Source: http://www2.bloomberglaw.com/public/desktop/document/Bilski_v_Kappos_130_S_Ct_3218_177_L_Ed_2d_792_2010_Court_Opinion
Timestamp: 2013-05-23 04:41:30
Document Index: 378507750

Matched Legal Cases: ['§101', '§101', '§100', '§100', '§273', '§101', '§101', '§101', '§100', '§273', '§101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 102', '§ 103', '§ 112', '§ 100', '§ 101', '§ 101', '§ 101', '§ 100', '§ 100', '§ 273', '§ 101', '§ 273', '§ 101', '§ 101', '§ 100', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 102', '§ 103', '§ 112', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 100', '§ 101', '§ 100', '§ 101', '§ 273', '§\n273', '§ 273', '§ 101', '§ 273', '§ 273', '§ 101', '§ 101', '§ 102', '§\n103', '§ 112', '§\n101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 100', '§ 101', '§ 101', '§ 101', '§ 273', '§ 273', '§ 273', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 112', '§ 101', '§ 101', '§ 102', '§ 101', '§ 8', '§ 101', '§ 102', '§\n103', '§ 100', '§ 101', '§ 100', '§ 100', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§\n101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 1', '§ 6', '§ 8', '§ 18', '§ 22', '§ 39', '§ 5', '§ 101', '§ 100', '§\n101', '§ 101', '§ 101', '§ 100', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 273', '§ 273', '§ 273', '§ 101', '§ 101', '§\n101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 273', '§ 46', '§ 273', '§ 273', '§ 273', '§ 101', '§ 101', '§ 8', '§ 101', '§ 8', '§ 101', '§ 101', 'Arts 12', '§ 26', '§ 101', '§ 101', '§ 101', '§ 101', '§ 4301', '§ 273', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§\n101']

Bilski v. Kappos, 130 S. Ct. 3218, 177 L. Ed. 2d 792, 95 U.S.P.Q.2d 1001, 2010 ILRC 2097, 30 ILRD 8 (2010), Court Opinion
Bilski v. Kappos, 130 S. Ct. 3218, 177 L. Ed. 2d 792, 95 U.S.P.Q.2d 1001, 2010 ILRC 2097, 30 ILRD 8 (2010) [2010 BL 146286]
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.
[**3220] [*1002] Hide Headnotes
The Federal Circuit's so-called "machine-or-transformation test" [26 ILR 1, 545 F3d 943] is not the sole test to be used for determining the patentability of a "process"
under the Patent Act, 35 USC §101. Rather, it is only "a useful and important clue or investigative tool" for determining whether process claims are directed to statutory
subject matter under §101. Under the machine-or-transformation
test, 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. Adopting the machine-or-transformation test as the sole test for what constitutes a "process" violates principles of statutory interpretation, for nothing in the definitional terms of "process" found in §100(b)—i.e., "process, art or method"—would require these terms to be tied to a machine or to transform an article. 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," may include at least some methods of doing business. A conclusion that business methods are not patentable in any circumstances would render meaningless §273, which 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. Even though the claimed process at issue here—a method of hedging risk in the field of commodities trading—is not categorically outside of §101, petitioners' claims are not patentable processes because they are attempts to patent abstract ideas. U.S. Patents Quarterly
Business methods are not categorically excluded from qualifying as patentable “processes” under 35 U.S.C. §101, since term “method” is within definition of “process”
set forth in 35 U.S.C. §100(b), and there is no ordinary, contemporary, common meaning of word “method” that excludes business methods, since it is unclear how far prohibition on business method patents would reach, and whether it would exclude technologies for conducting business more efficiently, and since federal law, in 35 U.S.C. §273, explicitly contemplates existence of at least some business method patents, and conclusion that business methods are unpatentable under any circumstances would render Section 273 meaningless. [4] Patent grant — Inventions patentable ►105.05 [Show Topic Path]
Claimed method of hedging risk in field of commodities trading is not drawn to patent-eligible “process” under 35 U.S.C. §101, since one claim of patent describes basic concept of hedging, and second claim reduces concept to simple mathematical formula, since concept of hedging is unpatentable abstract idea, and allowing applicants to patent risk-hedging would preempt use of this approach in all fields, and would effectively grant monopoly over abstract idea, and since remaining claims are broad examples of how hedging can be used in commodities and energy markets, but limiting abstract idea to one field of use or adding token post-solution components does not make concept patentable. 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 [**3221] 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.
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.
[*1003] (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 [***797] 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 [****2] 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.
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 [**3222] or
exclusive. See, e.g., Parker v. Flook, 437 U. S. 584, 588, n. 9. Pp.
(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 [***798] 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. [1] A [****3] 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. ___, ___. [2] 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 [*1004] § 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 well-known 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. 12-15.
(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-or-transformation 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 [**3223] 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
[***799] JUSTICE KENNEDY delivered the opinion of the Court, except as to
Parts II-B-2 and II-C-2.[fn*]
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 [****4] 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,
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
"(a) initiating a series of transactions between
said commodity provider and consumers of said
commodity wherein said consumers purchase said
commodity [**3224] at a fixed rate based upon historical
position of said consumers;
"(b) identifying market participants for said
commodity having a counter-risk position to said
"(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
[*1005] 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
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 [***800] 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
Chief Judge Michel wrote the opinion of the court. The court rejected
its prior test for determining [****5] 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
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. 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
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 [**3225] only that the issue should be remanded for further
proceedings to determine whether the application qualified as patentable
under other provisions. Id., at 997.
Section 101 defines the subject matter that may be patented under
the Patent Act:
obtain a patent therefor, subject to the conditions
and requirements of this title."
[3] 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). [***801] [4] 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
Jefferson 75-76 (H. Washington ed. 1871)).
[5] The Court's precedents provide three specific exceptions to § 101's
broad patent-eligibility [*1006] 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 [****6] 150 years. See Le Roy v.
Tatham, 14 How. 156, 174-175 (1853). [6] 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).
[7] 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.
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
545 F. 3d, at 954. [**3226] [8] 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). [9] 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 [***802] 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.
[2] Adopting the machine-or-transformation test as the sole
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 [****7] 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. [10] 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). [11] This canon is inapplicable
[*1007] 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"
The Court of Appeals incorrectly concluded that this Court has endorsed
the machine-or-transformation test as the exclusive test. [12] 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. [13] Gottschalk v. Benson, 409 U. S. 63, 70
(1972), [**3227] noted 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." [14] 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 [***803] test]." 437 U. S., at 588, n. 9.
This Court's precedents establish that the machine-or-transformation
test is a useful and important clue, an investigative tool, for
determining whether some claimed inventions are processes under § 101.
[15] The machine-or-transformation test is not the sole test for deciding
whether an invention is a patent-eligible "process."
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 [****8] rubber that included a computer program
is within patentable subject matter). [16] Section 101 is a "dynamic provision
designed to encompass new and unforeseen inventions." J. E. M. Ag
Supply, Inc. v. Pioneer Hi-Bred Int'l, Inc., 534 U. S. 124, 135 (2001). [17] A
categorical rule denying patent protection for "inventions in areas not
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 "[**3228] process[es]," it may not
make sense to require courts to confine themselves to asking the
questions posed by the machine-or-transformation test. [18] Section 101's
[***804] 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").
[*1008] It is important to emphasize that the Court today is not commenting on
the patentability of any particular invention,
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.
[19] [3] Section 101 similarly precludes the broad contention that the term
"process" categorically excludes business methods. The term "method,"
which is [****9] 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
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. [20] 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 [***805] 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). [**3229] 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
Interpreting § 101 to exclude all business methods simply because
business method patents were rarely issued
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 [****10] 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 [*1009] be flooded
with claims that would put a chill on creative endeavor and dynamic
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
present in patent law, between stimulating innovation by protecting
inventors and impeding progress by granting patents when not justified by
the statutory design.
[4] Even though petitioners' application is not categorically outside of §
101 under the two broad and atextual approaches the Court rejects today,
[***806] 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 [**3230] 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. [21] 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 [****11] 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.
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. [22] 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. [23] 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 [***807] raw, uncured synthetic rubber into
cured precision products," using a mathematical [*1010] formula to complete some
of its several steps by way of a computer. 450 U. S., at 177. [24] 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. [25] Diehr emphasized
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.
[**3231] [26] 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 [****12] 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
[27] 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
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
And nothing in today's opinion [***808] 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
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-or-transformation test is the exclusive test for what
constitutes a patentable "process" under 35 U.S.C. § 101. It would be
possible [**3232] to answer that question simply by holding, as the entire [****13] 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, [*1011] 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,
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-or-transformation test is
not the sole test for what constitutes a patentable process; rather, it
is a critical [***809] clue.[fn1] 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
business does not qualify as a "process" under § 101.
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,"
commodity at a [****14] fixed rate based upon historical
[**3233] averages, said fixed rate corresponding to a risk
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
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 [*1012] 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
[***810] 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 patenteligible
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, [****15] 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
"[**3234] 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
state or thing." Id., at 954-955. The court further concluded that this
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. [***811] Judge Dyk observed,
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 [*1013] 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 [****16] in reliance on those decisions, id., at 992-994.
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.
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)). [**3235] 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
[***812] 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 (" [28] This Court's
precedents establish that the machine-or-transformation test is a useful
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-or-transformation test remains an important test for
patentability. Few, if any, processes cannot effectively be evaluated
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 [****17] 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,
that petitioners' application is phrased broadly. See [*1014] ante, at 14-15. But
claim specification is covered by § 112, not § 101; and if a series of
steps constituted an [**3236] unpatentable idea merely because it was described
without sufficient specificity, the Court could be calling into question
some of [***813] our own prior decisions.[fn2] 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
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.
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
[****18] 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 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).
[***814] Nonetheless, not every new invention or discovery [**3237] may be patented.
Certain things are "free for all to use." Bonito Boats, Inc. v. Thunder
Craft Boats, Inc., 489 U. S. 141, 151 (1989).[fn3]
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 [*1015] 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
With that understanding in mind, the Government has
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,
[****19] 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.
[***815] 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 [**3238] 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
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.[fn4] 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
patent-eligible. I am confident that the term "process" in § 101 is not
nearly so capacious.[fn5]
[*1016] 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, [***816] common meaning." As noted earlier, the Court accepts a role
for the "atextual" machine-or-transformation "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 [**3239] they can be colloquially described [****20] as such.[fn6] 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
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).
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:
American Patent Law and Administration, 1789-1836, p. 109 (1998)
(hereinafter Walterscheid, To Promote the Progress).[fn7] The [**3240] governing
English law, the Statute of Monopolies, responded to abuses whereby the
Crown [*1017] 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 [****21] 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, [fn8] as
well as a variety of patents issued for methods of synthesizing
substances or building mechanical devices.[fn9]
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.[fn10] There was
some debate throughout the relevant time period [***818] 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).[fn11]
There were a small number of patents issued between 1623 and 1790
relating to banking or lotteries and one for a method [**3241] of life insurance,
[fn12] but these did not constitute
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 privileges[fn13]
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.[fn14] 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.[fn15]
[*1018] 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, [fn16] the American drafters probably
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
[***819] business organization, [fn17] business models, [fn18] management
techniques, [**3242] [fn19] and novel solutions to the challenges of operating
global firms in which subordinate managers could be reached only by a
long sea voyage.[fn20] Few if any of these methods of conducting business
were patented.[****22] [fn21]
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.
[fn22] We do know that the Clause passed without objection or debate.[fn23]
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."[fn24] Indeed, at the ratification conventions,
some States recommended amendments that would have prohibited Congress
from granting "`exclusive advantages of commerce.'"[fn25] If the original
understanding of the Patent
Clause included the authority to patent methods of doing business,
it might not have passed so quietly.
[***820] In 1790, Congress passed the first Patent Act, an "Act to promote
the progress of useful [*1019] 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 [**3243] 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
law," Chakrabarty, 447 U. S., at 316. It appears, however, that
regardless of how one construes the term "useful arts," business methods
Noah Webster's first American dictionary[fn26] 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, [fn27] Webster's definition likely conveyed a message similar to
the meaning of the word "manufactures" in [****23] the earlier English statute.
And we know that the term "useful arts" was used in the founding era to
refer to [***821] manufacturing and similar applied trades.[fn28] See Coulter, [**3244] The
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 [*1020] 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."[fn29]
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 [***822] 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 [**3245] 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
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 [****24] as absurd for an
entrepreneur to file a patent" on methods of conducting business. Ibid.
During the first years of the patent system, no patents were issued on
methods of doing business.[fn30] 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.[fn31]
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
should be patentable.[*1021] [fn32] 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 [***823] 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" [**3246] 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,
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 [****25] 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, [fn33] 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]."
[***824] 1 A. Deller, Walker on Patents § 18, p. 62 (1937).[fn34] 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. [*1022] Moy, Walker
on Patents § 5:28, p. 5-104 (4th ed. 2009).[fn35]
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
statutory designation of a new and useful art").[fn36] 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).[***825] [fn37]
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 [****26] 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 "process"
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 [**3248] the New York Patent Law Association 7-8 (Nov.
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.[fn38] 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").[fn39] Indeed, [*1023] Judge
Rich, the main drafter
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,
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] [***826] of our times, the diaper service."
Ibid.[fn40]
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 then-existing 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
This reliance is misplaced. We have never understood
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 [**3249] 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 [****27] 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
opinion below, the phrase "made by man" "is reminiscent" of a 1790's
description of the [***827] 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)).
[*1024] 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 machine-or-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" [**3250] under [****28] § 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
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
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 [***828] 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
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 mid-20th century, the [*1025] First Inventor Defense Act
does not [****29] 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 [**3251] § 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 (1999).[fn41]
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 [***829] 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
applied to different statutes.[fn42] 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 [**3252] in legal circles at the time.[fn43] 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
that the 1999 Congress would [****30] 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
[*1026] [*1027] should be focusing our attention on § 101 itself.
[***830] 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").[fn44]
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. [**3253] 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 [***831] 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
swath of technological [****31] 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. [29] 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.[fn45] Both common sense and recent
economic scholarship suggest that these dynamics of cost, risk, and
vary by the type of thing being patented.[fn46] And the functional [**3254] case
that patents promote progress generally is stronger for subject matter
patent laws," Diehr, 450 U. S., at 184, than for methods of doing
Many have expressed serious doubts about whether patents are necessary
to encourage business innovation.[fn47] Despite the fact that we [***832] have
long assumed business methods could not be patented, it has been remarked
that "the chief business of the American people, is business."[fn48]
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.[fn49] Innovators often capture advantages from new business methods
notwithstanding the risk of others copying their innovation. Some
business methods occur in secret and
therefore can be protected with trade secrecy.[fn50] And for those
methods that occur in public, firms [****32] that innovate often capture long-term
benefits from doing so, thanks to various first mover advantages,
including lockins, branding, and networking effects.[fn51] 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).[fn52]
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 [**3255] 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 [*1028] 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,
hard to see how the [***833] 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.[fn53] Thus,
this Court stated in Benson
that "[p]henomena [****33] 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).[fn54]
"Think [**3256] how the airline industry might now be structured if the first
[***834] 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. [*1029] 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,
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).[fn55]
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.[fn56]
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
speculative schemers who make it their business to watch the advancing
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. [****34] See eBay Inc., 547 U. S., at 396-397
These many costs of business method patents not only may stifle
[***835] innovation, but [**3257] 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.[fn57] That can take a
particular toll on small and upstart businesses.[fn58] 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.[fn59]
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 [*1030] on methods of doing business would effectuate this aim. And as I
understand their practical consequences, it is hard to see how they
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.
[fn1] Even 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.
[fn2] For 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
[fn3] The 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.
[fn4] For 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).
[fn5] The 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.
Cf. ante, at 12-13 (plurality opinion). A great deal of human activity
was at some time novel and nonobvious.
[fn6] Curiously, 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."
[fn7] See Pennock v. Dialogue, 2 Pet. 1, 18 (1829) ("[M]any of the
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).
[fn9] See, 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,
1660-1800, pp. 84-93, 100-104, 109-110, 152-155 (1988) (listing patents)
(hereinafter MacLeod).
[fn10] Some 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.,
Cloth-workers 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").
[fn11] See 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).
[fn12] See id., at 95; B. Woodcroft, Alphabetical Index of Patentees of
Victoriae) 383, 410 (2d ed. 1969) (hereinafter Woodcroft).
[fn13] See, e.g., C. Ewen, Lotteries and Sweepstakes 70-71 (1932) (de
scribing the "letters patent" to form a colony in Virginia and to operate
lotteries to fund that colony).
[fn14] See 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).
[fn15] "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.
[fn16] See 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
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").
[fn17] See, 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).
[fn18] See 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).
[fn19] See, 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).
[fn20] See, 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).
[fn21] Nor, 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
Enterprise: Merchants and Economic Development in Revolutionary
Philadelphia 291 (1986) (describing new methods of conducting and
financing trade with China).
[fn22] See Seidel, The Constitution and a Standard of Patentability, 48
J. Pat. Off. Soc. 5, 10 (1966) (hereinafter Seidel); Walterscheid, To Pro
mote 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).
[fn23] Walterscheid, Background and Origin 26; 2 Records of the Federal
Convention of 1787, pp. 509-510 (M. Farrand ed. 1966).
[fn24] J. Madison, Notes of Debates in the Federal Convention of 1787,
pp. 638-639 (Ohio Univ. Press ed. 1966).
[fn25] See 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, D. D., 6 id., at 303, 303.
[fn26] Some 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.
[fn27] See, 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.
[fn28] For 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 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").
[fn29] See, 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
chemistry, 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).
[fn30] See Walterscheid, To Promote the Progress 173-178; Pollack
[fn31] These 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
[fn32] A 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).
[fn33] See, 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.
[fn34] See 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
[fn35] Although 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 self-registration 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.
[fn36] For examples of such usage, see The Telephone Cases,
126 U. S., at 533, and Burden, 15 How., at 267.
[fn37] See also 98 Cong. Rec. A415 (1952) (remarks of Rep. Bryson)
(de scribing, 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").
[fn38] The 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").
[fn39] As explained in Part II, supra, the Court engages in a
Jekyll-and-Hyde 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 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").
[fn40] Forty 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.
[fn41] See 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").
[fn42] The 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.
[fn43] I am not trying to "overcome" an "established rule of statutory in
terpretation" 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.
[fn44] See 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
[fn45] See generally W. Landes & R. Posner, The Economic Structure
of Intellectual Property Law 13-15 (2003).
[fn46] See, e.g., Burk & Lemley, Policy Levers in Patent Law,
89 Va. L. Rev. 1575, 1577-1589 (2003) (hereinafter Burk & Lemley).
[fn47] See, e.g., Burk & Lemley 1618; Carrier, Unraveling the
Patent-Antitrust 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).
[fn48] C. Coolidge, The Press Under a Free Government, in Foundations of
the Republic: Speeches and Addresses 187 (1926).
[fn49] See also Pollack 75-76 ("Since business methods are `useful'
when they directly earn revenue, they are inherently unlikely to be
under produced").
[fn50] See R. Levin et al., Appropriating the Returns from Industrial
Research and Development, in 3 Brookings Papers on Econ. Activity 794-795
[fn51] See 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).
[fn52] See 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).
[fn53] See Dreyfuss 276; Merges & Nelson, On the Complex Economics
of Patent Scope, 90 Colum. L. Rev. 839, 873-878 (1990).
[fn54] See 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
[fn55] There 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.
[fn56] See 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.
[fn57] See 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).
[fn58] See Bessen & Meurer 176; Lessig, The Death of Cyberspace,
57 Wash. & Lee L. Rev. 337, 346-347 (2000).
[fn59] Congress 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 an other reason for
skepticism that Congress would have wanted the patent laws to extend to
JUSTICE BREYER, with whom JUSTICE SCALIA joins as to Part II,
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 [***836] 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. [**3258] I would therefore
decide this case on that ground, and I join JUSTICE STEVENS' opinion in
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
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
with both the opinion of the Court [****35] and JUSTICE STEVENS' opinion
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-or-transformation test," has thus repeatedly
helped the Court to determine what is "a patentable `process.'" Flook,
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 [***837] patentability. Ante, at 8; see also ante, at 1 (STEVENS, J.,
concurring in judgment); Benson, supra, at 71 (rejecting the argument
[*1031] 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. [**3259] 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 [****36] 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
"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 de-emphasize the test's
usefulness nor to suggest that many patentable processes lie beyond its
III With these observations, I concur in the Court's