Supreme Court rules against Bilski, opens opportunity for future protection of business methods

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The U.S. Supreme Court ruled against two men who sought to patent a system for hedging energy trades, while leaving the door open to allowing limited legal protections for registering business methods.

The ruling in the so-called Bilski case was the first time in 29 years that the court voted on what types of innovations qualify for legal protection. While the decision was unanimous, the justices divided 5-4 in their reasoning, with the majority declining to bar all patents on methods of conducting business.

“This is a victory for people in favor of broader patents generally, including software,” said patent lawyer Edward Reines of Weil Gotshal in California, who was watching the case. “The stakes are high, the technology is evolving rapidly and it’s really difficult to make all-purpose rules in this area.”

The justices voting in the majority said there needs to be a flexible test for emerging technologies. The case drew record interest for a business dispute before the highest U.S. court, with Microsoft Corp. and Morgan Stanley among dozens of companies filing briefs. The fight split industries, dividing companies that rely on their own intellectual property from those aiming to head off expensive infringement lawsuits.

Full story: Business Method Patents Limited by U.S. Supreme Court — BusinessWeek