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En Banc Federal Circuit to Reconsider Patentable Subject Matter of Business Methods

By William F. Heinze

Taking sua sponte action, the Federal Circuit has ordered an en banc rehearing of the In re Biliski case with regard to the following five questions concerning claim 1 of U.S. patent Application No. 08/833,892:

1. A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:

(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;

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

(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.

The parties are requested to file supplemental briefs that should address the following questions:

1. Whether claim 1 of the 08/833,892 patent application claims patent-eligible
   subject matter under 35 U.S.C. § 101?
2. What standard should govern in determining whether a process is patent-eligible subject matter under section 101?
3. Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that contains both mental and physical steps create patent-eligible subject matter?
4. Whether a method or process must result in a physical transformation of an
   article or be tied to a machine to be patent-eligible subject matter under section 101?
5. Whether it is appropriate to reconsider State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?

According to Professor Crouch,

In its opposition brief, the PTO argues that there are several Section 101 reasons to eliminate the Bilski application. First, according to the PTO, the claimed method does not qualify as a statutory ?process.? Rather, statutory processes have always been associated with physical transformation or machine implementation ? details missing from Bilski?s claims. In addition, the PTO argues that Bilski?s claim is an abstract idea because it is merely a ?disembodied concept? that would preempt an entire field of commodities trading. Regarding State Street, the PTO would limit the the requirement of a ?useful, concrete, and tangible result? to computer implemented inventions that employ a mathematical algorithm.

(Thanks to Chad Wieland for passing along a copy of the Order.)

Full post as published by I/P Updates on February 15, 2008 (boomark / email).