Business Method Patents Go Green as Bilski Raises the Bar for Patentability

When most of us think of green patents, it is technology such as fuel cells, solar panels and wind turbines that first comes to mind.  But there was an interesting article in IP Review Online about a study which found that patents directed to methods of carbon trading are also driving the green patent surge.

The study (which I could not find online) is called “Carbon Trading:  Patently Set for Growth” and, according to the article, identifies a link between funding from the World Bank Carbon Finance Unit and increased patent filings for business method patents relating to carbon trading tools and forms of carbon administration.

The report’s findings are particularly interesting coming now, when the patent law world is digesting a very significant decision regarding business method patents. 

In an en banc opinion decided on October 30, the U.S. Court of Appeals for the Federal Circuit (the court that hears all patent appeals from federal courts and the U.S. Patent & Trademark Office (PTO)) held that a process is patentable only if (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.  (see the Patently-O discussion of the decision here)

The In re Bilski decision affirmed a PTO ruling that a claimed method of hedging risks in commodities trading does not satisfy the patentable subject matter requirements of section 101 of U.S. patent law.  Bilski’s claims did not pass the “machine or transformation” test because:

[T]he process as claimed encompasses the exchange of only options, which are simply legal rights to purchase some commodity at a given price in a given time period. The claim only refers to “transactions” involving the exchange of these legal rights at a “fixed rate corresponding to a risk position.” Thus, claim 1 does not involve the transformation of any physical object or substance, or an electronic signal representative of any physical object or substance.

Though business method patents are not dead – patent practitioners will undoubtedly find new ways to draft and argue them – the effects of In re Bilski will certainly be felt in the growing field of carbon trading.

Eric Lane Avatar

Eric Lane

Eric Lane, the founder and principal of Green Patent Law, is an intellectual property lawyer and registered U.S. patent attorney in New York and is a member of the bar in New York and California. Eric has more than two decades of experience working with wind, solar PV, CSP, biofuels, and geothermal, energy storage technologies, carbon capture and sequestration, medical devices, data communications, mechanical, chemical, internet and software.