US appeals court denies patent to 'abstract' risk management system

In yet another sign that it's getting harder to gain -- and keep -- "business method" patents, a pair of inventors lost an appeals court bid this week to patent an energy-related risk management system.

Can an inventor patent an "abstract process," something involving nothing more than thoughts? A US appeals court this week said "no" in a case concerning a patent request around a system for managing energy costs.

On Thursday, the U.S. Court of Appeals for the Federal Circuit ruled that the system did not qualify for a patent as a "business method," since it was not tied to a machine and did not bring about a "transformation," two patentability standards previously set by the US Supreme Court.

Inventors Bernard Bilski and Rand Warsaw lost in their attempt to challenge the U.S. Patent and Trade Office's rejection of of their patent application for a method of managing risk in the abrupt movements of energy costs.

Although business methods weren't even widely seen as patentable until a 1998 decision by the same appeals court, the U.S. Patent and Trade Office granted 1,330 patents of this kind in 2007 alone.

However, it seems as though "business methods" patents are now growing less likely to be granted -- or to endure, if they are indeed granted.

Last year, for example, US patent officials struck down one of the best known examples of a business method patent: Amazon's one-click purchase procedure.

As previously reported by BetaNews, Auckland, New Zealand resident Peter Calveley petitioned the US Patent and Trademark Office in 2005 to re-examine the 26 patent claims made by Amazon around its so-called "Method and System for Placing a Purchase Order Via a Communications Network."

To make his case, Calveley cited an existing 1999 patent for a system for ordering goods or services using "interactive TV." Yet Amazon maintained that the differences between the older concept and its own included Amazon's use of a shopping cart metaphor and a unique button for instigating purchasing.

At one time, the US Patent and Trade Office was convinced these claims were significant enough to distinguish Amazon's method from earlier approaches. However, the office ultimately struck down Amazon's claims, in a re-examination decision reached in October of 2007.