Here is what I understood about Bilski's impact on software patents
Software has never been a patentable subject matter under 35 USC 101. The Supreme Court in Gottschalk v. Bensen said it clearly that software is just an idea and nobody can patent an idea. That is the law for two decades until today. In Diamond v Diehr, The SCOTUS announced that to be patentable, a software must do some physical transformation. That idea was captured in State Street Bank and Trust by CAFC to announce to be patentable, a software must perform concrete and tangible results.
Bilski did not overrule State Street Bank per se but it did it effectively by announcing the useful, tangible/concrete test is not adequate and the Machine or Transformation Test is the test to use. When State Street test was used, as long as the result is useful, it can be intangible but still patentable. Remember In re Alappat? There is no physical or tangible transformation in Alappat but the result is surely useful. If Diehr is controlling, then Alappat would not be able to get his patent because there was no physical transformation. For two decades the CAFC wanted to reconcile Bensen and Diehr but it moved backwards in Bilski.
Bilski did not say software is not absolutely unpatentable. That would violate Diehr. Instead, it requires from now on physical transformation. It basically will require lots of more attorney times to figure out what the software code will physically transform but still avoid 102 and 103 problems. You cannot just attach a computer because it will be obvious and banned by statutory bars. This will in effect make patenting a software so costly that it basically is not worth the protection. That is what I said Bilski announced the death to software patent. Except MS and alike, average programmer will not spend millions on attorney fees to protect the code. In light of the current Obama administration's policy favoring open source, this will get much worse. To simplify, MS will not be able to patent Windows 7, but a machine using Windows 7 to make pizza is patentable subject matter, provided other requirements are met. No matter how ridiculous it is, that is the law from Bilski.
Software has never been a patentable subject matter under 35 USC 101. The Supreme Court in Gottschalk v. Bensen said it clearly that software is just an idea and nobody can patent an idea. That is the law for two decades until today. In Diamond v Diehr, The SCOTUS announced that to be patentable, a software must do some physical transformation. That idea was captured in State Street Bank and Trust by CAFC to announce to be patentable, a software must perform concrete and tangible results.
Bilski did not overrule State Street Bank per se but it did it effectively by announcing the useful, tangible/concrete test is not adequate and the Machine or Transformation Test is the test to use. When State Street test was used, as long as the result is useful, it can be intangible but still patentable. Remember In re Alappat? There is no physical or tangible transformation in Alappat but the result is surely useful. If Diehr is controlling, then Alappat would not be able to get his patent because there was no physical transformation. For two decades the CAFC wanted to reconcile Bensen and Diehr but it moved backwards in Bilski.
Bilski did not say software is not absolutely unpatentable. That would violate Diehr. Instead, it requires from now on physical transformation. It basically will require lots of more attorney times to figure out what the software code will physically transform but still avoid 102 and 103 problems. You cannot just attach a computer because it will be obvious and banned by statutory bars. This will in effect make patenting a software so costly that it basically is not worth the protection. That is what I said Bilski announced the death to software patent. Except MS and alike, average programmer will not spend millions on attorney fees to protect the code. In light of the current Obama administration's policy favoring open source, this will get much worse. To simplify, MS will not be able to patent Windows 7, but a machine using Windows 7 to make pizza is patentable subject matter, provided other requirements are met. No matter how ridiculous it is, that is the law from Bilski.
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