The PTO posting in its entirety:

Recently, the media has focused on the pending In re Bilski case in the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., which is an appeal from a decision by the United States Patent and Trademark Office (USPTO). After a full-court hearing on May 8, many reporters and bloggers have speculated that this case will lead to the end of business method patents. To help USPTO Weekly readers get a better understanding about the Bilski appeal, the Weekly investigated the case.

Since the Federal Circuit's 1998 State Street ruling (State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998)), which opened the door to business method patents, and AT&T decision (AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1532 (Fed. Cir. 1999)), the USPTO has been inundated with a large number of "nontraditional" applications. Such applications have ranged from legal methods, to methods of holding conversations, to a method for selecting a jury.

The USPTO has done its best to follow the guidance in State Street and AT&T, which some believe state that any useful series of steps is patent-eligible. However, the USPTO does not believe that such a broad reading of those rulings is consistent with the Supreme Court's views on the eligibility of "process" patents, as set forth in Diamond v. Diehr, 450 U.S. 175 (1981).

The Bilski case challenges the USPTO's decision to reject Bilski and Warsaw's patent application on a method for financial hedging. The application broadly claimed a series of results that essentially calls for one party to enter into two sets of transactions. The Board of Patent Appeals and Interferences upheld the examiner's decision that the claims were not patentable for failing to comply with the Diehr test for process patents, which requires the process to either transform matter into a different state or thing, or be tied to a particular apparatus or machine.

Bilski and Warsaw are challenging the rejection in the appeals court, while the USPTO is defending its rejection and position that a "process" patent must adhere to the Diehr test. While the USPTO is not challenging the validity of business method patents per se, the appeals court has indicated that it might use the case as a springboard to possibly reconsider the State Street ruling.

Many industries are split on the issue; businesses such as Bank of America and Wachovia are championing the court to overturn State Street, but other businesses such as American Express-with millions of investment in business method patents on the line-are hoping the court will embrace a broad reading of State Street that will permit any useful business method to be eligible for a patent. So, while the country waits for a decision on Bilski and possibly greater guidance for patent-eligibility within the next few months, the future of business method patents remains uncertain.

Previous Patent Prospector coverage on Bilski: May 12, 2008; February 19, 2007.