Volume 86, No. 2, Winter 2014
By Elizabeth Bestoso [PDF]

This Comment examines the patentability of business methods in the financial industry under 35 U.S.C. § 101. Prior to 1998, the financial industry was largely inexperienced in patent law, but that changed drastically when the Federal Circuit handed down its decision in State Street Bank & Trust Co. v. Signature Financial Group, Inc. The decision led to an explosion of business method patents in the industry that continued until the Supreme Court pulled back the reins in its seminal 2010 decision Bilski v. Kappos. Since Bilski, courts have been very uneven in their analyses of patentable processes under § 101 but have consistently reached the same conclusion: the financial business method at issue constitutes a patent-ineligible abstract idea. The legislature has also weighed in on the issue and enacted a new program under the Leahy-Smith America Invents Act of 2011 designed to systematically eliminate low-quality financial business method patents.

With the ambiguous case law and massive patent system overhaul as a backdrop, Part III.A identifies the policy concerns underlying the issue of financial business method patentability, determining that the forward-looking argument that innovation has been stifled—not inspired—by patentability carries the most weight. Part III.B entertains the idea of taking a page out of Europe’s book, which categorically excludes business method patents per se. Part III.C then moves through the critical analysis of courts’ tendency to invalidate financial business method patents, albeit without ever articulating a concrete standard for doing so. Finally, Part III.D examines the implications of the Leahy-Smith America Invents Act of 2011, agreeing with the gentle approach of targeting and eliminating these low-quality patents in an inexpensive and efficient forum, before concluding, simply, that financial business method patents are invalid under § 101.