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Page Number: 24

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  out-
comes.  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 appa-
ratus  and  merely  manipulates  [an]  abstract  idea  and 
solves a purely mathematical problem without any limita-
tion 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  posi-
tion  that  a  patentable  process  must  relate  to  “technologi-
cal arts” or be performed on a machine.  Id., at 180a–181a. 
Instead, the Board denied petitioners’ patent on two alter-
native,  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  Ap-
peals 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  stan-
dard  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  transforma-
tion  of  an  article  or  be  tied  to  a  machine  to  be  patent-