method patents: Under §273(b)(1), if a patent-holder claims infringement based

on “a method in [a] patent,” the alleged infringer can assert a defense

of prior use. By allowing this defense, the statute itself acknowledges 

that there may be business method patents. Section 273 thus clarifies the understanding that a business method is simply one kind of

“method” that is, at least in some circumstances, eligible for patenting under §101. A contrary conclusion would violate the canon 

against interpreting any statutory provision in a manner that would 

render another provision superfluous. See Corley v. United States, 

556 U. S. ___, ___. Finally, while §273 appears to leave open the possibility of some business method patents, it does not suggest broad

patentability of such claimed inventions. Pp. 10–11. 

(d) Even though petitioners’ application is not categorically outside

of §101 under the two atextual approaches the Court rejects today,

that does not 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. Under Benson, Flook, and Diehr, however, these are not patentable processes but attempts to patent abstract ideas. Claims 1 and 4 explain the basic concept of hedging and

reduce that concept to a mathematical formula. This is an unpatentable abstract idea, just like the algorithms at issue in Benson and 

Flook. Petitioners’ remaining claims, broad examples of how hedging 

can be used in commodities and energy markets, attempt to patent 

the use of the abstract hedging idea, then instruct the use of wellknown random analysis techniques to help establish some of the inputs into the equation. They add even less to the underlying abstract 

principle than the invention held patent ineligible in Flook. Pp. 12– 
4 BILSKI v. KAPPOS 

Syllabus 

15. 

(e) Because petitioners’ patent application can be rejected under 

the Court’s precedents on the unpatentability of abstract ideas, the

Court need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in 

§100(b) and looking to the guideposts in Benson, Flook, and Diehr. 

Nothing in today’s opinion should be read as endorsing the Federal 

Circuit’s past interpretations of §101. See, e.g., State Street, 49 F. 3d, 

at 1373. The appeals court may have thought it needed to make the

machine-or-transformation test exclusive precisely because its case

law had not adequately identified less extreme means of restricting

business method patents. In disapproving an exclusive machine-ortransformation test, this Court by no means desires to preclude the 

Federal Circuit’s development of other limiting criteria that further

the Patent Act’s purposes and are not inconsistent with its text.

P. 16. 

KENNEDY, J., delivered the opinion of the Court, except for Parts II–

B–2 and II–C–2. ROBERTS, C. J., and THOMAS and ALITO, JJ., joined the 

opinion in full, and SCALIA, J., joined except for Parts II–B–2 and II–C– 

2. STEVENS, J., filed an opinion concurring in the judgment, in which 

GINSBURG, BREYER, and SOTOMAYOR, JJ., joined. BREYER, J., filed an 

opinion concurring in the judgment, in which SCALIA, J., joined as to 

Part II. 
_________________ 

_________________ 

Cite as: 561 U. S. ____ (2010) 1 

Opinion of the Court 

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press. 

SUPREME COURT OF THE UNITED STATES 

No. 08–964 

BERNARD L. BILSKI AND RAND A. WARSAW, 

PETITIONERS v. DAVID J. KAPPOS, UNDER 

SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR, 

PATENT AND TRADEMARK OFFICE

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FEDERAL CIRCUIT

[June 28, 2010]

 JUSTICE KENNEDY delivered the opinion of the Court, 

except as to Parts II–B–2 and II–C–2.* 

The question in this case turns on whether a patent can

be issued for a claimed invention designed for the business

world. The patent application claims a procedure for 

instructing buyers and sellers how to protect against the 

risk of price fluctuations in a discrete section of the economy. Three arguments are advanced for the proposition 

that the claimed invention is outside the scope of patent

law: (1) it is not tied to a machine and does not transform

an article; (2) it involves a method of conducting business; 

and (3) it is merely an abstract idea. The Court of Appeals

ruled that the first mentioned of these, the so-called machine-or-transformation test, was the sole test to be used 

for determining the patentability of a “process” under the

Patent Act, 35 U. S. C. §101. 

—————— 

* JUSTICE SCALIA does not join Parts II–B–2 and II–C–2. 
2 BILSKI v. KAPPOS 

Opinion of the Court 

I 

Petitioners’ application seeks patent protection for a 

claimed invention that explains how buyers and sellers of 

commodities in the energy market can protect, or hedge, 

against the risk of price changes. The key claims are 

claims 1 and 4. Claim 1 describes a series of steps instructing how to hedge risk. Claim 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 risk position of said consumers; 

“(b) identifying market participants for said commodity having a counter-risk position to said consumers; and 

“(c) initiating a series of transactions between said 

commodity provider and said market participants at a

second fixed rate such that said series of market participant transactions 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 minimize the risks resulting from fluctuations in market demand for energy. For example, claim 2 claims “[t]he 

method of claim 1 wherein said commodity is energy and 

said market participants are transmission distributors.” 

Id., at 20. Some of these claims also suggest familiar 

statistical approaches to determine the inputs to use in 

claim 4’s equation. For example, claim 7 advises using 

well-known random analysis techniques to determine how 

much a seller will gain “from each transaction under each 
Cite as: 561 U. S. ____ (2010) 3 

Opinion of the Court 

historical weather pattern.” Id., at 21. 

The patent examiner rejected petitioners’ application,

explaining that it “‘is not implemented on a specific apparatus and merely manipulates [an] abstract idea and 

solves a purely mathematical problem without any limitation to a practical application, therefore, the invention is 

not directed to the technological arts.’” App. to Pet. for 

Cert. 148a. The Board of Patent Appeals and Interferences affirmed, concluding that the application involved

only mental steps that do not transform physical matter

and was directed to an abstract idea. Id., at 181a–186a. 

The United States Court of Appeals for the Federal 

Circuit heard the case en banc and affirmed. The case 

produced five different opinions. Students of patent law

would be well advised to study these scholarly opinions. 

Chief Judge Michel wrote the opinion of the court. The 

court rejected its prior test for determining whether a 

claimed invention was a patentable “process” under 

§101—whether it produces a “‘useful, concrete, and tangible result’”—as articulated in State Street Bank & Trust 

Co. v. Signature Financial Group, Inc., 149 F. 3d 1368, 

1373 (1998), and AT&T Corp. v. Excel Communications, 

Inc., 172 F. 3d 1352, 1357 (1999). See In re Bilski, 545 

F. 3d 943, 959–960, and n. 19 (CA Fed. 2008) (en banc).

The court held that “[a] claimed process is surely patenteligible under §101 if: (1) it is tied to a particular machine 

or apparatus, or (2) it transforms a particular article 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 “test 

for determining patent eligibility of a process under §101,” 

id., at 956. Applying the machine-or-transformation test, 

the court held that petitioners’ application was not patent 

eligible. Id., at 963–966. Judge Dyk wrote a separate

concurring opinion, providing historical support for the 
4 BILSKI v. KAPPOS 

Opinion of the Court 

court’s approach. Id., at 966–976. 

Three judges wrote dissenting opinions. Judge Mayer 

argued that petitioners’ application was “not eligible for 

patent protection because it is directed to a method of

conducting business.” Id., at 998. He urged the adoption

of a “technological standard for patentability.” Id., at 

1010. Judge Rader would have found petitioners’ claims 

were an unpatentable abstract idea. Id., at 1011. Only

Judge Newman disagreed with the court’s conclusion that

petitioners’ application was outside of the reach of §101. 

She did not say that the application should have been 

granted but only that the issue should be remanded for 

further proceedings to determine whether the application 

qualified as patentable under other provisions. Id., at 997. 

This Court granted certiorari. 556 U. S. ___ (2009). 

II 

A 

Section 101 defines the subject matter that may be 

patented under the Patent Act: 

“Whoever invents or discovers any new and useful 

process, machine, manufacture, or composition of

matter, or any new and useful improvement thereof, 

may obtain a patent therefor, subject to the conditions 

and requirements of this title.” 

Section 101 thus specifies four independent categories of 

inventions or discoveries that are eligible for protection: 

processes, machines, manufactures, and compositions of 

matter. “In choosing such expansive terms . . . modified by

the comprehensive ‘any,’ Congress plainly contemplated 

that the patent laws would be given wide scope.” Diamond v. Chakrabarty, 447 U. S. 303, 308 (1980). Congress

took this permissive approach to patent eligibility to ensure that “‘ingenuity should receive a liberal encouragement.’” Id., at 308–309 (quoting 5 Writings of Thomas 
Cite as: 561 U. S. ____ (2010) 5 

Opinion of the Court 

Jefferson 75–76 (H. Washington ed. 1871)). 

The Court’s precedents provide three specific exceptions 

to §101’s broad patent-eligibility principles: “laws of nature, physical phenomena, and abstract ideas.” Chakrabarty, supra, at 309. While these exceptions are not required by the statutory text, they are consistent with the

notion that a patentable process must be “new and useful.”

And, in any case, these exceptions have defined the reach

of the statute as a matter of statutory stare decisis going

back 150 years. See Le Roy v. Tatham, 14 How. 156, 174– 

175 (1853). The concepts covered by these exceptions are

“part of the storehouse of knowledge of all men . . . free to

all men and reserved exclusively to none.” Funk Brothers 

Seed Co. v. Kalo Inoculant Co., 333 U. S. 127, 130 (1948).

The §101 patent-eligibility inquiry is only a threshold 

test. Even if an invention qualifies as a process, machine,

manufacture, or composition of matter, in order to receive

the Patent Act’s protection the claimed invention must 

also satisfy “the conditions and requirements of this title.”

§101. Those requirements include that the invention be

novel, see §102, nonobvious, see §103, and fully and particularly described, see §112. 

The present case involves an invention that is claimed

to be a “process” under §101. Section 100(b) defines “process” as: 

“process, art or method, and includes a new use of a

known process, machine, manufacture, composition of

matter, or material.” 

The Court first considers two proposed categorical limitations on “process” patents under §101 that would, if 

adopted, bar petitioners’ application in the present case: 

the machine-or-transformation test and the categorical 

exclusion of business method patents. 
6 BILSKI v. KAPPOS 

Opinion of the Court 

B 

1 

Under the Court of Appeals’ formulation, an invention is

a “process” only if: “(1) it is tied to a particular machine or 

apparatus, or (2) it transforms a particular article into a 

different state or thing.” 545 F. 3d, at 954. This Court 

has “more than once cautioned that courts ‘should not read 

into the patent laws limitations and conditions which the 

legislature has not expressed.’” Diamond v. Diehr, 450 

U. S. 175, 182 (1981) (quoting Chakrabarty, supra, at 308; 

some internal quotation marks omitted). In patent law, as

in all statutory construction, “[u]nless otherwise defined, 

‘words will be interpreted as taking their ordinary, contemporary, common meaning.’” Diehr, supra, at 182 

(quoting Perrin v. United States, 444 U. S. 37, 42 (1979)). 

The Court has read the §101 term “manufacture” in accordance with dictionary definitions, see Chakrabarty, supra, 

at 308 (citing American Fruit Growers, Inc. v. Brogdex Co., 

283 U. S. 1, 11 (1931)), and approved a construction of the 

term “composition of matter” consistent with common 

usage, see Chakrabarty, supra, at 308 (citing Shell Development Co. v. Watson, 149 F. Supp. 279, 280 (DC 1957)). 

Any suggestion in this Court’s case law that the Patent 

Act’s terms deviate from their ordinary meaning has only 

been an explanation for the exceptions for laws of nature,

physical phenomena, and abstract ideas. See Parker v. 

Flook, 437 U. S. 584, 588–589 (1978). This Court has not 

indicated that the existence of these well-established 

exceptions gives the Judiciary carte blanche to impose

other limitations that are inconsistent with the text and 

the statute’s purpose and design. Concerns about attempts to call any form of human activity a “process” can 

be met by making sure the claim meets the requirements

of §101.

Adopting the machine-or-transformation test as the sole 
Cite as: 561 U. S. ____ (2010) 7 

Opinion of the Court 

test for what constitutes a “process” (as opposed to just an

important and useful clue) violates these statutory interpretation principles. Section 100(b) provides that “[t]he

term ‘process’ means process, art or method, and includes 

a new use of a known process, machine, manufacture, 

composition of matter, or material.” The Court is unaware 

of any “‘ordinary, contemporary, common meaning,’” 

Diehr, supra, 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 patentable categories in §101—

machines, manufactures, and compositions of matter—to

confine the meaning of “process” to a machine or transformation, under the doctrine of noscitur a sociis. Under 

this canon, “an ambiguous term may be given more precise 

content by the neighboring words with which it is associated.” United States v. Stevens, 559 U. S. ___, ___ (2010) 

(slip op., at 12) (internal quotation marks omitted). This 

canon is inapplicable here, for §100(b) already explicitly

defines the term “process.” See Burgess v. United States, 

553 U. S. 124, 130 (2008) (“When a statute includes an 

explicit definition, we must follow that definition” (internal quotation marks omitted)).

The Court of Appeals incorrectly concluded that this

Court has endorsed the machine-or-transformation test as 

the exclusive test. It is true that Cochrane v. Deener, 94 

U. S. 780, 788 (1877), explained that a “process” is “an act, 

or a series of acts, performed upon the subject-matter to be 

transformed and reduced to a different state or thing.”

More recent cases, however, have rejected the broad implications of this dictum; and, in all events, later authority

shows that it was not intended to be an exhaustive or 

exclusive test. Gottschalk v. Benson, 409 U. S. 63, 70 

(1972), noted that “[t]ransformation and reduction of an

article ‘to a different state or thing’ is the clue to the pat-
Opinion of the Court 

8 BILSKI v. KAPPOS 

Opinion of KENNEDY, J. 

entability of a process claim that does not include particular machines.” At the same time, it explicitly declined to

“hold that no process patent could ever qualify if it did not

meet [machine or transformation] requirements.” Id., at 

71. Flook took a similar approach, “assum[ing] that a

valid process 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-ortransformation test is a useful and important clue, an

investigative tool, for determining whether some claimed 

inventions are processes under §101. The machine-ortransformation test is not the sole test for deciding

whether an invention is a patent-eligible “process.” 

2 

It is true that patents for inventions that did not satisfy

the machine-or-transformation test were rarely granted in 

earlier eras, especially in the Industrial Age, as explained 

by Judge Dyk’s thoughtful historical review. See 545 

F. 3d, at 966–976 (concurring opinion). But times change.

Technology and other innovations progress in unexpected 

ways. For example, it was once forcefully argued that 

until recent times, “well-established principles of patent

law probably would have prevented the issuance of a valid 

patent on almost any conceivable computer program.” 

Diehr, 450 U. S., at 195 (STEVENS, J., dissenting). But 

this fact does not mean that unforeseen innovations such 

as computer programs are always unpatentable. See id., 

at 192–193 (majority opinion) (holding a procedure for 

molding rubber that included a computer program is

within patentable subject matter). Section 101 is a “dynamic provision designed to encompass new and unforeseen inventions.” J. E. M. Ag Supply, Inc. v. Pioneer HiBred Int’l, Inc., 534 U. S. 124, 135 (2001). A categorical

rule denying patent protection for “inventions in areas not 
Opinion of the Court 

Cite as: 561 U. S. ____ (2010) 9 

Opinion of KENNEDY, J. 

contemplated by Congress . . . would frustrate the purposes of the patent law.” Chakrabarty, 447 U. S., at 315. 

The machine-or-transformation test may well provide a 

sufficient basis for evaluating processes similar to those in

the Industrial Age—for example, inventions grounded in a

physical or other tangible form. But there are reasons to 

doubt whether the test should be the sole criterion for 

determining the patentability of inventions in the Information Age. As numerous amicus briefs argue, the machine-or-transformation test would create uncertainty as

to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital 

signals. See, e.g., Brief for Business Software Alliance 24– 

25; Brief for Biotechnology Industry Organization et al. 

14–27; Brief for Boston Patent Law Association 8–15; 

Brief for Houston Intellectual Property Law Association 

17–22; Brief for Dolby Labs., Inc., et al. 9–10.

In the course of applying the machine-or-transformation

test to emerging technologies, courts may pose questions

of such intricacy and refinement that they risk obscuring

the larger object of securing patents for valuable inventions without transgressing the public domain. The dissent by Judge Rader refers to some of these difficulties. 

545 F. 3d, at 1015. As a result, in deciding whether previously unforeseen inventions qualify as patentable “process[es],” it may not make sense to require courts to confine 

themselves to asking the questions posed by the machineor-transformation test. Section 101’s terms suggest that

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 the Court 

tion, let alone holding that any of the above-mentioned 

technologies from the Information Age should or should

not receive patent protection. This Age puts the possibility of innovation in the hands of more people and raises

new difficulties for the patent law. With ever more people 

trying to innovate and thus seeking patent protections for

their inventions, the patent law faces a great challenge in

striking the balance between protecting inventors and not 

granting monopolies over procedures that others would 

discover by independent, creative application of general

principles. Nothing in this opinion should be read to take

a position on where that balance ought to be struck. 

C 

1 

Section 101 similarly precludes the broad contention

that the term “process” categorically excludes business

methods. The term “method,” which is within §100(b)’s

definition of “process,” at least as a textual matter and

before consulting other limitations in the Patent Act and 

this Court’s precedents, may include at least some methods of doing business. See, e.g., Webster’s New International Dictionary 1548 (2d ed. 1954) (defining “method” as

“[a]n orderly procedure or process . . . regular way or 

manner of doing anything; hence, a set form of procedure

adopted in investigation or instruction”). The Court is 

unaware of any argument that the “‘ordinary, contemporary, common meaning,’” Diehr, supra, at 182, of “method” 

excludes business methods. Nor is it clear how far a prohibition on business method patents would reach, and 

whether it would exclude technologies for conducting a 

business more efficiently. See, e.g., Hall, Business and 

Financial Method Patents, Innovation, and Policy, 56 

Scottish J. Pol. Econ. 443, 445 (2009) (“There is no precise 

definition of . . . business method patents”).

The argument that business methods are categorically 
Opinion of the Court 

Cite as: 561 U. S. ____ (2010) 11 

Opinion of KENNEDY, J. 

outside of §101’s scope is further undermined by the fact 

that federal law explicitly contemplates the existence of at 

least some business method patents. Under 35 U. S. C. 

§273(b)(1), if a patent-holder claims infringement based on

“a method in [a] patent,” the alleged infringer can assert a

defense of prior use. For purposes of this defense alone, 

“method” is defined as “a method of doing or conducting

business.” §273(a)(3). In other words, by allowing this 

defense the statute itself acknowledges that there may be

business method patents. Section 273’s definition of 

“method,” to be sure, cannot change the meaning of a 

prior-enacted statute. But what §273 does is clarify the 

understanding that a business method is simply one kind

of “method” that is, at least in some circumstances, eligible 

for patenting under §101.

A conclusion that business methods are not patentable 

in any circumstances would render §273 meaningless.

This would violate the canon against interpreting any 

statutory provision in a manner that would render another provision superfluous. See Corley v. United States, 

556 U. S. ___, ___ (2009) (slip op., at 9). This principle, of 

course, applies to interpreting any two provisions in the 

U. S. Code, even when Congress enacted the provisions at

different times. See, e.g., Hague v. Committee for Industrial Organization, 307 U. S. 496, 529–530 (1939) (opinion 

of Stone, J.). This established rule of statutory interpretation cannot be overcome by judicial speculation as to the 

subjective intent of various legislators in enacting the

subsequent provision. Finally, while §273 appears to 

leave open the possibility of some business method patents, it does not suggest broad patentability of such 

claimed inventions. 

2 

Interpreting §101 to exclude all business methods simply because business method patents were rarely issued 
Opinion of the Court 

12 BILSKI v. KAPPOS 

Opinion of KENNEDY, J. 

until modern times revives many of the previously discussed difficulties. See supra, at 8–9. At the same time, 

some business method patents raise special problems in 

terms of vagueness and suspect validity. See eBay Inc. v. 

MercExchange, L. L. C., 547 U. S. 388, 397 (2006)

(KENNEDY, J., concurring). The Information Age empowers people with new capacities to perform statistical

analyses and mathematical calculations with a speed and 

sophistication that enable the design of protocols for more

efficient performance of a vast number of business tasks. 

If a high enough bar is not set when considering patent 

applications of this sort, patent examiners and courts 

could be flooded with claims that would put a chill on 

creative endeavor and dynamic change. 

In searching for a limiting principle, this Court’s precedents on the unpatentability of abstract ideas provide

useful tools. See infra, at 12–15. Indeed, if the Court of 

Appeals were to succeed in defining a narrower category 

or class of patent applications that claim to instruct how 

business should be conducted, and then rule that the 

category is unpatentable because, for instance, it represents an attempt to patent abstract ideas, this conclusion 

might well be in accord with controlling precedent. See 

ibid. But beyond this or some other limitation consistent

with the statutory text, the Patent Act leaves open the

possibility that there are at least some processes that can 

be fairly described as business methods that are within

patentable subject matter under §101.

Finally, even if a particular business method fits into 

the statutory definition of a “process,” that does not mean

that the application claiming that method should be 

granted. In order to receive patent protection, any

claimed invention must be novel, §102, nonobvious, §103,

and fully and particularly described, §112. These limitations serve a critical role in adjusting the tension, ever 
Cite as: 561 U. S. ____ (2010) 13 

Opinion of the Court 

present in patent law, between stimulating innovation by 

protecting inventors and impeding progress by granting

patents when not justified by the statutory design. 

III 

Even though petitioners’ application is not categorically

outside of §101 under the two broad and atextual approaches the Court rejects today, that does not 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. Rather than 

adopting categorical rules that might have wide-ranging

and unforeseen impacts, the Court resolves this case

narrowly on the basis of this Court’s decisions in Benson, 

Flook, and Diehr, which show that petitioners’ claims are

not patentable processes because they are attempts to

patent abstract ideas. Indeed, all members of the Court 

agree that the patent application at issue here falls outside of §101 because it claims an abstract idea. 

In Benson, the Court considered whether a patent application for an algorithm to convert binary-coded decimal 

numerals into pure binary code was a “process” under 

§101. 409 U. S., at 64–67. The Court first explained that 

“‘[a] principle, in the abstract, is a fundamental truth; an

original cause; a motive; these cannot be patented, as no

one can claim in either 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,” but an unpatentable abstract idea. “It is conceded that one may not

patent an idea. But in practical effect that would be the

result if the formula for converting . . . numerals to pure

binary numerals were patented in this case.” 409 U. S., at 

71. A contrary holding “would wholly pre-empt the 

mathematical formula and in practical effect would be a

patent on the algorithm itself.” Id., at 72. 

In Flook, the Court considered the next logical step after 
14 BILSKI v. KAPPOS 

Opinion of the Court 

Benson. The applicant there attempted to patent a procedure for monitoring the conditions during the catalytic

conversion process in the petrochemical and oil-refining

industries. The application’s only innovation was reliance

on a mathematical algorithm. 437 U. S., at 585–586. 

Flook held the invention was not a patentable “process.” 

The Court conceded the invention at issue, unlike the 

algorithm in Benson, had been limited so that it could still 

be freely used outside the petrochemical and oil-refining 

industries. 437 U. S., at 589–590. Nevertheless, Flook 

rejected “[t]he notion that post-solution activity, no matter 

how conventional or obvious in itself, can transform an 

unpatentable principle into a patentable process.” Id., at 

590. The Court concluded that the process at issue there 

was “unpatentable under §101, not because it contain[ed] 

a mathematical algorithm as one component, but because 

once that algorithm [wa]s assumed to be within the prior

art, the application, considered as a whole, contain[ed] no 

patentable invention.” Id., at 594. As the Court later 

explained, Flook stands for the proposition that the prohibition against patenting abstract ideas “cannot be circumvented by attempting to limit the use of the formula to a 

particular technological environment” or adding “insignificant postsolution activity.” Diehr, 450 U. S., at 191–192. 

 Finally, in Diehr, the Court established a limitation on 

the principles articulated in Benson and Flook. The application in Diehr claimed a previously unknown method for 

“molding raw, uncured synthetic rubber into cured precision products,” using a mathematical formula to complete 

some of its several steps by way of a computer. 450 U. S., 

at 177. Diehr explained that while an abstract idea, law of

nature, or mathematical formula could not be patented,

“an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” Id., at 187. Diehr emphasized 
Cite as: 561 U. S. ____ (2010) 15 

Opinion of the Court 

the need to consider the invention as a whole, rather than 

“dissect[ing] the claims into old and new elements and 

then . . . ignor[ing] the presence of the old elements in the

analysis.” Id., at 188. Finally, the Court concluded that 

because the claim was not “an attempt to patent a

mathematical formula, but rather [was] an industrial

process for the molding of rubber products,” it fell within

§101’s patentable subject matter. Id., at 192–193. 

In light of these precedents, it is clear that petitioners’ 

application is not a patentable “process.” Claims 1 and 4 

in petitioners’ application explain the basic concept of 

hedging, or protecting against risk: “Hedging is a fundamental economic practice long prevalent in our system of 

commerce and taught in any introductory finance class.” 

545 F. 3d, at 1013 (Rader, J., dissenting); see, e.g., D. 

Chorafas, Introduction to Derivative Financial Instruments 75–94 (2008); C. Stickney, R. Weil, K. Schipper, & 

J. Francis, Financial Accounting: An Introduction to Concepts, Methods, and Uses 581–582 (13th ed. 2010); S.

Ross, R. Westerfield, & B. Jordan, Fundamentals of Corporate Finance 743–744 (8th ed. 2008). The concept of

hedging, described in claim 1 and reduced to a mathematical formula in claim 4, is an unpatentable abstract idea,

just like the algorithms at issue in Benson and Flook. 

Allowing petitioners to patent risk hedging would preempt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea. 

Petitioners’ remaining claims are broad examples of how 

hedging can be used in commodities and energy markets. 

Flook established that limiting an abstract idea to one 

field of use or adding token postsolution components did 

not make the concept patentable. That is exactly what the 

remaining claims in petitioners’ application do. These 

claims attempt to patent the use of the abstract idea of

hedging risk in the energy market and then instruct the 
16 BILSKI v. KAPPOS 

Opinion of the Court 

use of well-known random analysis techniques to help 

establish some of the inputs into the equation. Indeed, 

these claims add even less to the underlying abstract

principle than the invention in Flook did, for the Flook 

invention was at least directed to the narrower domain of 

signaling dangers in operating a catalytic converter. 

* * * 

Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act’s 

text. The patent application here can be rejected under

our precedents on the unpatentability of abstract ideas.

The Court, therefore, need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in §100(b) and looking to the 

guideposts in Benson, Flook, and Diehr. 

And nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for

the Federal Circuit has used in the past. See, e.g., State 

Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357. 

It may be that the Court of Appeals thought it needed to

make the machine-or-transformation test exclusive precisely because its case law had not adequately identified

less extreme means of restricting business method patents, including (but not limited to) application of our 

opinions in Benson, Flook, and Diehr. In disapproving an

exclusive machine-or-transformation test, we by no means

foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act

and are not inconsistent with its text. 

The judgment of the Court of Appeals is affirmed. 

It is so ordered. 
_________________ 

_________________ 

Cite as: 561 U. S. ____ (2010) 1 

STEVENS, J., concurring in judgment 

SUPREME COURT OF THE UNITED STATES 

No. 08–964 

BERNARD L. BILSKI AND RAND A. WARSAW, 

PETITIONERS v. DAVID J. KAPPOS, UNDER 

SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR, 

PATENT AND TRADEMARK OFFICE

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FEDERAL CIRCUIT

[June 28, 2010] 

JUSTICE STEVENS, with whom JUSTICE GINSBURG, 

JUSTICE BREYER, and JUSTICE SOTOMAYOR join, concurring in the judgment. 

In the area of patents, it is especially important that the

law remain stable and clear. The only question presented 

in this case is whether the so-called machine-ortransformation test is the exclusive test for what constitutes a patentable “process” under 35 U. S. C. §101. It 

would be possible to answer that question simply by holding, as the entire Court agrees, that although the machine-or-transformation test is reliable in most cases, it is 

not the exclusive test. 

I agree with the Court that, in light of the uncertainty

that currently pervades this field, it is prudent to provide 

further guidance. But I would take a different approach.

Rather than making any broad statements about how to

define the term “process” in §101 or tinkering with the

bounds of the category of unpatentable, abstract ideas, I

would restore patent law to its historical and constitutional moorings. 

For centuries, it was considered well established that a 

series of steps for conducting business was not, in itself, 
2 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

patentable. In the late 1990’s, the Federal Circuit and 

others called this proposition into question. Congress

quickly responded to a Federal Circuit decision with a

stopgap measure designed to limit a potentially significant 

new problem for the business community. It passed the

First Inventors Defense Act of 1999 (1999 Act), 113 Stat.

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 doing or conducting business,” 

§273(a)(3). Following several more years of confusion, the

Federal Circuit changed course, overruling recent decisions and holding that a series of steps may constitute a

patentable process only if it is tied to a machine or transforms an article into a different state or thing. This “machine-or-transformation test” excluded general methods of 

doing business as well as, potentially, a variety of other 

subjects that could be called processes. 

The Court correctly holds that the machine-ortransformation test is not the sole test for what constitutes 

a patentable process; rather, it is a critical clue.1 But the 

Court is quite wrong, in my view, to suggest that any

series of steps that is not itself an abstract 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 mischief. The wiser course would have 

been to hold that petitioners’ method is not a “process” 

because it describes only a general method of engaging in 

business transactions—and business methods are not 

patentable. More precisely, although a process is not 

patent-ineligible simply because it is useful for conducting

business, a claim that merely describes a method of doing 

—————— 

1Even if the machine-or-transformation test may not define the scope 

of a patentable process, it would be a grave mistake to assume that

anything with a “ ‘useful, concrete and tangible result,’ ” State Street 

Bank & Trust v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373 

(CA Fed. 1998), may be patented. 
Cite as: 561 U. S. ____ (2010) 3 

STEVENS, J., concurring in judgment 

business does not qualify as a “process” under §101. 

I 

Although the Court provides a brief statement of facts, 

ante, at 1–4, a more complete explication may be useful for 

those unfamiliar with petitioners’ patent application and

this case’s procedural history.

Petitioners’ patent application describes a series of steps

for managing risk amongst buyers and sellers of commodities. The general method, described in Claim 1, entails 

“managing the consumption risk costs of a commodity sold 

by a commodity provider at a fixed price,” and 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 risk position of said 

consumers; 

“(b) identifying market participants for said commodity having a counter-risk position to said consumers; and 

“(c) initiating a series of transactions between said 

commodity provider and said market participants at a

second fixed rate such that said series of market participant transactions 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 for any commodity to manage consumption risk in a fixed bill price product,” id., at 11, it 

includes specific applications of the method, particularly 

in the field of energy, as a means of enabling suppliers and 

consumers to minimize the risks resulting from fluctuations in demand during specified time periods. See id., at 

20–22. Energy suppliers and consumers may use that 
4 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

method to hedge their risks by agreeing upon a fixed

series of payments at regular intervals throughout the

year instead of charging or paying prices that fluctuate in 

response to changing weather conditions. The patent

application describes a series of steps, including the

evaluation of historical costs and weather variables and 

the use of economic and statistical formulas, to analyze 

these data and to estimate the likelihood of certain outcomes. See id., at 12–19. 

The patent examiner rejected petitioners’ application on 

the ground that it “is not directed to the technological 

arts,” insofar as it “is not implemented on a specific apparatus and merely manipulates [an] abstract idea and 

solves a purely mathematical problem without any limitation to a practical application.” App. to Pet. for Cert. 148a.

The Board of Patent Appeals and Interferences (Board) 

affirmed the examiner’s decision, but it rejected the position that a patentable process must relate to “technological arts” or be performed on a machine. Id., at 180a–181a. 

Instead, the Board denied petitioners’ patent on two alternative, although similar, grounds: first, that the patent

involves only mental steps that do not transform physical

subject matter, id., at 181a–184a; and, second, that it is 

directed to an “abstract idea,” id., at 184a–187a. 

Petitioners appealed to the United States Court of Appeals for the Federal Circuit. After briefing and argument

before a three-judge panel, the court sua sponte decided to 

hear the case en banc and ordered the parties to address:

(1) whether petitioners’ “claim 1 . . . claims patent-eligible 

subject matter under 35 U. S. C. §101”; (2) “[w]hat standard should govern in determining whether a process is

patent-eligible subject matter”; (3) “[w]hether the claimed

subject matter is not patent-eligible because it constitutes 

an abstract idea or mental process”; (4) “[w]hether a 

method or process must result in a physical transformation of an article or be tied to a machine to be patent-
Cite as: 561 U. S. ____ (2010) 5 

STEVENS, J., concurring in judgment 

eligible subject matter”; and (5) whether the court’s decisions in State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F. 3d 1368 (1998) (State Street), and 

AT&T Corp. v. Excel Communications, Inc., 172 F. 3d 

1352 (1999), should be overruled in any respect. App. to

Pet. for Cert. 144a–145a. 

The en banc Court of Appeals affirmed the Board’s

decision. Eleven of the twelve judges agreed that petitioners’ claims do not describe a patentable “process,” §101. 

Chief Judge Michel’s opinion, joined by eight other judges,

rejected several possible tests for what is a patent-eligible 

process, including whether the patent produces a “‘useful,

concrete and tangible result,’” whether the process relates 

to “technological arts,” and “categorical exclusions” for

certain processes such as business methods. In re Bilski, 

545 F. 3d 943, 959–960 (2008). Relying on several of our 

cases in which we explained how to differentiate a claim

on a “fundamental principle” from a claim on a “process,”

the court concluded that a “claimed process is surely patent-eligible under §101 if: (1) it is tied to a particular 

machine or apparatus, or (2) it transforms a particular 

article into a different state or thing.” Id., at 954–955. 

The court further concluded that this “machine-ortransformation test” is “the sole test governing §101 

analyses,” id., at 955 (emphasis added), and therefore the 

“test for determining patent eligibility of a process under 

§101,” id., at 956. Applying that test, the court held that 

petitioners’ claim is not a patent-eligible process. Id., at 

963–966. 

In a separate opinion reaching the same conclusion, 

Judge Dyk carefully reviewed the history of American

patent law and English precedents upon which our law is

based, and found that “the unpatentability of processes

not involving manufactures, machines, or compositions of 

matter has been firmly embedded . . . since the time of the

Patent Act of 1793.” Id., at 966. Judge Dyk observed, 
6 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

moreover, that “[t]here is no suggestion in any of this early 

consideration of process patents that processes for organizing human activity were or ever had been patentable.” 

Id., at 972. 

Three judges wrote dissenting opinions, although two of 

those judges agreed that petitioners’ claim is not patent

eligible. Judge Mayer would have held that petitioners’ 

claim “is not eligible for patent protection because it is 

directed to a method of conducting business.” Id., at 998. 

He submitted that “[t]he patent system is intended to

protect and promote advances in science and technology, 

not ideas about how to structure commercial transactions.” Ibid. “Affording patent protection to business

methods lacks constitutional and statutory support, serves

to hinder rather than promote innovation[,] and usurps

that which rightfully belongs in the public domain.” Ibid. 

Judge Rader would have rejected petitioners’ claim on 

the ground that it seeks to patent merely an abstract idea. 

Id., at 1011. 

Only Judge Newman disagreed with the court’s conclusion that petitioners’ claim seeks a patent on ineligible

subject matter. Judge Newman urged that the en banc 

court’s machine-or-transformation test ignores the text 

and history of §101, id., at 977–978, 985–990, is in tension 

with several of decisions by this Court, id., at 978–985, 

and the Federal Circuit, id., at 990–992, and will invalidate thousands of patents that were issued in reliance on 

those decisions, id., at 992–994. 

II 

Before explaining in more 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 misunderstood, could result in confusion or upset settled 

areas of the law. Three preliminary observations may be 

clarifying. 
Cite as: 561 U. S. ____ (2010) 7 

STEVENS, J., concurring in judgment 

First, the Court suggests that the terms in the Patent

Act must be read as lay speakers use those terms, and not

as they have traditionally been understood in the context

of patent law. See, e.g., ante, at 6 (terms in §101 must be

viewed in light of their “‘ordinary, contemporary, common

meaning’”); ante, at 10 (patentable “method” is any “orderly procedure or process,” “regular way or manner of 

doing anything,” or “set form of procedure adopted in 

investigation or instruction” (internal quotation marks

omitted)). As I will explain at more length in Part III, 

infra, if this portion of the Court’s opinion were taken 

literally, the results would be absurd: Anything that constitutes a series of steps would be patentable so long as it 

is novel, nonobvious, and described with specificity. But 

the opinion cannot be taken literally on this point. The 

Court makes this clear when it accepts that the “atextual”

machine-or-transformation test, ante, at 12, is “useful and 

important,” ante, at 8, even though it “violates” the stated 

“statutory interpretation principles,” ante, at 6; and when 

the Court excludes processes that tend to pre-empt commonly used ideas, see ante, at 14–15. 

Second, in the process of addressing the sole issue 

presented to us, the opinion uses some language that 

seems inconsistent with our centuries-old reliance on the 

machine-or-transformation criteria as clues to patentability. Most notably, the opinion for a plurality suggests

that these criteria may operate differently when addressing technologies of a recent vintage. See ante, at 8–9 

(machine-or-transformation test is useful “for evaluating

processes similar to those in the Industrial Age,” but is

less useful “for determining the patentability of inventions

in the Information Age”). In moments of caution, however, 

the opinion for the Court explains—correctly—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 machine-or-transformation test is a useful and 
8 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

important clue, an investigative tool, for determining 

whether some claimed inventions are processes under 

§101”). Notwithstanding this internal tension, I understand the Court’s opinion to hold only that the machine-ortransformation test remains an important test for patentability. Few, if any, processes cannot effectively be 

evaluated using these criteria.

Third, in its discussion of an issue not contained in the 

questions presented—whether the particular series of 

steps in petitioners’ application is an abstract idea—the

Court uses language that could suggest a shift in our 

approach to that issue. Although I happen to agree that

petitioners seek to patent an abstract idea, the Court does

not show how this conclusion follows “clear[ly],” ante, at 

15, from our case law. The patent now before us is not for 

“[a] principle, in the abstract,” or a “fundamental truth.” 

Parker v. Flook, 437 U. S. 584, 589 (1978) (internal quotation marks omitted). Nor does it claim the sort of phenomenon of nature or abstract idea that was embodied by

the mathematical formula at issue in Gottschalk v. Benson, 409 U. S. 63, 67 (1972), and in Flook. 

The Court construes petitioners’ claims on processes for 

pricing as claims on “the basic concept of hedging, or

protecting against risk,” ante, at 14, and thus discounts 

the application’s discussion of what sorts of data to use,

and how to analyze those data, as mere “token postsolution components,” ante, at 15. In other words, the Court 

artificially limits petitioners’ claims to hedging, and then

concludes that hedging is an abstract idea rather than a

term that describes a category of processes including 

petitioners’ claims. Why the Court does this is never 

made clear. One might think that the Court’s analysis

means that any process that utilizes an abstract idea is 

itself an unpatentable, abstract idea. But we have never 

suggested any such rule, which would undermine a host of 

patentable processes. It is true, as the Court observes, 
Cite as: 561 U. S. ____ (2010) 9 

STEVENS, J., concurring in judgment 

that petitioners’ application is phrased broadly. See ante, 

at 14–15. But claim specification is covered by §112, not 

§101; and if a series of steps constituted an unpatentable

idea merely because it was described without sufficient

specificity, the Court could be calling into question some of 

our own prior decisions.2 At points, the opinion suggests 

that novelty is the clue. See ante, at 14. But the fact that 

hedging is “‘long prevalent in our system of commerce,’” 

ibid., cannot justify the Court’s conclusion, as “the proper 

construction of §101 . . . does not involve the familiar 

issu[e] of novelty” that arises under §102. Flook, 437 

U. S., at 588. At other points, the opinion for a plurality

suggests that the analysis turns on the category of patent 

involved. See, e.g., ante, at 12 (courts should use the

abstract-idea rule as a “too[l]” to set “a high enough bar”

“when considering patent applications of this sort”). But 

we have never in the past suggested that the inquiry

varies by subject matter. 

The Court, in sum, never provides a satisfying account

of what constitutes an unpatentable abstract idea. Indeed, the Court does not even explain if it is using the

machine-or-transformation criteria. The Court essentially

asserts its conclusion that petitioners’ application claims 

an abstract idea. This mode of analysis (or lack thereof) 

may have led to the correct outcome in this case, but it

also means that the Court’s musings on this issue stand 

for very little. 

—————— 

2For example, a rule that broadly-phrased claims cannot constitute 

patentable processes could call into question our approval of Alexander 

Graham Bell’s famous fifth claim on “ ‘[t]he method of, and apparatus

for, transmitting vocal or other sounds telegraphically, as herein 

described, by causing electrical undulations, similar in form to the 

vibrations of the air accompanying the said vocal or other sounds,

substantially as set forth,’ ” The Telephone Cases, 126 U. S. 1, 531 

(1888). 
10 BILSKI v. KAPPOS

STEVENS, J., concurring in judgment 

III 

I agree with the Court that the text of §101 must be the

starting point of our analysis. As I shall explain, however,

the text must not be the end point as well. 

Pursuant to its power “[t]o promote the Progress of . . .

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

the exclusive Right to their . . . Discoveries,” U. S. Const.,

Art. I, §8, cl. 8, Congress has passed a series of patent

laws that grant certain exclusive rights over certain inventions and discoveries as a means of encouraging innovation. In the latest iteration, the Patent Act of 1952 

(1952 Act), Congress has provided that “[w]hoever invents

or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful

improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title,” 35 

U. S. C. §101, which include that the patent also be novel, 

§102, and nonobvious, §103. The statute thus authorizes 

four categories of subject matter that may be patented:

processes, machines, manufactures, and compositions of 

matter. Section 101 imposes a threshold condition. “[N]o

patent is available for a discovery, however useful, novel, 

and nonobvious, unless it falls within one of the express 

categories of patentable subject matter.” Kewanee Oil Co. 

v. Bicron Corp., 416 U. S. 470, 483 (1974).

Section 101 undoubtedly defines in “expansive terms”

the subject matter eligible for patent protection, as the 

statute was meant to ensure that “‘ingenuit[ies] receive a

liberal encouragement.’” Diamond v. Chakrabarty, 447 

U. S. 303, 308–309 (1980); see also J. E. M. Ag Supply, 

Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U. S. 124, 130 

(2001). Nonetheless, not every new invention or discovery 

may be patented. Certain things are “free for all to use.” 

Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 
Cite as: 561 U. S. ____ (2010) 11 

STEVENS, J., concurring in judgment 

141, 151 (1989).3 

The text of the Patent Act does not on its face give much

guidance about what constitutes a patentable process.

The statute defines the term “process” as a “process, art or

method [that] includes a new use of a known process,

machine, manufacture, composition of matter, or material.” §100(b). But, this definition is not especially helpful, given that it also uses the term “process” and is therefore somewhat circular. 

As lay speakers use the word “process,” it constitutes

any series of steps. But it has always been clear that, as

used in §101, the term does not refer to a “‘process’ in the 

ordinary sense of the word,” Flook, 437 U. S., at 588; see 

also Corning v. Burden, 15 How. 252, 268 (1854) (“[T]he 

term process is often used in a more vague sense, in which 

it cannot be the subject of a patent”). Rather, as discussed 

in some detail in Part IV, infra, the term “process” (along

with the definitions given to that term) has long accumulated a distinctive meaning in patent law. When the term 

was used in the 1952 Patent Act, it was neither intended 

nor understood to encompass any series of steps or any 

way to do any thing. 

With that understanding in mind, the Government has 

—————— 

3The Court quotes our decision in Diamond v. Chakrabarty, 447 U. S. 

303 (1980), for the proposition that, “ ‘[i]n choosing such expansive 

terms . . . modified by the comprehensive “any,” Congress plainly

contemplated that the patent laws would be given wide scope.’ ” Ante, 

at 4. But the Court fails to mention which terms we were discussing in 

Chakrabarty: the terms “manufacture” and “composition of matter.”

See 447 U. S., at 308 (“In choosing such expansive terms as ‘manufacture’ and ‘composition of matter,’ modified by the comprehensive ‘any,’ 

Congress plainly contemplated that the patent laws would be given 

wide scope”). As discussed herein, Congress’ choice of the term “process” reflected a background understanding of what sorts of series of

steps could be patented, and likely reflected an intentional design to

codify that settled, judicial understanding. This may not have been the 

case with the terms at issue in Chakrabarty. 
12 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

argued that because “a word” in a statute “is given more 

precise content by the neighboring words with which it” 

associates, United States v. Williams, 553 U. S. 285, 294 

(2008), we may draw inferences from the fact that “[t]he

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. Specifically, the Government submits, we may infer “that the 

term ‘process’ is limited to technological and industrial 

methods.” Ibid. The Court rejects this submission categorically, on the ground that “§100(b) already explicitly 

defines the term ‘process.’” Ante, at 6. But §100(b) defines the term “process” 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 Government’s and the Court’s positions: The terms adjacent to

“process” in §101 provide a clue as to its meaning, although not a very strong clue. Section 101’s list of categories of patentable subject matter is phrased in the disjunctive, suggesting that the term “process” has content 

distinct from the other items in the list. It would 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 extent we can draw inferences 

about what is a “process” from common attributes in §101, 

it is a dangerous endeavor to do so on the basis of a perceived overarching theme. Given the many moving parts 

at work in the Patent Act, there is a risk of merely confirming our preconceived notions of what should be patentable or of seeing common attributes that track “the 

familiar issues of novelty and obviousness” that arise 
Cite as: 561 U. S. ____ (2010) 13 

STEVENS, J., concurring in judgment 

under other sections of the statute but are not relevant to 

§101, Flook, 437 U. S., at 588. The placement of “process” 

next to other items thus cannot prove that the term is

limited to any particular categories; it does, however, give 

reason to be skeptical that the scope of a patentable “process” extends to cover any series of steps at all. 

The Court makes a more serious interpretive error. As 

briefly discussed in Part II, supra, the Court at points 

appears to reject the well-settled proposition that the term

“process” in §101 is not a “‘process’ in the ordinary sense 

of the word,” Flook, 437 U. S., at 588. Instead, the Court 

posits that the word “process” must be understood in light 

of its “ordinary, contemporary, common meaning,” ante, at 

6 (internal quotation marks omitted). Although this is a

fine approach to statutory interpretation in general, it is a

deeply flawed approach to a statute that relies on complex 

terms of art developed against a particular historical

background.4 Indeed, the approach would render §101 

almost comical. A process for training a dog, a series of 

dance steps, a method of shooting a basketball, maybe

even words, stories, or songs if framed as the steps of

typing letters or uttering sounds—all would be patenteligible. I am confident that the term “process” in §101 is

not nearly so capacious.5 

—————— 

4For example, if this Court were to interpret the Sherman Act according to the Act’s plain text, it could prohibit “the entire body of private

contract,” National Soc. of Professional Engineers v. United States, 435 

U. S. 679, 688 (1978). 5The Court attempts to avoid such absurd results by stating that

these “[c]oncerns” “can be met by making sure that the claim meets the

requirements of §101.” Ante, at 6. Because the only limitation on the

plain meaning of “process” that the Court acknowledges explicitly is the

bar on abstract ideas, laws of nature, and the like, it is presumably this

limitation that is left to stand between all conceivable human activity

and patent monopolies. But many processes that would make for

absurd patents are not abstract ideas. Nor can the requirements of

novelty, nonobviousness, and particular description pick up the slack. 
14 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

So is the Court, perhaps. What is particularly incredible about the Court’s stated method of interpreting §101 

(other than that the method itself may be patent-eligible 

under the Court’s theory of §101) is that the Court deviates from its own professed commitment to “ordinary,

contemporary, common meaning.” As noted earlier, the 

Court accepts a role for the “atextual” machine-ortransformation “clue.” Ante, at 12, 7. The Court also 

accepts that we have “foreclose[d] a purely literal reading

of §101,” Flook, 437 U. S., at 589, by holding that claims

that are close to “laws of nature, natural phenomena, and 

abstract ideas,” Diamond v. Diehr, 450 U. S. 175, 185 

(1981), do not count as “processes” under §101, even if 

they can be colloquially described as such.6 The Court 

attempts to justify this latter exception to §101 as “a 

matter of statutory stare decisis.” Ante, at 5. But it is 

strange to think that the very same term must be interpreted literally on some occasions, and in light of its historical usage on others.

In fact, the Court’s understanding of §101 is even more 

remarkable because its willingness to exclude general

principles from the provision’s reach is in tension with its 

apparent willingness to include steps for conducting business. The history of patent law contains strong norms 

against patenting these two categories of subject matter.

Both norms were presumably incorporated by Congress 

into the Patent Act in 1952. 

—————— 

Cf. ante, at 12–13 (plurality opinion). A great deal of human activity 

was at some time novel and nonobvious. 6Curiously, the Court concedes that “these exceptions are not required by the statutory text,” but urges that “they are consistent with 

the notion that a patentable process must be ‘new and useful.’ ” Ante, 

at 5 (emphasis added). I do not see how these exceptions find a textual 

home in the term “new and useful.” The exceptions may be consistent 

with those words, but they are sometimes inconsistent with the “ordinary, contemporary, common meaning,” ante, at 6, 10 (internal quotation marks omitted), of the words “process” and “method.” 
Cite as: 561 U. S. ____ (2010) 15 

STEVENS, J., concurring in judgment 

IV 

Because the text of §101 does not on its face convey the

scope of patentable processes, it is necessary, in my view, 

to review the history of our patent law in some detail. 

This approach yields a much more straightforward answer 

to this case than the Court’s. As I read the history, it

strongly supports the conclusion that a method of doing

business is not a “process” under §101. 

I am, of course, mindful of the fact that §101 “is a dynamic provision designed to encompass new and unforeseen inventions,” and that one must therefore view historical conceptions of patent-eligible subject matter at an

appropriately high level of generality. J. E. M. Ag Supply, 

534 U. S., at 135; see also Chakrabarty, 447 U. S., at 315– 

316. But it is nonetheless significant that while people 

have long innovated in fields of business, methods of doing 

business fall outside of the subject matter that has “historically been eligible to receive the protection of our

patent laws,” Diehr, 450 U. S., at 184, and likely go beyond

what the modern patent “statute was enacted to protect,” 

Flook, 437 U. S., at 593. It is also significant that when

Congress enacted the latest Patent Act, it did so against

the background of a well-settled understanding that a 

series of steps for conducting business cannot be patented. 

These considerations ought to guide our analysis. As 

Justice Holmes noted long ago, sometimes, “a page of 

history is worth a volume of logic.” New York Trust Co. v. 

Eisner, 256 U. S. 345, 349 (1921). 

English Backdrop 

The Constitution’s Patent Clause was written against

the “backdrop” of English patent practices, Graham v. 

John Deere Co. of Kansas City, 383 U. S. 1, 5 (1966), and 

early American patent law was “largely based on and

incorporated” features of the English patent system, E.

Walterscheid, To Promote the Progress of Useful Arts: 
16 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

American Patent Law and Administration, 1789–1836, 

p.109 (1998) (hereinafter Walterscheid, To Promote the 

Progress).7 The governing English law, the Statute of 

Monopolies, responded to abuses whereby the Crown

would issue letters patent, “granting monopolies to court 

favorites in goods or businesses which had long before 

been enjoyed by the public.” Graham, 383 U. S., at 5. The 

statute generally prohibited the Crown from granting such 

exclusive rights, 21 Jam. 1, c. 3, §1 (1623), in 4 Statutes of 

the Realm 1213 (reprint 1963), but it contained exceptions

that, inter alia, permitted grants of exclusive rights to the

“working or making of any manner of new Manufacture.”

§6.

Pursuant to that provision, patents issued for the

“mode, method, or way of manufacturing,” F. Campin, Law 

of Patents for Inventions 11 (1869) (emphasis deleted), 

and English courts construed the phrase “working or 

making of any manner of new manufactures” to encompass manufacturing processes, see, e.g., Boulton v. Bull, 2 

H. Bl. 463, 471, 492, 126 Eng. Rep. 651, 655, 666 (C. P.

1795) (holding that the term “manufacture” “applied not 

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”). Thus, English 

courts upheld James Watt’s famous patent on a method 

for reducing the consumption of fuel in steam engines,8 as 

—————— 

7See Pennock v. Dialogue, 2 Pet. 1, 18 (1829) (“[M]any of the provisions of our patent act are derived from the principles and practice, 

which have prevailed in the construction of that of England”); Proceedings in Congress During the Years 1789 and 1790 Relating to the First

Patent and Copyright Laws, 22 J. Pat. Off. Soc. 352, 363 (1940) (explaining that the 1790 Patent Act was “framed according to the Course 

of Practice in the English Patent Office”); see also Walterscheid, The

Early Evolution of the United States Patent Law: Antecedents, 76 J.

Pat. & Trademark Off. Soc. 697, 698 (1994) (describing the role of the

English backdrop). 8See Hornblower v. Boulton, 8 T. R. 95 (K. B. 1799). 
Cite as: 561 U. S. ____ (2010) 17 

STEVENS, J., concurring in judgment 

well as a variety of patents issued for methods of synthesizing substances or building mechanical devices.9 

Although it is difficult to derive a precise understanding 

of what sorts of methods were patentable under English 

law, there is no basis in the text of the Statute of Monopolies, nor in pre-1790 English precedent, to infer that business methods could qualify.10 There was some debate 

throughout the relevant time period about what processes

could be patented. But it does not appear that anyone 

seriously believed that one could 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 relating to banking or lotteries and one for 

a method of life insurance,12 but these did not constitute 

—————— 

9See, e.g., Roebuck and Garbett v. William Stirling & Son (H. L.

1774), reprinted in 1 T. Webster, Reports and Notes of Cases on Letters 

Patent for Inventions 45 (1844) (“method of making acid spirit by

burning sulphur and saltpetre, and collecting the condensed fumes”); 

id., at 77 (“ ‘method of producing a yellow colour for painting in oil or 

water, making white lead, and separating the mineral alkali from

common salt, all to be performed in one single process’ ”); see also C.

MacLeod, Inventing the Industrial Revolution: The English Patent

System, 1660–1800, pp. 84–93, 100–104, 109–110, 152–155 (1988)

(listing patents) (hereinafter MacLeod). 10Some English cases made reference to the permissibility of patents

over new “trades.” But so far as I can tell, the term “trade” referred not 

to the methods of conducting business but rather to methods of making

and using physical items or to the object of the trade. See, e.g., Clothworkers of Ipswich Case, 78 Eng. Rep. 147, 148 (K. B. 1603) (“[I]f a

man hath brought in a new invention and a new trade within the 

kingdom . . . [the King] may grant by charter unto him”). 11See also Pollack, The Multiple Unconstitutionality of Business 

Method Patents: Common Sense, Congressional Consideration, and 

Constitutional History, 28 Rutgers Computer & Tech. L. J. 61, 94–96

(2002) (hereinafter Pollack) (describing English practice). 12See id., at 95; B. Woodcroft, Alphabetical Index of Patentees of

Inventions, from March 2, 1617 (14 James I) to October 1, 1852 (16 

Victoriae) 383, 410 (2d ed. 1969) (hereinafter Woodcroft). 
18 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

the “prevail[ing]” “principles and practice” in England on

which our patent law was based, Pennock v. Dialogue, 2 

Pet. 1, 18 (1829). Such patents were exceedingly rare, and 

some of them probably were viewed not as inventions or 

discoveries but rather as special state privileges13 that 

until the mid-1800’s were recorded alongside inventions in

the patent records, see MacLeod 1–2 (explaining that 

various types of patents were listed together). It appears

that the only English patent of the time that can fairly be

described as 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.” Woodcroft 324.14 And “[t]here is no 

indication” that this patent “was ever enforced or its validity tested,” 545 F. 3d, at 974 (Dyk, J., concurring); the 

patent may thus have represented little more than the 

whim—or error—of a single patent clerk.15 

In any event, these patents (or patent) were probably 

not known to the Framers of early patent law. In an era 

before computerized databases, organized case law, and 

treatises,16 the American drafters probably would have 

—————— 

13See, e.g., C. Ewen, Lotteries and Sweepstakes 70–71 (1932) (describing the “letters patent” to form a colony in Virginia and to operate 

lotteries to fund that colony). 14See also Renn, John Knox’s Plan for Insuring Lives: A Patent of 

Invention in 1778, 101 J. Inst. Actuaries 285, 286 (1974) (hereinafter

Renn) (describing the patent). 15 “The English patent system” at that time “was one of simple registration. Extensive scrutiny was not expected of the law officers administering it.” MacLeod 41. Thus, as one scholar suggested of the patent 

on life insurance, “perhaps the Law Officer was in a very good humour 

that day, or perhaps he had forgotten the wording of the statute; most

likely he was concerned only with the promised ‘very considerable 

Consumption of [Revenue] Stamps’ which [the patent holder] declared, 

would ‘contribute to the increase of the Public Revenues.’ ” Renn 285. 16See Markman v. Westview Instruments, Inc., 517 U. S. 370, 381 

(1996) (“[T]he state of patent law in the common-law courts before 1800

led one historian to observe that ‘the reported cases are destitute of any

decision of importance’ ” (quoting Hulme, On the Consideration of the 
Cite as: 561 U. S. ____ (2010) 19 

STEVENS, J., concurring in judgment 

known about particular 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 business methods. 

Also noteworthy is what was not patented under the

English system. During the 17th and 18th centuries, 

Great Britain saw innovations in business organization,17 

business models,18 management techniques,19 and novel 

solutions to the challenges of operating global firms in 

which subordinate managers could be reached only by a 

long sea voyage.20 Few if any of these methods of conducting business were patented.21 

—————— 

Patent Grant, Past and Present, 13 L. Q. Rev. 313, 318 (1897)));

MacLeod 1, 61–62 (explaining the dearth of clear case law); see also 

Boulton v. Bull, 2 H. Bl. 463, 491, 126 Eng. Rep. 651, 665 (C. P. 1795)

(Eyre, C. J.) (“Patent rights are no where that I can find accurately 

discussed in our books”). 17See, e.g., A. DuBois, The English Business Company After the Bubble Act, 1720–1800, pp. 38–40, 435–438 (1938); Harris, The Bubble

Act: Its Passage and its Effects on Business Organization, 54 J. Econ.

Hist. 610, 624–625 (1994). 18See Pollack 97–100. For example, those who held patents on oil

lamps developed firms that contracted to provide street lighting. See 

M. Falkus, Lighting in the Dark Ages of English Economic History:

Town Streets before the Industrial Revolutions, in Trade, Government, 

and Economy in Pre-Industrial England 249, 255–257, 259–260 (D.

Coleman & A. John eds. 1976). 19See, e.g., G. Hammersley, The State and the English Iron Industry

in the Sixteenth and Seventeenth Centuries, in id., at 166, 173, 175– 

178 (describing the advent of management techniques for efficiently 

running a major ironworks). 20See, e.g., Carlos & Nicholas, Agency Problems in Early Chartered 

Companies: The Case of the Hudson’s Bay Company, 50 J. Econ. Hist. 

853, 853–875 (1990). 21Nor, so far as I can tell, were business method patents common in

the United States in the brief period between independence and the 

creation of our Constitution—despite the fact that it was a time of great 

business innovation, including new processes for engaging in risky

trade and transport, one of which has been called “the quintessential

business innovation of the 1780s.” T. Doerflinger, A Vigorous Spirit of 
20 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

Early American Patent Law 

At the Constitutional Convention, the Founders decided 

to give Congress a patent power so that it might “promote

the Progress of . . . useful Arts.” Art. I, §8, cl. 8. There is 

little known history of that Clause.22 We do know that the 

Clause passed without objection or debate.23 This is striking because other proposed powers, such as a power to 

grant charters of incorporation, generated discussion 

about the fear that they might breed “monopolies.”24 

Indeed, at the ratification conventions, some States recommended amendments that would have prohibited Congress from granting “‘exclusive advantages of commerce.’” 25 If the original understanding of the Patent 

—————— 

Enterprise: Merchants and Economic Development in Revolutionary 

Philadelphia 291 (1986) (describing new methods of conducting and

financing trade with China). 22See Seidel, The Constitution and a Standard of Patentability, 48 J.

Pat. Off. Soc. 5, 10 (1966) (hereinafter Seidel); Walterscheid, To Promote the Progress of Science and Useful Arts: The Background and

Origin of the Intellectual Property Clause of the United States Constitution, 2 J. Intell. Prop. L. 1, 26 (1994) (hereinafter Walterscheid, 

Background and Origin); Walterscheid, To Promote the Progress 59,

and n. 12; Prager, A History of Intellectual Property From 1545 to

1787, 26 J. Pat. Off. Soc. 711, 746 (1944). 23Walterscheid, Background and Origin 26; 2 Records of the Federal 

Convention of 1787, pp. 509–510 (M. Farrand ed. 1966). 24 J. Madison, Notes of Debates in the Federal Convention of 1787, 

pp. 638–639 (Ohio Univ. Press ed. 1966). 25See Walterscheid, Background and Origin 38, n. 124, 55–56 (collecting sources); see also The Objections of Hon. George Mason, One of the

Delegates from Virginia, in the Late Continental Convention, to the 

Proposed Federal Constitution, Assigned as His Reasons For Not 

Signing the Same, 2 American Museum or Repository of Ancient and 

Modern Fugitive Pieces, etc. 534, 536 (1787) (reprint 1965); Ratification

of the New Constitution by the Convention of the State of New York, 4 

id., at 153, 156 (1789); Remarks on the Amendments to the Federal 

Constitution Proposed by The Conventions of Massachusetts, New 

Hampshire, New York, Virginia, South and North Carolina, with the 

Minorities of Pennsylvania and Maryland by the Rev. Nicholas Collin, 
Cite as: 561 U. S. ____ (2010) 21 

STEVENS, J., concurring in judgment 

Clause included the authority to patent methods 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 useful Arts” that authorized patents for persons who had “invented or discovered any 

useful art, manufacture, engine, machine, or device, or 

any improvement therein not before known or used,” if

“the invention or discovery [was] sufficiently useful and

important.” 1 Stat. 109–110. Three years later, Congress 

passed the Patent Act of 1793 and slightly modified the 

language to cover “any new and useful art, machine, 

manufacture or composition of matter, or any new and 

useful improvement on any art, machine, manufacture or 

composition of matter.” 1 Stat. 319. 

The object of the constitutional patent power and the

statutory authorization for process patents in the early 

patent Acts was the term “useful art.” It is not evident 

from the face of the statutes or the Constitution whether 

the objects of the patent system were “arts” that are also

useful, or rather a more specific category, the class of arts

known as “useful arts.” Cf. Graham, 383 U. S., at 12 

(describing the “‘new and useful’ tests which have always

existed in the statutory scheme” and apply to all categories of subject matter). However, we have generally assumed that “useful art,” at least as it is used in the Patent 

Act, is itself a term of art. See Burden, 15 How., at 267– 

268. 

The word “art” and the phrase “useful arts” are subject 

to many meanings. There is room on the margins to debate exactly what qualifies as either. There is room, 

moreover, to debate at what level of generality we should 

understand these broad and historical terms, given that 

“[a] rule that unanticipated inventions are without protection would conflict with the core concept of the patent 

—————— 

D. D., 6 id., at 303, 303. 
22 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

law,” Chakrabarty, 447 U. S., at 316. It appears, however,

that regardless of how one construes the term “useful

arts,” business methods are not included. 

Noah Webster’s first American dictionary26 defined the 

term “art” as the “disposition or modification of things by

human skill, to answer the purpose intended,” and differentiated 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). Although other 

dictionaries defined the word “art” more broadly,27 Webster’s definition likely conveyed a message similar to the 

meaning of the word “manufactures” in the earlier English 

statute. And we know that the term “useful arts” was 

used in the founding era to refer to manufacturing and 

similar applied trades.28 See Coulter, The Field of the 

—————— 

26Some scholars suggest that Webster’s “close proximity to the Constitutional Convention coupled with his familiarity with the delegates 

makes it likely that he played some indirect role in the development” of

the Constitution’s Intellectual Property Clause—a Clause that established not only the power to create patents but also copyrights, a 

subject in which Webster had great interest. Donner, Copyright Clause

of the U. S. Constitution: Why Did the Framers Include It With

Unanimous Approval? 36 Am. J. Legal. Hist. 361, 372 (1992). But 

there is no direct evidence of this fact. See Walterscheid, Background 

and Origin 40–41. 27See, e.g., 1 S. Johnson, Dictionary of the English Language (1773)

(reprint 1978) (listing as definitions of an “art”:“[t]he power of doing

something not taught by nature and instinct,” “[a] science; as, the 

liberal arts,” “[a] trade,” “[a]rtfulness; skill; dexterity,” “[c]unning,” and 

“[s]peculation”). One might question the breadth of these definitions.

This same dictionary offered as an example of “doing something not 

taught by nature and instinct,” the art of “dance”; and as an example of 

a “trade,” the art of “making sugar.” Ibid. 28For examples of this usage, see Book of Trades or Library of Useful

Arts (1807) (describing in a three-volume work 68 trades, each of which

is the means of creating a product, such as feather worker or cork

cutter); 1 J. Bigelow, The Useful Arts Considered in Connexion with the 

Applications of Science (1840) (surveying a history of what we would 
Cite as: 561 U. S. ____ (2010) 23 

STEVENS, J., concurring in judgment 

Statutory Useful Arts, 34 J. Pat. Off. Soc. 487, 493–500 

(1952); see also Thomas, The Patenting of the Liberal

Professions, 40 Boston College L. Rev. 1139, 1164 (1999) 

(“[The Framers of the Constitution] undoubtedly contemplated the industrial, mechanical and manual arts of the 

late eighteenth Century, in contrast to the seven ‘liberal 

arts’ and the four ‘fine arts’ of classical learning”). Indeed, 

just days before the Constitutional Convention, one delegate listed examples of American progress in “manufactures and the useful arts,” all of which involved the creation or transformation of physical substances. See T. 

Coxe, An Address to an Assembly of the Friends of American Manufactures 17–18 (1787) (listing, inter alia, meal, 

ships, liquors, potash, gunpowder, paper, starch, articles

of iron, stone work, carriages, and harnesses). Numerous 

scholars have suggested that the term “useful arts” was 

widely understood to encompass the fields that we would 

now describe as relating to technology or “technological 

arts.”29 

—————— 

today call mechanics, technology, and engineering). See also D. Defoe, 

A General History of Discoveries and Improvements, in Useful Arts

(1727); T. Coxe, An Address to an Assembly of the Friends of American 

Manufactures 17–18 (1787); G. Logan, A Letter to the Citizens of 

Pennsylvania, on the Necessity of Promoting Agriculture, Manufactures, and the Useful Arts 12–13 (2d ed. 1800); W. Kenrick, An Address

to the Artists and Manufacturers of Great Britain 21–38 (1774); cf. 

Corning v. Burden, 15 How. 252, 267 (1854) (listing the “arts of tanning, dyeing, making water-proof cloth, vulcanizing India rubber, [and] 

smelting ores”). 29See, e.g., 1 D. Chisum, Patents G1–23 (2010); Lutz, Patents and

Science: A Clarification of the Patent Clause of the U. S. Constitution, 

18 Geo. Wash. L. Rev. 50, 54 (1949–1950); Samuelson, Benson Revisited: The Case Against Patent Protection for Algorithms and Other

Computer-Related Inventions, 39 Emory L. J. 1025, 1033, n. 24 (1990);

Seidel 10, 13; see also Great Atlantic & Pacific Tea Co. v. Supermarket 

Equipment Corp., 340 U. S. 147, 154 (1950) (Douglas, J., concurring)

(explaining that in the Framers’ view, an “invention, to justify a patent,

had to serve the ends of science—to push back the frontiers of chemis-
24 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

Thus, fields such as business and finance were not 

generally considered part of the “useful arts” in the founding 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 a letter that “our commerce has been

considerably curtailed,” but “the useful arts have been

almost imperceptible pushed to a considerable degree of 

perfection”). Indeed, the same delegate to the Constitutional Convention who gave an address in which he listed 

triumphs in the useful arts distinguished between those

arts and the conduct of business. He explained that investors were now attracted to the “manufactures and the 

useful arts,” much as they had long invested in “commerce, navigation, stocks, banks, and insurance companies.” T. Coxe, A Statement of the Arts and Manufactures 

of the United States of America for the Year 1810, (1814),

in 2 American State Papers, Finance 666, 688 (1832). 

Some scholars have remarked, as did Thomas Jefferson, 

that early patent statutes neither included nor reflected

any serious debate about the precise scope of patentable 

—————— 

try, physics, and the like; to make a distinctive contribution to scientific

knowledge”); In re Waldbaum, 457 F. 2d 997, 1003 (CCPA 1972) (Rich,

J., concurring) (“ ‘The phrase “technological arts,” as we have used it, is

synonymous with the phrase “useful arts” as it appears in Article I,

Section 8 of the Constitution’ ”); Paulik v. Rizkalla, 760 F. 2d 1270, 

1276 (CA Fed. 1985) (explaining that “useful arts” is “the process today

called technological innovation”); Thomas, The Post-Industrial Patent 

System, 10 Fordham Intell. Prop. Media & Ent. L. J. 3, 32–55 (1999)

(cataloguing early understandings of technological arts). This view 

may be supported, for example, by an 1814 grant to Harvard University

to create a “Professorship on the Application of Science to the Useful 

Arts,” something that today might be akin to applied science or engineering. See M. James, Engineering an Environment for Change: 

Bigelow, Peirce, and Early Nineteenth-Century Practical Education at 

Harvard, in Science at Harvard University: Historical Perspectives 59

(C. Elliott & M. Rossiter eds. 1992). 
Cite as: 561 U. S. ____ (2010) 25 

STEVENS, J., concurring in judgment 

subject matter. See, e.g., Graham, 383 U. S., at 9–10 

(discussing Thomas Jefferson’s observations). It has been 

suggested, however, that “[p]erhaps this was in part a

function of an understanding—shared widely among

legislators, courts, patent office officials, and inventors—

about what patents were meant to protect. Everyone

knew that manufactures and machines were at the core of 

the patent system.” Merges, Property Rights for Business 

Concepts and Patent System Reform, 14 Berkeley Tech. 

L. J. 577, 585 (1999) (hereinafter Merges). Thus, although

certain processes, such as those related to the technology

of the time, might have been considered patentable, it is 

possible that “[a]gainst this background, it would have

been seen as absurd for an entrepreneur to file a patent” 

on methods of conducting business. Ibid. 

Development of American Patent Law 

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 “the patentability of processes per se,” as distinct from the physical end 

product or the tools used to perform a process. Id., at 581– 

582.31 

Thomas Jefferson was the “‘first administrator of our 

patent system’” and “the author of the 1793 Patent Act.” 

Graham, 383 U. S., at 7. We have said that his “conclusions as to conditions of patentability . . . are worthy of 

note.” Ibid. at 7. During his time administering the system, Jefferson “saw clearly the difficulty” of deciding what 

—————— 

30See Walterscheid, To Promote the Progress 173–178; Pollack 107–

108. 31These doubts ended by the time of Cochrane v. Deener, 94 U. S. 780 

(1877), in which we held that “a process may be patentable irrespective

of the particular form of the instrumentalities used,” and therefore one

may patent “an act, or series of acts, performed upon the subject matter

to be transformed and reduced to a different state or thing.” Id., at 788. 
26 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

should be patentable.32 Id., at 9. He drafted the 1793 Act, 

id., at 7, and, years later, explained that in that Act “‘the 

whole was turned over to the judiciary, to be matured into

a system, under which every one might know when his 

actions were safe and lawful,’” id., at 10 (quoting Letter to 

Issac McPherson, in VI Writings of Thomas Jefferson 181–

182 (H. Washington ed. 1861)). As the Court has explained, “Congress agreed with Jefferson . . . that the 

courts should develop additional conditions for patentability.” Graham, 383 U. S., at 10. Thus “[a]lthough the 

Patent Act was amended, revised or codified some 50 

times between 1790 and 1950, Congress steered clear” of 

adding statutory requirements of patentability. Ibid. For 

nearly 160 years, Congress retained the term “useful arts,” 

see, e.g., Act of July 4, 1836, ch. 357, 5 Stat. 117, leaving 

“wide latitude for judicial construction . . . to keep pace

with industrial development,” Berman, Method Claims, 17

J. Pat. Off. Soc. 713, 714 (1935) (hereinafter Berman). 

Although courts occasionally struggled with defining 

what was a patentable “art” during those 160 years, they 

consistently rejected patents on methods of doing business. The rationales for those decisions sometimes varied. 

But there was an overarching theme, at least in dicta:

Business methods are not patentable arts. See, e.g., 

United States Credit Sys. Co. v. American Credit Indem. 

Co., 53 F. 818, 819 (CC NY 1893) (“method of insuring

against loss by bad debts” could not be patented “as an

art”); Hotel Security Checking Co. v. Lorraine Co., 160 F. 

467, 469 (CA2 1908) (“A system of transacting business

disconnected from the means for carrying out the system 

is not, within the most liberal interpretation of the term, 

—————— 

32A skeptic of patents, Jefferson described this as “drawing a line

between things which are worth to the public the embarrassment of a 

patent, and those which are not.” 13 Writings of Thomas Jefferson 335 

(Memorial ed. 1904). 
Cite as: 561 U. S. ____ (2010) 27 

STEVENS, J., concurring in judgment 

an art”); Guthrie v. Curlett, 10 F. 2d 725, 726 (CA2 1926) 

(method of abbreviating rail tariff schedules, “if it be

novel, is not the kind of art protected by the patent acts”); 

In re Patton, 127 F. 2d 324, 327–328 (CCPA 1942) (holding 

that novel “‘interstate and national fire-fighting system’” 

was not patentable because, inter alia, “a system of transacting business, apart from the means for carrying out 

such system is not” an art within the meaning of the 

patent law, “nor is an abstract idea or theory, regardless of

its importance or . . . ingenuity”); Loew’s Drive-In Theatres, Inc. v. Park-In Theatres, Inc., 174 F. 2d 547, 552 (CA1

1949) (“[A] system for the transaction of business, such,

for example, as the cafeteria system for transacting the 

restaurant business . . . however novel, useful, or commercially successful is not patentable apart from the means

for making the system practically useful, or carrying it

out”); Joseph E. Seagram & Sons, Inc. v. Marzall, 180 

F. 2d 26, 28 (CADC 1950) (method of focus-group testing 

for beverages is not patentable subject matter); see also 

In re Howard, 394 F. 2d 869, 872 (CCPA 1968) (Kirkpatrick, J., concurring) (explaining that a “method of doing 

business” cannot be patented). Between 1790 and 1952, 

this Court never addressed the patentability of business 

methods. But we consistently focused the inquiry on 

whether an “art” was connected to a machine or physical

transformation,33 an inquiry that would have excluded 

methods of doing business. 

By the early 20th century, it was widely understood that 

a series of steps for conducting business could not be 

patented. A leading treatise, for example, listed “‘systems’ 

of business” as an “unpatentable subjec[t].” 1 A. Deller, 

—————— 

33See, e.g., Expanded Metal Co. v. Bradford, 214 U. S. 366, 383, 385– 

386 (1909); The Telephone Cases, 126 U. S., at 533–537; Cochrane, 94 

U. S., at 787–788; Burden, 15 How., at 267–268. 
28 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

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 “‘art.’” Id., §22, at 69; see

also L. Amdur, Patent Law and Practice §39, p. 53 (1935)

(listing “Methods of doing business” as an “Unpatentable 

[A]r[t]”); Berman 718 (“[C]ases have been fairly unanimous in denying patentability to such methods”); Tew,

Method of Doing Business, 16 J. Pat. Off. Soc. 607 (1934) 

(“It is probably settled by long practice and many precedents that ‘methods of doing business,’ as these words are

generally understood, are unpatentable”). Indeed, “[u]ntil

recently” it was still “considered well established that

[business] methods were non-statutory.” 1 R. Moy, Walker 

on Patents §5:28, p. 5–104 (4th ed. 2009).35 

Modern American Patent Law 

By the mid-1900’s, many courts were construing the

term “art” by using words such as “method, process, system, or like terms.” Berman 713; see Expanded Metal Co. 

v. Bradford, 214 U. S. 366, 382 (1909) (“The word ‘process’ 

has been brought into the decisions because it is supposedly an equivalent form of expression or included in the 

—————— 

34See also 1 A. Deller, Walker on Patents §26, p. 152 (2d ed. 1964) (A 

“ ‘system’ or method of transacting business is not [a process], nor does 

it come within any other designation of patentable subject matter”). 35Although a few patents issued before 1952 that related to methods 

of doing business, see United States Patent and Trademark Office, 

Automated Financial or Management Data Processing Methods, online 

at http://www.uspto.gov/web/menu/busmethp/index.html (all Internet 

materials as visited June 26, 2010, and available in Clerk of Court’s 

case file), these patents were rare, often issued through selfregistration rather than any formalized patent examination, generally

were not upheld by courts, and arguably are distinguishable from pure 

patents on business methods insofar as they often involved the manufacture of new objects. See In re Bilski, 545 F. 3d 943, 974, and n. 18 

(CA Fed. 2008) (case below) (Dyk, J., concurring); Pollack 74–75; 

Walterscheid, To Promote the Progress 243. 
Cite as: 561 U. S. ____ (2010) 29 

STEVENS, J., concurring in judgment 

statutory designation of a new and useful art”).36 Thus in 

1952, when Congress updated the patent laws as part of 

its ongoing project to revise the United States Code, it 

changed the operative language in §101, replacing the 

term “art” with “process” and adding a definition of “process” 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 Diehr, 450 U. S., at 

184. The new terminology was added only in recognition

of the fact that courts had been interpreting the category

“art” by using the terms “process or method”; Congress 

thus wanted to avoid “the necessity of explanation that the

word ‘art’ as used in this place means ‘process or method.’” 

S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952) (hereinafter

S. Rep. 1979); accord, H. R. Rep. No. 1923, 82d Cong., 2d

Sess., 6 (1952) (hereinafter 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 process or method,” and that the switch to the word

“[p]rocess” was intended only for clarity).37 

It appears that when Congress changed the language in 

§101 to incorporate the prevailing judicial terminology, it 

merely codified the prevailing judicial interpretation of 

that category of subject matter. See Diehr, 450 U. S., at 

184; see also Barber v. Gonzales, 347 U. S. 637, 641 (1954) 

(“While it is true that statutory language should be interpreted whenever possible according to common usage,

some terms acquire a special technical meaning by a 

process of judicial construction”). Both the Senate and 

House Committee Reports explained that the word “proc-

—————— 

36For examples of such usage, see The Telephone Cases, 126 U. S., at 

533, and Burden, 15 How., at 267. 37See also 98 Cong. Rec. A415 (1952) (remarks of Rep. Bryson) (describing, after the fact, the 1952 Patent Act, and explaining that “[t]he 

word ‘art’ was changed to ‘process’ in order to clarify its meaning. No 

change in substance was intended”). 
30 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

ess” was used in §101 “to clarify the present law as to the 

patentability of certain types of processes 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 used to convey the prevailing 

meaning of the term “art,” “as interpreted” by courts,

S. Rep. 1979, at 17; accord, H. Rep. 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 the 

courts have construed the term ‘art.’ ” Tr. of address by

Judge Giles S. Rich to the New York Patent Law Association 7–8 (Nov. 6, 1952).

As discussed above, by this time, courts had consistently

construed the term “art” to exclude methods of doing 

business. The 1952 Act likely captured that same meaning.38 Cf. Graham, 383 U. S., at 16–17 (reasoning that 

because a provision of the 1952 Act “paraphrases language 

which has often been used in decisions of the courts” and 

was “added to the statute for uniformity and definiteness,” 

that provision should be treated as “a codification of judicial precedents”).39 Indeed, Judge Rich, the main drafter 

—————— 

38The 1952 Act also retained the language “invents or discovers,” 

which by that time had taken on a connotation that would tend to

exclude business methods. See B. Evans & C. Evans, A Dictionary of

Contemporary Usage 137 (1957) (explaining that “discover; invent”

means “to make or create something new, especially, in modern usage, 

something ingeniously devised to perform mechanical operations”). 39As explained in Part II, supra, the Court engages in a Jekyll-andHyde form of interpretation with respect to the word “process” in §101.

It rejects the interpretation I proffer because the words “process” and 

“method” do not, on their face, distinguish between different series of 

acts. Ante, at 10. But it also rejects many sorts of processes without a

textual basis for doing so. See ante, at 4–5, 7, 12–15. And while the 

Courts rests a great deal of weight on Parker v. Flook, 437 U. S. 584 

(1978), for its analysis of abstract ideas, the Court minimizes Flook’s 

rejection of “a purely literal reading of §101,” as well as Flook’s reliance 

on the historical backdrop of §101 and our understanding of what “the 

statute was enacted to protect,” id., at 588–590, 593; see also Diamond 
Cite as: 561 U. S. ____ (2010) 31 

STEVENS, J., concurring in judgment 

of the 1952 Act, later explained that “the invention of a 

more effective organization of the materials in, and the

techniques of teaching a course in physics, chemistry, or 

Russian is not a patentable invention because it is outside

of the enumerated categories of ‘process, machine, manufacture, or composition of matter, or any new and useful

improvement thereof.’” Principles of Patentability, 28

Geo. Wash. L. Rev. 393, 394 (1960). “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 Sun” 

Despite strong evidence that Congress has consistently 

authorized patents for a limited class of subject matter 

and that the 1952 Act did not alter the nature of the thenexisting limits, petitioners and their amici emphasize a

single phrase in the Act’s legislative history, which suggests that the statutory subject matter “‘include[s] anything under the sun that is made by man.’” Brief for 

Petitioners 19 (quoting Chakrabarty, 447 U. S., at 309, in 

turn quoting S. Rep. 1979, at 5). Similarly, the Court 

relies on language from our opinion in Chakrabarty that 

was based in part on this piece of legislative history. See 

ante, at 4, 6. 

This reliance is misplaced. We have never understood 

—————— 

v. Diehr, 450 U. S. 175, 192 (1981) (explaining that a “claim satisfies 

the requirements of §101” when it “is performing a function which the 

patent laws were designed to protect”). 40Forty years later, Judge Rich authored the State Street opinion that

some have understood to make business methods patentable. But State 

Street dealt with whether a piece of software could be patented and

addressed only claims directed at machines, not processes. His opinion 

may therefore be better understood merely as holding that an otherwise

patentable process is not unpatentable simply because it is directed

toward the conduct of doing business—an issue the Court has no 

occasion to address today. See State Street, 149 F. 3d, at 1375. 
32 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

that piece of legislative history to mean that any series of 

steps is a patentable process. Indeed, if that were so, then 

our many opinions analyzing what is a patentable process 

were simply wastes of pages in the U. S. Reports. And to 

accept that errant piece of legislative history as widening 

the scope of the patent law would contradict other evidence in the congressional record, as well as our presumption that the 1952 Act merely codified the meaning of 

“process” and did not expand it, see Diehr, 450 U. S., at 

184. 

Taken in context, it is apparent that the quoted language has a far 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 under the sun that is made by man, but it is not 

necessarily patentable under section 101 unless the conditions of [this] title are fulfilled.” S. Rep. 1979, at 5; H. R. 

Rep. 1923, at 6. Viewed as a whole, it seems clear that 

this language does not purport to explain that “anything 

under the sun” is patentable. Indeed, the language may 

be understood to state the exact opposite: that “[a] person

may have ‘invented’ . . . anything under the sun,” but that 

thing “is not necessarily patentable under section 101.”

Thus, even in the Chakrabarty opinion, which relied on 

this quote, we cautioned that the 1952 Reports did not 

“suggest that §101 has no limits or that it embraces every 

discovery.” 447 U. S., at 309. 

Moreover, even if the language in the Committee Reports was meant to flesh out the meaning of any portion of 

§101, it did not purport to define the term “process.” The 

language refers only to “manufacture[s]” and “machine[s],” 

tangible objects “made by man.” It does not reference the 

“process” category of subject matter (nor could a process be

comfortably described as something “made by man”). The 

language may also be understood merely as defining the 

term “invents” in §101. As Judge Dyk explained in his 
Cite as: 561 U. S. ____ (2010) 33 

STEVENS, J., concurring in judgment 

opinion below, the phrase “made by man” “is reminiscent” 

of a 1790’s description of the limits of English patent law,

that an “invention must be ‘made by man’” and cannot be 

“‘a philosophical principle only, neither organized or capable of being organized’ from a patentable manufacture.”

545 F. 3d, at 976 (quoting Hornblower v. Boulton, 8 T. R. 

95, 98 (K. B. 1799)). 

The 1952 Act, in short, cannot be understood as expanding the scope of patentable subject matter by suggesting

that any series of steps may be patented as a “process” 

under §101. If anything, the Act appears to have codified 

the conclusion that subject matter which was 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 have cast significant doubt on that 

proposition by giving substantial weight to the machineor-transformation test, as general methods of doing business do not pass that test. And more recently, Members of

this Court have noted that patents on business methods 

are of “suspect validity.” eBay Inc. v. MercExchange, L. L. 

C., 547 U. S. 388, 397 (2006) (KENNEDY, J., concurring). 

* * * 

Since at least the days of Assyrian merchants, people

have devised better and better ways to conduct business. 

Yet it appears that neither the Patent Clause, nor early 

patent law, nor the current §101 contemplated or was

publicly understood to mean that such innovations are

patentable. Although it may be difficult to define with

precision what is a patentable “process” under §101, the 

historical clues converge on one conclusion: A business 

method is not a “process.” And to the extent that there is 

ambiguity, we should be mindful of our judicial role. “[W]e 
34 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

must proceed cautiously when we are asked to extend

patent rights” into an area that the Patent Act likely was 

not “enacted to protect,” Flook, 437 U. S., at 596, 593, lest 

we create a legal regime that Congress never would have 

endorsed, and that can be repaired only by disturbing

settled property rights. 

V 

Despite the strong historical evidence that a method of 

doing business does not constitute a “process” under §101,

petitioners nonetheless 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 patentable. Brief for 

Petitioners 29. This argument utilizes a flawed method of

statutory interpretation and ignores the motivation for the 

1999 Act. 

In 1999, following a Federal Circuit decision that intimated business methods could be patented, see State 

Street, 149 F. 3d 1368, Congress moved quickly to limit

the potential fallout. Congress passed the 1999 Act, codified at 35 U. S. C. §273, which provides a limited defense 

to claims of patent infringement, see §273(b), regarding 

certain “method[s] of doing or conducting business,” 

§273(a)(3).

It is apparent, both from the content and history of the

Act, that Congress did not in any way ratify State Street 

(or, as petitioners contend, the broadest possible reading 

of State Street). The Act merely limited one potential 

effect of that decision: that businesses might suddenly find 

themselves liable for innocently using methods they assumed could not be patented. The Act did not purport to

amend the limitations in §101 on eligible subject matter.

Indeed, Congress placed the statute in Part III of Title 35,

which addresses “Patents and Protection of Patent 

Rights,” rather than in Part II, which contains §101 and 
Cite as: 561 U. S. ____ (2010) 35 

STEVENS, J., concurring in judgment 

addresses “Patentability of Inventions and Grant of Patents.” Particularly because petitioners’ reading of the

1999 Act would expand §101 to cover a category of processes that have not “historically been eligible” for patents, 

Diehr, 450 U. S., at 184, we should be loathe to conclude 

that Congress effectively amended §101 without saying so 

clearly. We generally presume that Congress “does not,

one might say, hide elephants in mouseholes.” Whitman 

v. American Trucking Assns., Inc., 531 U. S. 457, 468 

(2001).

The Act therefore is, at best, merely evidence of 1999 

legislative views on the meaning of the earlier, 1952 Act. 

“[T]he views of a subsequent Congress,” however, “form a

hazardous basis for inferring the intent of an earlier one.” 

United States v. Price, 361 U. S. 304, 313 (1960). When a 

later statute is offered as “an expression of how the . . . 

Congress interpreted a statute passed by another Congress . . . a half century before,” “such interpretation has 

very little, if any, significance.” Rainwater v. United 

States, 356 U. S. 590, 593 (1958). 

Furthermore, even assuming that Congress’ views at 

the turn of the 21st century could potentially serve as a 

valid basis for interpreting a statute passed in the mid20th century, the First Inventor Defense Act does not aid 

petitioners because it does not show that the later Congress itself understood §101 to cover business methods. If 

anything, it shows that a few judges on the Federal Circuit understood §101 in that manner and that Congress

understood what those judges had done. The Act appears

to reflect surprise and perhaps even dismay that business

methods might be patented. Thus, in the months following State Street, congressional authorities lamented that

“business methods and processes . . . until recently were 

thought not to be patentable,” H. R. Rep. No. 106–464,

p. 121 (1999); accord, H. R. Rep. No. 106–287, pt. 1, p. 31 
36 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

(1999).41 The fact that Congress decided it was appropriate to create a new defense to claims that business method 

patents were being infringed merely demonstrates recognition that such claims could create a significant new 

problem for the business community.

The Court nonetheless states that the 1999 Act “acknowledges that there may be business method patents,” 

thereby “clarify[ing]” its “understanding” of §101. Ante, at 

11. More specifically, the Court worries that if we were to

interpret the 1952 Act to exclude business methods, our 

interpretation “would render §273 meaningless.” Ibid. I 

agree that “[a] statute should be construed so that effect is 

given to all its provisions.” Corley v. 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 statute, the 1952 Act, to 

give effect to a different statute, the 1999 Act. The canon 

on which the Court relies is predicated upon the idea that

“[a] statute is passed as a whole.” 2A N. Singer & J.

Singer, Statutes and Statutory Construction §46:5, p. 189

(7th ed. 2007). But the two statutes in question were not 

passed as a whole. 

Put another way, we ordinarily assume, quite sensibly, 

that Congress would not in one statute include two provisions that are at odds with each other. But as this case 

shows, that sensible reasoning can break down when 

—————— 

41See also 145 Cong. Rec. 30985 (1999) (remarks of Sen. Schumer) 

(explaining that “[i]n State Street, the Court did away with the so-called 

‘business methods’ exception to statutory patentable subject matter,”

and “[t]he first inventor defense will provide . . . important, needed

protections in the face of the uncertainty presented by . . . the State 

Street case”); id., at 31007 (remarks of Sen. DeWine) (“Virtually no one 

in the industry believed that these methods or processes were patentable”); id., at 19281 (remarks of Rep. Manzullo) (“Before the State

Street Bank and Trust case . . . it was universally thought that methods of doing or conducting business were not patentable items”). 
Cite as: 561 U. S. ____ (2010) 37 

STEVENS, J., concurring in judgment 

applied to different statutes.42 The 1999 Act was passed to 

limit the impact of the Federal Circuit’s then-recent statements on the 1952 Act. Although repudiating that judicial

dictum (as we should) might effectively render the 1999

Act a nullity going forward, such a holding would not 

mean that it was a nullity when Congress enacted it. 

Section 273 may have been a technically unnecessary 

response to confusion about patentable subject matter, but 

it appeared necessary in 1999 in light of what was being 

discussed in legal circles at the time.43 Consider the logical implications of the Court’s approach to this question: 

If, tomorrow, Congress were to conclude that patents on

business methods are so important that the special infringement defense in §273 ought to be abolished, and 

thus repealed that provision, this could paradoxically 

strengthen the case against such patents because there 

would no longer be a §273 that “acknowledges . . . business 

method patents,” ante, at 11. That is not a sound method 

of statutory interpretation. 

In light of its history and purpose, I think it obvious 

—————— 

42The Court opines that “[t]his principle, of course, applies to interpreting any two provisions in the U. S. Code, even when Congress 

enacted the provisions at different times.” Ante, at 11 (emphasis 

added). The only support the Court offers for this proposition is a 1937

opinion for three Justices, in Hague v. Committee for Industrial Organization, 307 U. S. 496, 528–530 (1939) (opinion of Stone, J.). But 

that opinion is inapposite. Although Justice Stone stated that two

provisions “must be read together,” id., at 530, he did so to explain that

an ambiguity in a later-in-time statute must be understood in light of 

the earlier-in-time framework against which the ambiguous statute 

was passed, id., at 528–530, particularly because the later statute 

explicitly stated that it “shall not be construed to apply” to the provision created by an earlier Act, id., at 528. 43 I am not trying to “overcome” an “established rule of statutory interpretation” with “judicial speculation as to the subjective intent of 

various legislators,” ante, at 11, but, rather, I am explaining why the

Court has illogically expanded the canon upon which it relies beyond 

that canon’s logical underpinnings. 
38 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

that the 1999 Congress would never have enacted §273 if 

it had foreseen that this Court would rely on the provision 

as a basis for concluding that business methods are patentable. Section 273 is a red herring; we should be focusing our attention on §101 itself. 

VI 

The constitutionally mandated purpose and function of 

the patent laws bolster the conclusion that methods of 

doing business are not “processes” under §101. 

The Constitution allows Congress to issue patents “[t]o

promote the Progress of . . . useful Arts,” Art. I, §8, cl. 8. 

This clause “is both a grant of power and a limitation.” 

Graham, 383 U. S., at 5. It “reflects a balance between the 

need to encourage innovation and the avoidance of monopolies which 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 not be ignored.

And it is in this light that patent validity ‘requires reference to [the] standard written into the Constitution.’” 

Graham, 383 U. S., at 6 (quoting Great Atlantic & Pacific 

Tea Co. v. Supermarket Equipment Corp., 340 U. S. 147, 

154 (1950) (Douglas, J., concurring) (emphasis deleted));

see also Grant v. Raymond, 6 Pet. 218, 241–242 (1832)

(explaining that patent “laws which are passed to give

effect to this [constitutional] purpose ought, we think, to

be construed in the spirit in which they have been

made”).44 

—————— 

44See also Quanta Computer, Inc. v. LG Electronics, Inc., 553 U. S. 

617, 626 (2008) (“ ‘[T]he primary purpose of our patent laws is not the 

creation of private fortunes for the owners of patents but is “to promote

the progress of science and useful arts” ’ ” (quoting Motion Picture 

Patents Co. v. Universal Film Mfg. Co., 243 U. S. 502, 511 (1917))); 

Pfaff v. Wells Electronics, Inc., 525 U. S. 55, 63 (1998) (“[T]he patent

system represents a carefully crafted bargain that encourages both the

creation and the public disclosure of new and useful advances in 
Cite as: 561 U. S. ____ (2010) 39 

STEVENS, J., concurring in judgment 

Thus, although it is for Congress to “implement the 

stated purpose of the Framers by selecting the policy 

which in its judgment best effectuates the constitutional 

aim,” Graham, 383 U. S., at 6, we interpret ambiguous

patent laws as a set of rules that “wee[d] out those inventions which would not be disclosed or devised but for the 

inducement of a patent,” id., at 11, and that “embod[y]” 

the “careful balance between the need to promote innovation and the recognition that imitation and refinement 

through imitation are both necessary to invention itself

and the very lifeblood of a competitive economy,” Bonito 

Boats, 489 U. S., at 146. And absent a discernible signal

from Congress, we proceed cautiously when dealing with 

patents that press on the limits of the “‘standard written

into the constitution,’” Graham, 383 U. S., at 6, for at the 

“fringes of congressional power,” “more is required of

legislatures than a vague delegation to be filled in later,” 

Barenblatt v. United States, 360 U. S. 109, 139–140 (1959) 

(Black, J., dissenting); see also Greene v. McElroy, 360 

U. S. 474, 507 (1959) (“[D]ecisions of great constitutional 

import and effect” “requir[e] careful and purposeful consideration by those responsible for enacting and implementing our laws”). We should not casually risk exceeding

the constitutional limitation on Congress’ behalf. 

The Court has kept this “constitutional standard” in

mind when deciding what is patentable subject matter 

under §101. For example, we have held that no one can 

patent “laws of nature, natural phenomena, and abstract

ideas.” Diehr, 450 U. S., at 185. These “are the basic tools 

of scientific and technological work,” Benson, 409 U. S., at 

67, and therefore, if patented, would stifle the very progress that Congress is authorized to promote, see, e.g., 

O’Reilly, 15 How., at 113 (explaining that Morse’s patent

on electromagnetism for writing would preempt a wide 

—————— 

technology”). 
40 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

swath of technological developments). 

Without any legislative guidance to the contrary, there

is a real concern that patents on business methods would 

press on the limits of the “standard expressed in the Constitution,” 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 business 

are the same, and that therefore the constitutional “balance,” Bonito Boats, 489 U. S., at 146, may vary within 

this category. Nevertheless, I think that this balance 

generally supports the historic understanding of the term

“process” as excluding business methods. And a categorical analysis fits with the purpose, as Thomas Jefferson 

explained, of ensuring that “‘every one might know when 

his actions were safe and lawful,’” Graham, 383 U. S., at 

10; see also Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U. S. 722, 730–731 (2002) (“The monopoly is

a property right; and like any property right, its boundaries should be clear. This clarity is essential to promote 

progress”); Diehr, 450 U. S., at 219 (STEVENS, J., dissenting) (it is necessary to have “rules that enable a conscientious patent lawyer to determine with a fair degree of 

accuracy” what is patentable). 

On one side of the balance is whether a patent monopoly

is necessary to “motivate the innovation,” Pfaff v. Wells 

Electronics, Inc., 525 U. S. 55, 63 (1998). Although there

is certainly disagreement about the need for patents,

scholars generally agree that when innovation is expensive, risky, and easily copied, inventors are less likely to 

undertake the guaranteed costs of innovation in order to 

obtain the mere possibility of an invention that others can 

copy.45 Both common sense and recent economic scholarship suggest that these dynamics of cost, risk, and reward 

—————— 

45See generally W. Landes & R. Posner, The Economic Structure of

Intellectual Property Law 13–15 (2003). 
Cite as: 561 U. S. ____ (2010) 41 

STEVENS, J., concurring in judgment 

vary by the type of thing being patented.46 And the functional case that patents promote progress generally is 

stronger for subject matter that has “historically been 

eligible to receive the protection of our patent laws,” Diehr, 

450 U. S., at 184, than for methods of doing business.

Many have expressed serious doubts about whether 

patents are necessary to encourage business innovation.47 

Despite the fact that we have long assumed business

methods could not be patented, it has been remarked that 

“the chief business of the American people, is business.”48 

Federal Express developed an overnight delivery service 

and a variety of specific methods (including shipping

through a central hub and online package tracking) without a patent. Although counterfactuals are a dubious form 

of analysis, I find it hard to believe that many of our entrepreneurs forwent business innovation because they 

could not claim a patent on their new methods.

“[C]ompanies have ample incentives to develop business 

methods even without patent protection, because the 

competitive marketplace rewards companies that use

more efficient business methods.” Burk & Lemley 1618.49 

Innovators often capture advantages from new business 

methods notwithstanding the risk of others copying their

innovation. Some business methods occur in secret and 

—————— 

46See, e.g., Burk & Lemley, Policy Levers in Patent Law, 89 Va.

L. Rev. 1575, 1577–1589 (2003) (hereinafter Burk & Lemley). 47See, e.g., Burk & Lemley 1618; Carrier, Unraveling the PatentAntitrust Paradox, 150 U. Pa. L. Rev. 761, 826 (2002) (hereinafter 

Carrier); Dreyfuss, Are Business Methods Patents Bad for Business?

16 Santa Clara Computer & High Tech. L. J. 263, 274–277 (2000)

(hereinafter Dreyfuss); Posner, The Law and Economics of Intellectual

Property, 131 Daedalus 5 (Spring 2002). 48C. Coolidge, The Press Under a Free Government, in Foundations

of the Republic: Speeches and Addresses 187 (1926). 49See also Pollack 75–76 (“Since business methods are ‘useful’ when 

they directly earn revenue, they are inherently unlikely to be underproduced”). 
42 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

therefore can be protected with trade secrecy.50 And for 

those methods that occur in public, firms that innovate 

often capture long-term benefits from doing so, thanks to

various first mover advantages, including lockins, branding, and networking effects.51 Business innovation, moreover, generally does not entail the same kinds of risk as 

does more traditional, technological innovation. It generally does not require the same “enormous costs in terms of

time, research, and development,” Bicron, 416 U. S., at 

480, and thus does not require the same kind of “compensation to [innovators] for their labor, toil, and expense,” 

Seymour v. Osborne, 11 Wall. 516, 533–544 (1871).52 

Nor, in many cases, would patents on business methods 

promote progress by encouraging “public disclosure.” 

Pfaff, 525 U. S., at 63; see also Brenner v. Manson, 383 

U. S. 519, 533 (1966) (“[O]ne of the purposes of the patent 

system is to encourage dissemination of information concerning discoveries and inventions”). Many business

methods are practiced in public, and therefore a patent 

does not necessarily encourage the dissemination of anything not already known. And for the methods practiced

in private, the benefits of disclosure may be small: Many

such methods are distributive, not productive—that is, 

they do not generate any efficiency but only provide a

means for competitors to one-up each other in a battle for

pieces of the pie. And as the Court has explained, “it is 

—————— 

50See R. Levin et al., Appropriating the Returns from Industrial Research and Development, in 3 Brookings Papers on Econ. Activity 794–

795 (1987). 51See Burk & Lemley 1618; Dreyfuss 275; see generally Carrier 821–

823. Concededly, there may some methods of doing business that do

not confer sufficient first-mover advantages. See Abramowicz & Duffy,

Intellectual Property for Market Experimentation, 83 N. Y. U. L. Rev. 

337, 340–342 (2008). 52See Burk & Lemley 1618; Carrier 826; Olson, Taking the Utilitarian Basis for Patent Law Seriously: The Case For Restricting Patentable Subject Matter, 82 Temp. L. Rev. 181, 231 (2009). 
Cite as: 561 U. S. ____ (2010) 43 

STEVENS, J., concurring in judgment 

hard to see how the public would be benefited by disclosure” of certain business tools, since the nondisclosure of 

these tools “encourages businesses to initiate new and 

individualized plans of operation,” which “in turn, leads to 

a greater variety of business methods.” Bicron, 416 U. S., 

at 483. 

In any event, even if patents on business methods were 

useful for encouraging innovation and disclosure, it would 

still be questionable whether they would, on balance, 

facilitate or impede the progress of American business. 

For even when patents encourage innovation and disclosure, “too much patent protection can impede rather than

‘promote the Progress of . . . useful Arts.’” Laboratory 

Corp. of America Holdings v. Metabolite Laboratories, Inc., 

548 U. S. 124, 126–127 (2006) (BREYER, J., dissenting 

from dismissal of certiorari). Patents “can discourage 

research by impeding the free exchange of information,”

for example, by forcing people to “avoid the use of potentially patented ideas, by leading them to conduct costly

and time-consuming searches of existing or pending patents, by requiring complex licensing arrangements, and by

raising the costs of using the patented” methods. Id., at 

127. Although “[e]very patent is the grant of a privilege of 

exacting tolls from the public,” Great Atlantic, 340 U. S., 

at 154 (Douglas, J., concurring), the tolls of patents on 

business methods may be especially high. 

The primary concern is that patents on business methods may prohibit a wide swath of legitimate competition

and innovation. As one scholar explains, “it is useful to 

conceptualize knowledge as a pyramid: the big ideas are

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 innovation.53 Thus, this Court stated in Benson 

—————— 

53See Dreyfuss 276; Merges & Nelson, On the Complex Economics of 
44 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

that “[p]henomena of nature . . . , mental processes, and 

abstract intellectual concepts are not patentable, as they 

are the basic tools of scientific and technological work,”

409 U. S., at 67; see also, Joseph E. Seagram & Sons, Inc., 

180 F. 2d, at 28 (“To give appellant a monopoly, through

the issuance of a patent, upon so great an area . . . would 

in our view impose without warrant of law a serious restraint upon the advance of science and industry”). Business methods are similarly often closer to “big ideas,” as

they are the basic tools of commercial work. They are

also, in many cases, the basic tools of further business

innovation: Innovation in business methods is often a 

sequential and complementary process in which imitation 

may be a “spur to innovation” and patents may “become an 

impediment.” Bessen & Maskin, Sequential Innovation,

Patents, and Imitation, 40 RAND J. Econ. 611, 613 

(2009).54 “Think how the airline industry might now be

structured if the first company to offer frequent flyer miles

had enjoyed the sole right to award them.” Dreyfuss 264.

“[I]mitation and refinement through imitation are both

necessary to invention itself and the very lifeblood of a 

competitive economy.” Bonito Boats, 489 U. S., at 146. 

If business methods could be patented, then many business decisions, no matter how small, could be 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, attempting to decide whether their innovation is 

one that remains in the public domain. See Long, Information Costs in Patent and Copyright, 90 Va. L. Rev. 465, 

—————— 

Patent Scope, 90 Colum. L. Rev. 839, 873–878 (1990). 54See also Raskind, The State Street Bank Decision, The Bad Business of Unlimited Patent Protection for Methods of Doing Business, 10

Fordham Intell. Prop. Media & Ent. L. J. 61, 102 (1999) (“Interactive 

emulation more than innovation is the driving force of business method

changes”). 
Cite as: 561 U. S. ____ (2010) 45 

STEVENS, J., concurring in judgment 

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 concealed liens and unknown liabilities to lawsuits and vexatious accountings for profits made in good faith.” Atlantic 

Works v. Brady, 107 U. S. 192, 200 (1883).55 

These effects are magnified by the “potential vagueness” 

of business method patents, eBay Inc., 547 U. S., at 397 

(KENNEDY, J., concurring). When it comes to patents,

“clarity is essential to promote progress.” Festo Corp., 535 

U. S., at 730–731. Yet patents on methods of conducting

business generally are composed largely or entirely of 

intangible steps. Compared to “the kinds of goods . . . 

around which patent rules historically developed,” it thus

tends to be more costly and time consuming to search

through, and to negotiate licenses for, patents on business

methods. See Long 539, 470.56 

The breadth of business methods, their omnipresence in

our society, and their potential vagueness also invite a

particularly pernicious use of patents that we have long 

criticized. As early as the 19th century, we explained that 

the patent laws are not intended to “creat[e] a class of 

—————— 

55There is substantial academic debate, moreover, about whether the 

normal process of screening patents for novelty and obviousness can

function effectively for business methods. The argument goes that

because business methods are both vague and not confined to any one 

industry, there is not a well-confined body of prior art to consult, and

therefore many “bad” patents are likely to issue, a problem that would

need to be sorted out in later litigation. See, e.g., Dreyfuss 268–270;

Eisenberg, Analyze This: A Law and Economics Agenda for the Patent

System, 53 Vand. L. Rev. 2081, 2090 (2000); Merges 589–590. 56See also J. Bessen & M. Meurer, Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk 46–72 (2008) (hereinafter Bessen & Meurer); P. Menell & S. Scotchmer, Intellectual Property

Law, in 2 Handbook of Law and Economics 1500–1501, 1506 (M. 

Polinsky & S. Shavell eds. 2007). Concededly, alterations in the remedy structure, such as the First Inventor Defense Act of 1999, §4301 et 

seq., 113 Stat. 1536, codified at 35 U. S. C. §273, mitigate these costs. 
46 BILSKI v. KAPPOS 

STEVENS, J., concurring in judgment 

speculative schemers who make it their business to watch 

the advancing wave of improvement, and gather its foam

in the form of patented monopolies, which enable them to 

lay a heavy tax upon the industry of the country, without 

contributing anything to the real advancement of the 

arts.” Atlantic Works, 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 KENNEDY, J.).

These many costs of business method patents not only 

may stifle innovation, but they are also likely to “stifle 

competition,” Bonito Boats, 489 U. S., at 146. Even if a 

business method patent is ultimately held invalid, patent

holders may be able to use it to threaten litigation and to 

bully competitors, especially those that cannot bear the 

costs of a drawn out, fact-intensive patent litigation.57 

That can take a particular toll on small and upstart businesses.58 Of course, patents always serve as a barrier to

competition for the type of subject matter that is patented. 

But patents on business methods are patents on business 

itself. Therefore, unlike virtually every other category of 

patents, they are by their very nature likely to depress the

dynamism of the marketplace.59 

—————— 

57See generally Farrell & Shapiro, How Strong Are Weak Patents?

98 Amer. Econ. Rev. 1347 (2008); Meurer, Controlling Opportunistic

and Anti-Competitive Intellectual Property Litigation, 44 Boston 

College L. Rev. 509 (2003); Moore, Populism and Patents, 82 N. Y.

U. L. Rev. 69, 90–91 (2007). 58See Bessen & Meurer 176; Lessig, The Death of Cyberspace, 57

Wash. & Lee L. Rev. 337, 346–347 (2000). 59Congress and the courts have worked long and hard to create and 

administer antitrust laws that ensure businesses cannot prevent each

other from competing vigorously. If methods of conducting business 

were themselves patentable, then virtually any novel, nonobvious 

business method could be granted a federally protected monopoly. The 

tension this might create with our antitrust regime provides yet another reason for skepticism that Congress would have wanted the 

patent laws to extend to business methods. 
Cite as: 561 U. S. ____ (2010) 47 

STEVENS, J., concurring in judgment 

* * * 

The constitutional standard for patentability is difficult 

to apply with any precision, and Congress has significant 

discretion to “implement the stated purpose of the Framers by selecting the policy which in its judgment best 

effectuates the constitutional aim,” Graham, 383 U. S., at 

6. But Congress has not, either explicitly or implicitly, 

determined that patents on methods of doing business 

would effectuate this aim. And as I understand their 

practical consequences, it is hard to see how they would. 

VII 

The Constitution grants to Congress an important 

power to promote innovation. In its exercise of that power,

Congress has established an intricate system of intellectual property. The scope of patentable subject matter 

under that system is broad. But it is not endless. In the 

absence of any clear guidance from Congress, we have only 

limited textual, historical, and functional clues on which 

to rely. Those clues all point toward the same conclusion:

that petitioners’ claim is not a “process” within the meaning of §101 because methods of doing business are not, in

themselves, covered by the statute. In my view, acknowledging as much would be a far more sensible and restrained way to resolve this case. Accordingly, while I

concur in the judgment, I strongly disagree with the

Court’s disposition of this case. 
_________________ 

_________________ 

Cite as: 561 U. S. ____ (2010) 1 

BREYER, J., concurring in judgment 

SUPREME COURT OF THE UNITED STATES 

No. 08–964 

BERNARD L. BILSKI AND RAND A. WARSAW, 

PETITIONERS v. DAVID J. KAPPOS, UNDER 

SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR, 

PATENT AND TRADEMARK OFFICE

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE FEDERAL CIRCUIT

[June 28, 2010] 

JUSTICE BREYER, with whom JUSTICE SCALIA joins as to

Part II, concurring in the judgment. 

I 

I agree with JUSTICE STEVENS that a “general method of

engaging in business transactions” is not a patentable 

“process” within the meaning of 35 U. S. C. §101. Ante, at 

2 (STEVENS, J., concurring in judgment). This Court has 

never before held that so-called “business methods” are 

patentable, and, in my view, the text, history, and purposes of the Patent Act make clear that they are not. 

Ante, at 10–47. I would therefore decide this case on that 

ground, and I join JUSTICE STEVENS’ opinion in full. 

I write separately, however, in order to highlight the

substantial agreement among many Members of the Court

on many of the fundamental issues of patent law raised by 

this case. In light of the need for clarity and settled law in

this highly technical area, I think it appropriate to do so. 

II 

In addition to the Court’s unanimous agreement that

the claims at issue here are unpatentable abstract ideas, it 

is my view that the following four points are consistent 
2 BILSKI v. KAPPOS 

BREYER, J., concurring in judgment 

with both the opinion of the Court and JUSTICE STEVENS’ 

opinion concurring in the judgment: 

First, although the text of §101 is broad, it is not without limit. See ante, at 4–5 (opinion of the Court); ante, at 

10 (STEVENS, J., concurring in judgment). “[T]he underlying 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.” Graham v. John Deere Co. of 

Kansas City, 383 U. S. 1, 10–11 (1966) (quoting Letter 

from Thomas Jefferson to Isaac McPherson (Aug. 13,

1813), in 6 Writings of Thomas Jefferson 181 (H. Washington ed.)). The Court has thus been careful in interpreting

the Patent Act to “determine not only what is protected,

but also what is free for all to use.” Bonito Boats, 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 discovered, mental processes, and 

abstract intellectual concepts are not patentable” under 

§101, since allowing individuals to patent these fundamental principles would “wholly pre-empt” the public’s

access to the “basic tools of scientific and technological

work.” Gottschalk v. Benson, 409 U. S. 63, 67, 72 (1972); 

see also, e.g., Diamond v. Diehr, 450 U. S. 175, 185 (1981); 

Diamond v. Chakrabarty, 447 U. S. 303, 309 (1980). 

Second, in a series of cases that extend back over a 

century, the Court has stated that “[t]ransformation and 

reduction of an article to a different state or thing is the 

clue to the patentability of a process claim that does not 

include particular machines.” Diehr, supra, at 184 (emphasis added; internal quotation marks omitted); see also, 

e.g., Benson, supra, at 70; Parker v. Flook, 437 U. S. 584, 

588, n. 9 (1978); Cochrane v. Deener, 94 U. S. 780, 788 

(1877). Application of this test, the so-called “machine-ortransformation test,” has thus repeatedly helped the Court

to determine what is “a patentable ‘process.’” Flook, supra, 
Cite as: 561 U. S. ____ (2010) 3 

BREYER, J., concurring in judgment 

at 589. 

Third, while the machine-or-transformation test has 

always been a “useful and important clue,” it has never

been the “sole test” for determining patentability. Ante, at 

8; see also ante, at 1 (STEVENS, J., concurring in judgment); Benson, supra, at 71 (rejecting the argument that

“no process patent could ever qualify” for protection under 

§101 “if it did not meet the [machine-or-transformation] 

requirements”). Rather, the Court has emphasized that a

process claim meets the requirements of §101 when, “considered as a whole,” it “is performing a function which the

patent laws were designed to protect (e.g., transforming or 

reducing an article to a different state or thing).” Diehr, 

supra, at 192. The machine-or-transformation test is thus 

an important example of how a court can determine patentability under §101, but the Federal Circuit erred in this

case by treating it as the exclusive test. 

Fourth, although the machine-or-transformation test is 

not the only test for patentability, this by no means indicates that anything which produces a “‘useful, concrete, 

and tangible result,’” State Street Bank & Trust Co. v. 

Signature Financial Group, Inc., 149 F. 3d 1368, 1373 (CA 

Fed. 1998), is patentable. “[T]his Court has never made

such a statement and, if taken literally, the statement

would cover instances where this Court has held the contrary.” Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., 548 U. S. 124, 136 (2006) (BREYER, 

J., dissenting from dismissal of certiorari as improvidently 

granted); see also, e.g., O’Reilly v. Morse, 15 How. 62, 117 

(1854); Flook, supra, at 590. Indeed, the introduction of 

the “useful, concrete, and tangible result” approach to

patentability, associated with the Federal Circuit’s State 

Street decision, preceded the granting of patents that 

“ranged from the somewhat ridiculous to the truly absurd.” In re Bilski, 545 F. 3d 943, 1004 (CA Fed. 2008)

(Mayer, J., dissenting) (citing patents on, inter alia, a 
4 BILSKI v. KAPPOS 

BREYER, J., concurring in judgment 

“method of training janitors to dust and vacuum using 

video displays,” a “system for toilet reservations,” and a 

“method of using color-coded bracelets to designate dating

status in order to limit ‘the embarrassment of rejection’”); 

see also Brief for Respondent 40–41, and n. 20 (listing

dubious patents). To the extent that the Federal Circuit’s 

decision in this case rejected that approach, nothing in

today’s decision should be taken as disapproving of that 

determination. See ante, at 16; ante, at 2, n. 1 (STEVENS, 

J., concurring in judgment). 

In sum, it is my view that, in reemphasizing that the

“machine-or-transformation” test is not necessarily the 

sole test of patentability, the Court intends neither to deemphasize the test’s usefulness nor to suggest that many 

patentable processes lie beyond its reach. 

III 

With these observations, I concur in the Court’s 

judgment.