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High Court Expands Eligibility for Patent Protections

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In a decision with implications for software vendors and construction firms, the U.S. Supreme Court on July 28 ruled business methods, such as formulas or strategies for improving efficiency, are patentable. The case, Bilski v. Kappos, appealed a lower-court ruling upholding the U.S. Patent Office’s denial of a patent for a formula for minimizing risk in buying and selling energy. The appeals court cited logic that limited patent protection to inventions involving new machinery or physical transformations of items. In the court’s 5-4 opinion, the justices upheld the rejection of the patent application, saying the formula was too abstract to patent. But they rejected the logic that would have limited patentability to machines and physical things.

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