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State Street ruling by US CAFC on 23 July 1998

State Street Bank & Trust Co. v. Signature Financial Group, Inc. (149 F.3d 1368, 1374 n. 6 (Fed. Cir. 1999)) is often cited as the ruling which opened the floodgates for business method patents, and broadening the scope for software patents.

Effects of Bilksi on State Street

The CAFC's ruling on in re Bilski in 2008 is largely seen as overturning the State Street ruling, in whole or in part. However, the two cases do not deal with the same issue, to the relationship isn't clear.

State Street upheld a software patent which claimed to be a "machine". The patent did not claim to be a "process", and Bilksi's ruling only dealt with what tests a "process" had to pass in order to be patentable.

In 2009, during the US Supreme Court's hearing of Bilski, the USPTO's lawyer seemed to argue that the CAFC's Bilksi ruling (i.e. the particular machine or transformation test) would not change the State Street ruling:

Well, it was machine — that is, in State Street Bank, the claim was not to a process within the meaning of Section 101 [...] It didn’t transform anything, but it would fit — the transformation part would be irrelevant because the machine-or-transformation test is, in our view, the appropriate rubric to apply in construing the statutory term process[1]

At the hearing, Justice Sotomayor also said agreed that Bilksi does not directly reinterpret State Street:

Mr. Stewart (USPTO): [...]The Federal circuit was not construing the statutory term “process.” It was construing the statutory term “machine.”[...]
Justice Sotomayor: No ruling in this case is going to change State Street. It wasn’t looking at process or the meaning of “process.” It was looking at something else.[2]

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