Following the Supreme Court’s rejection of the U.S. Court of Appeals for the Federal Circuit’s “machine-or-transformation” test as the sole test for determining patent eligibility in Bilski v. Kappos, the Federal Circuit has crafted a standard for determining the patentability of business method inventions. Two recent Federal Circuit decisions — Research Corporation Technologies Inc. v. Microsoft and Cybersource Corporation v. Retail Decisions — provide guidance as to the evolving contours of this standard.

Given the importance and prevalence of business method patents, such as those directed to software, the internet and financial products or transactions, these two decisions will be widely discussed and compared. This article first examines the background of business method patents, and then examines the implications of the Research and Cybersource decisions.

BACKGROUND

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