By: Shahrokh Falati, Ph.D.

On June 28, 2010, the U.S. Supreme Court issued its long awaited decision in In re Bilski. The decision broadly addresses the eligibility of patentable subject matter under 35 U.S.C. §101, and has implications for stake holders in the biotechnology and medical diagnostic industry. The Court decided that eligibility of patentable subject matter will not be determined solely by the “machine or transformation” test.

Previously, the Court of Appeals for the Federal Circuit (“CAFC”) adopted the “machine or transformation” test, which provided that a method is patentable if it is: 1) tied to a particular machine or apparatus; or 2) transforms a particular article into a different state or thing. Although Bilski establishes that this test is not the sole test for deciding whether a method is patentable, the Court did not reject this test and as such Applicants with interests in the biotechnology industry would be well advised to continue to consider this test when drafting a patent application and/or strategizing the direction of an existing patent portfolio.

From this point on, method claims in a patent application should either recite a nexus between the method and a machine, or emphasize a transformative step. For example, method claims directed to innovations in the medical diagnostic field should provide a link between the method and a useful and tangible result. This link can take the form of describing the end result of the method, including for example, diagnosing a particular cancer or determining a particular protocol for treating a patient.

However, all is not lost should one fail the “machine or transformation” test. Under the more expansive Supreme Court approach, even if a method claim fails this test, so long as the claim survives the “abstract ideas” analysis, the claim likely would be patentable (here, Messrs. Bilski and Warsaw’s patent claims were directed to a method for hedging against the risk of price changes in the energy market; the Court found these invalid, as directed to “abstract ideas”).

Two decisions previously handed down by the CAFC relating to this issue in the biotechnology context include Prometheus Laboratories Inc. v. Mayo Collaborative Services, Fed. Cir. No. 2008-1403 on September 16, 2009, and Classen Immunotherapies v. Biogen IDEC, Fed. Cir. No. 2006-1634, on December 19, 2008. Both decisions have been vacated by the Supreme Court and remanded to the CAFC for consideration in light of Bilski. As such, more guidance on the issue of patent-eligible subject matter for discoveries made in the life sciences is yet to come.