Business patents involving abstract ideas have been limited by a recent court decision. Relying heavily on 1970s-era U.S. Supreme Court determination that established the “machine-or-transformation test,” Chief Judge Paul Michel wrote for a nine-judge majority that Bilskis patent application did not meet this definition of “process” under patent law.

The court affirmed the U.S. Patent and Trademark Offices denial of Bilskis patent, saying the agencys interpretation of the “process” was correct.

Consulting firm Accenture and banking company Goldman Sachs Group Inc., among others, believed that processes like Bilskis should be eligible for patents.

Denying the patent “eliminates a whole class of innovations from protection - business methods that rely on humans for execution,” Accenture wrote in a fact sheet arguing for reversal of the patent offices decision.

But Bank of America Corp., Wachovia Corp. and a host of other companies argued in court briefs that allowing abstract ideas to be patented “hinders rather than promotes innovation.”

Companies that rely on computer-related patents could take heart from the courts statement that processing data counts as “transformation,” making them patent-eligible. But the court punted on the question of whether mentioning a computer is enough to argue that a process involves a machine.

Two judges filed long dissents, arguing the decision could disrupt industries operating with patents that could be affected by the decision.

Source: caang