Legal Environment of Business 8th Edition by Henry Cheeseman

Exercise 1

Patent Bernard Bilski and Rand Warsaw filed a patent application with the U.S. Patent and Trademark Office (PTO). The application sought patent protection for a claimed invention that explains how buyers and sellers of commodities in the energy market can hedge against the risk of price changes. The key claims are claims 1 and 4. Claim 1 describes a series of steps in­structing how to hedge risk. Claim 4 puts the concept ar­ticulated in claim 1 into a simple mathematical formula. The remaining claims describe how claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand for energy. The PTO rejected the patent applica­tion, holding that it merely manipulates an abstract idea and solves a purely mathematical problem. Bilski and Warsaw brought their case to the U.S. Supreme Court, arguing that their claimed invention deserved a patent.
Is the claimed invention patentable? Bilski v. Kap­pos, Director, Patent and Trademark Office, 561 U.S. 593, 130 S.Ct. 3218, 2010 U.S. Lexis 5521 (Supreme Court of the United States, 2010)