(Slip Opinion) 
OCTOBER TERM, 2009 
1 
Syllabus 
NOTE:  Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader. 
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 
SUPREME COURT OF THE UNITED STATES 
Syllabus 
BILSKI ET AL. v. KAPPOS, UNDER SECRETARY OF 
COMMERCE FOR INTELLECTUAL PROPERTY AND 
DIRECTOR, PATENT AND TRADEMARK OFFICE 
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 
THE FEDERAL CIRCUIT 
No. 08–964.  Argued November 9, 2009—Decided June 28, 2010 
Petitioners’ patent application seeks protection for a claimed invention 
that explains how commodities buyers and sellers in the energy mar-
ket can protect, or hedge, against the risk of price changes.  The key 
claims are claim 1, which describes a series of steps instructing how 
to hedge risk, and claim 4, which places the claim 1 concept into a 
simple mathematical formula.  The remaining claims explain how 
claims 1 and 4 can be applied to allow energy suppliers and consum-
ers to minimize the risks resulting from fluctuations in market de-
mand.  The patent examiner rejected the application on the grounds
that the invention is not implemented on a specific apparatus, merely 
manipulates an abstract idea, and solves a purely mathematical 
problem.  The Board of Patent Appeals and Interferences agreed and 
affirmed.  The Federal Circuit, in turn, affirmed.  The en banc court 
rejected its prior test for determining whether a claimed invention 
was a patentable “process” under Patent Act, 35 U. S. C. §101—i.e., 
whether the invention produced a “useful, concrete, and tangible re-
sult,” see, e.g., State Street Bank & Trust Co v. Signature Financial 
Group, Inc., 149 F. 3d 1368, 1373—holding instead that a claimed
process is patent eligible if: (1) it is tied to a particular machine or 
apparatus, or (2) it transforms a particular article into a different
state or thing.  Concluding that this “machine-or-transformation test”
is the sole test for determining patent eligibility of a “process” under 
§101, the court applied the test and held that the application was not
patent eligible.   
Held: The judgment is affirmed.   

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2 BILSKI 
v. KAPPOS 
Syllabus 
545 F. 3d 943, affirmed. 
JUSTICE  KENNEDY delivered the opinion of the Court, except as to
Parts II–B–2 and II–C–2, concluding that petitioners’ claimed inven-
tion is not patent eligible.  Pp. 4–8, 10–11, 12–16. 
(a) Section 101 specifies four independent categories of inventions
or discoveries that are patent eligible: “process[es],” “machin[es],”
“manufactur[es],” and “composition[s] of matter.”  “In choosing such
expansive terms, . . . Congress plainly contemplated that the patent
laws would be given wide scope,” Diamond v. Chakrabarty, 447 U. S. 
303, 308, in order to ensure that “ ‘ingenuity should receive a liberal 
encouragement,’ ”  id., at 308–309.  This Court’s precedents provide
three specific exceptions to §101’s broad principles: “laws of nature, 
physical phenomena, and abstract ideas.”  Id., at 309.  While not re-
quired by the statutory text, these exceptions are consistent with the 
notion that a patentable process must be “new and useful.”  And, in 
any case, the exceptions have defined the statute’s reach as a matter
of statutory stare decisis going back 150 years.  See Le Roy v. 
Tatham, 14 How. 156, 174.  The §101 eligibility inquiry is only a 
threshold test.  Even if a claimed invention qualifies in one of the
four categories, it must also satisfy “the conditions and requirements 
of this title,” §101(a), including novelty, see §102, nonobviousness, see
§103, and a full and particular description, see §112.  The invention 
at issue is claimed to be a “process,” which §100(b) defines as a “proc-
ess, art or method, and includes a new use of a known process, ma-
chine, manufacture, composition of matter, or material.”  Pp. 4–5.
(b) The machine-or-transformation test is not the sole test for pat-
ent eligibility under §101.  The Court’s precedents establish that al-
though that test may be a useful and important clue or investigative
tool, it is not the sole test for deciding whether an invention is a pat-
ent-eligible “process” under §101.  In holding to the contrary, the 
Federal Circuit violated two principles of statutory interpretation:
Courts “ ‘should not read into the patent laws limitations and condi-
tions which the legislature has not expressed,’ ” Diamond v. Diehr, 
450 U. S. 175, 182, and, “[u]nless otherwise defined, ‘words will be in-
terpreted as taking their ordinary, contemporary, common mean-
ing,’ ”  ibid.  The Court is unaware of any ordinary, contemporary, 
common meaning of “process” that would require it to be tied to a
machine or the transformation of an article.  Respondent Patent Di-
rector urges the Court to read §101’s other three patentable catego-
ries as confining “process” to a machine or transformation.  However, 
the doctrine of noscitur a sociis is inapplicable here, for §100(b) al-
ready explicitly defines “process,” see Burgess v. United States, 553 
U. S. 124, 130, and nothing about the section’s inclusion of those 
other categories suggests that a “process” must be tied to one of them. 

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Cite as:  561 U. S. ____ (2010) 
3 
Syllabus 
Finally, the Federal Circuit incorrectly concluded that this Court has
endorsed the machine-or-transformation test as the exclusive test. 
Recent authorities show that the test was never intended to be ex-
haustive or exclusive.  See, e.g., Parker v. Flook, 437 U. S. 584, 588, 
n. 9.  Pp. 5–8.
(c) Section 101 similarly precludes a reading of the term “process” 
that would categorically exclude business methods.  The term 
“method” within §100(b)’s “process” definition, at least as a textual
matter and before other consulting other Patent Act limitations and
this Court’s precedents, may include at least some methods of doing
business.  The Court is unaware of any argument that the “ordinary,
contemporary, common meaning,” Diehr,  supra, at 182, of “method” 
excludes business methods.  Nor is it clear what a business method 
exception would sweep in and whether it would exclude technologies
for conducting a business more efficiently.  The categorical exclusion
argument is further undermined by the fact that federal law explic-
itly contemplates the existence of at least some business method pat-
ents: Under §273(b)(1), if a patent-holder claims infringement based
on “a method in [a] patent,” the alleged infringer can assert a defense
of prior use.  By allowing this defense, the statute itself acknowledges 
that there may be business method patents.  Section 273 thus clari-
fies the understanding that a business method is simply one kind of
“method” that is, at least in some circumstances, eligible for patent-
ing under §101.  A contrary conclusion would violate the canon 
against interpreting any statutory provision in a manner that would 
render another provision superfluous.  See Corley v. United States, 
556 U. S. ___, ___.  Finally, while §273 appears to leave open the pos-
sibility of some business method patents, it does not suggest broad
patentability of such claimed inventions.  Pp. 10–11.    
(d) Even though petitioners’ application is not categorically outside
of §101 under the two atextual approaches the Court rejects today,
that does not mean it is a “process” under §101.  Petitioners seek to 
patent both the concept of hedging risk and the application of that 
concept to energy markets.  Under Benson,  Flook, and Diehr, how-
ever, these are not patentable processes but attempts to patent ab-
stract ideas.  Claims 1 and 4 explain the basic concept of hedging and
reduce that concept to a mathematical formula.  This is an unpat-
entable abstract idea, just like the algorithms at issue in Benson and 
Flook.  Petitioners’ remaining claims, broad examples of how hedging 
can be used in commodities and energy markets, attempt to patent 
the use of the abstract hedging idea, then instruct the use of well-
known random analysis techniques to help establish some of the in-
puts into the equation.  They add even less to the underlying abstract 
principle than the invention held patent ineligible in Flook.  Pp. 12– 

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4 BILSKI 
v. KAPPOS 
Syllabus 
15. 
(e) Because petitioners’ patent application can be rejected under 
the Court’s precedents on the unpatentability of abstract ideas, the
Court need not define further what constitutes a patentable “proc-
ess,” beyond pointing to the definition of that term provided in 
§100(b) and looking to the guideposts in Benson,  Flook, and Diehr. 
Nothing in today’s opinion should be read as endorsing the Federal 
Circuit’s past interpretations of §101.  See, e.g., State Street, 49 F. 3d, 
at 1373.  The appeals court may have thought it needed to make the
machine-or-transformation test exclusive precisely because its case
law had not adequately identified less extreme means of restricting
business method patents.  In disapproving an exclusive machine-or-
transformation test, this Court by no means desires to preclude the 
Federal Circuit’s development of other limiting criteria that further
the Patent Act’s purposes and are not inconsistent with its text.
P. 16. 
KENNEDY, J., delivered the opinion of the Court, except for Parts II–
B–2 and II–C–2.  ROBERTS, C. J., and THOMAS and ALITO, JJ., joined the 
opinion in full, and SCALIA, J., joined except for Parts II–B–2 and II–C– 
2.  STEVENS, J., filed an opinion concurring in the judgment, in which 
GINSBURG, BREYER, and SOTOMAYOR, JJ., joined.  BREYER, J., filed an 
opinion concurring in the judgment, in which SCALIA, J., joined as to 
Part II. 

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Cite as:  561 U. S. ____ (2010) 
1 
Opinion of the Court 
NOTICE:  This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press. 
SUPREME COURT OF THE UNITED STATES 
_________________ 
No. 08–964 
_________________ 
BERNARD L. BILSKI AND RAND A. WARSAW, 
PETITIONERS v. DAVID J. KAPPOS, UNDER 
SECRETARY OF COMMERCE FOR INTEL- 
LECTUAL PROPERTY AND DIRECTOR, 
PATENT AND TRADEMARK OFFICE
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[June 28, 2010]
 JUSTICE  KENNEDY delivered the opinion of the Court, 
except as to Parts II–B–2 and II–C–2.* 
The question in this case turns on whether a patent can
be issued for a claimed invention designed for the business
world.  The patent application claims a procedure for 
instructing buyers and sellers how to protect against the 
risk of price fluctuations in a discrete section of the econ-
omy.  Three arguments are advanced for the proposition 
that the claimed invention is outside the scope of patent
law: (1) it is not tied to a machine and does not transform
an article; (2) it involves a method of conducting business; 
and (3) it is merely an abstract idea.  The Court of Appeals
ruled that the first mentioned of these, the so-called ma-
chine-or-transformation test, was the sole test to be used 
for determining the patentability of a “process” under the
Patent Act, 35 U. S. C. §101. 
—————— 
* JUSTICE SCALIA does not join Parts II–B–2 and II–C–2. 

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2 BILSKI 
v. KAPPOS 
Opinion of the Court 
I 
Petitioners’ application seeks patent protection for a 
claimed invention that explains how buyers and sellers of 
commodities in the energy market can protect, or hedge, 
against the risk of price changes.  The key claims are 
claims 1 and 4.  Claim 1 describes a series of steps in-
structing how to hedge risk.  Claim 4 puts the concept
articulated in claim 1 into a simple mathematical formula.
Claim 1 consists of the following steps: 
“(a)  initiating a series of transactions between said 
commodity provider and consumers of said commodity
wherein said consumers purchase said commodity at a
fixed rate based upon historical averages, said fixed
rate corresponding to a risk position of said consum-
ers; 
“(b) identifying market participants for said com-
modity having a counter-risk position to said consum-
ers; and 
“(c)  initiating a series of transactions between said 
commodity provider and said market participants at a
second fixed rate such that said series of market par-
ticipant transactions balances the risk position of said 
series of consumer transactions.”  App. 19–20. 
The remaining claims explain how claims 1 and 4 can be
applied to allow energy suppliers and consumers to mini-
mize the risks resulting from fluctuations in market de-
mand for energy.  For example, claim 2 claims “[t]he 
method of claim 1 wherein said commodity is energy and 
said market participants are transmission distributors.” 
Id., at 20.  Some of these claims also suggest familiar 
statistical approaches to determine the inputs to use in 
claim 4’s equation.  For example, claim 7 advises using 
well-known random analysis techniques to determine how 
much a seller will gain “from each transaction under each 

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3 
Opinion of the Court 
historical weather pattern.”  Id., at 21. 
The patent examiner rejected petitioners’ application,
explaining that it “ ‘is not implemented on a specific appa-
ratus and merely manipulates [an] abstract idea and 
solves a purely mathematical problem without any limita-
tion to a practical application, therefore, the invention is 
not directed to the technological arts.’ ”  App. to Pet. for 
Cert. 148a.  The Board of Patent Appeals and Interfer-
ences affirmed, concluding that the application involved
only mental steps that do not transform physical matter
and was directed to an abstract idea.  Id., at 181a–186a. 
The United States Court of Appeals for the Federal 
Circuit heard the case en banc and affirmed.  The case 
produced five different opinions.  Students of patent law
would be well advised to study these scholarly opinions. 
Chief Judge Michel wrote the opinion of the court.  The 
court rejected its prior test for determining whether a 
claimed invention was a patentable “process” under 
§101—whether it produces a “ ‘useful, concrete, and tangi-
ble result’ ”—as articulated in State Street Bank & Trust 
Co.  v.  Signature Financial Group, Inc., 149 F. 3d 1368, 
1373 (1998), and AT&T Corp. v. Excel Communications, 
Inc.,  172 F. 3d 1352, 1357 (1999).  See In re  Bilski,  545 
F. 3d 943, 959–960, and n. 19 (CA Fed. 2008) (en banc).
The court held that “[a] claimed process is surely patent-
eligible under §101 if: (1) it is tied to a particular machine 
or apparatus, or (2) it transforms a particular article into a 
different state or thing.”  Id., at 954.  The court concluded 
this “machine-or-transformation test” is “the sole test 
governing §101 analyses,” id., at 955, and thus the “test 
for determining patent eligibility of a process under §101,” 
id., at 956.  Applying the machine-or-transformation test, 
the court held that petitioners’ application was not patent 
eligible.  Id., at 963–966.  Judge Dyk wrote a separate
concurring opinion, providing historical support for the 

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4 BILSKI 
v. KAPPOS 
Opinion of the Court 
court’s approach.  Id., at 966–976. 
Three judges wrote dissenting opinions.  Judge Mayer 
argued that petitioners’ application was “not eligible for 
patent protection because it is directed to a method of
conducting business.”  Id., at 998.  He urged the adoption
of a “technological standard for patentability.”  Id., at 
1010.  Judge Rader would have found petitioners’ claims 
were an unpatentable abstract idea.  Id., at 1011.  Only
Judge Newman disagreed with the court’s conclusion that
petitioners’ application was outside of the reach of §101. 
She did not say that the application should have been 
granted but only that the issue should be remanded for 
further proceedings to determine whether the application 
qualified as patentable under other provisions.  Id., at 997. 
This Court granted certiorari.  556 U. S. ___ (2009). 
II 
A 
Section 101 defines the subject matter that may be 
patented under the Patent Act: 
“Whoever invents or discovers any new and useful 
process, machine, manufacture, or composition of
matter, or any new and useful improvement thereof, 
may obtain a patent therefor, subject to the conditions 
and requirements of this title.” 
Section 101 thus specifies four independent categories of 
inventions or discoveries that are eligible for protection: 
processes, machines, manufactures, and compositions of 
matter.  “In choosing such expansive terms . . . modified by
the comprehensive ‘any,’ Congress plainly contemplated 
that the patent laws would be given wide scope.”  Dia-
mond v. Chakrabarty, 447 U. S. 303, 308 (1980).  Congress
took this permissive approach to patent eligibility to en-
sure that “ ‘ingenuity should receive a liberal encourage-
ment.’ ”  Id., at 308–309 (quoting 5 Writings of Thomas 

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5 
Opinion of the Court 
Jefferson 75–76 (H. Washington ed. 1871)). 
The Court’s precedents provide three specific exceptions 
to §101’s broad patent-eligibility principles: “laws of na-
ture, physical phenomena, and abstract ideas.”  Chakra-
barty,  supra, at 309.  While these exceptions are not re-
quired by the statutory text, they are consistent with the
notion that a patentable process must be “new and useful.”
And, in any case, these exceptions have defined the reach
of the statute as a matter of statutory stare decisis going
back 150 years.  See Le Roy v. Tatham, 14 How. 156, 174– 
175 (1853).  The concepts covered by these exceptions are
“part of the storehouse of knowledge of all men . . . free to
all men and reserved exclusively to none.”  Funk Brothers 
Seed Co. v. Kalo Inoculant Co., 333 U. S. 127, 130 (1948).
The §101 patent-eligibility inquiry is only a threshold 
test.  Even if an invention qualifies as a process, machine,
manufacture, or composition of matter, in order to receive
the Patent Act’s protection the claimed invention must 
also satisfy “the conditions and requirements of this title.”
§101.  Those requirements include that the invention be
novel, see §102, nonobvious, see §103, and fully and par-
ticularly described, see §112. 
The present case involves an invention that is claimed
to be a “process” under §101.  Section 100(b) defines “proc-
ess” as: 
“process, art or method, and includes a new use of a
known process, machine, manufacture, composition of
matter, or material.” 
The Court first considers two proposed categorical limita-
tions on “process” patents under §101 that would, if 
adopted, bar petitioners’ application in the present case: 
the machine-or-transformation test and the categorical 
exclusion of business method patents. 

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6 BILSKI 
v. KAPPOS 
Opinion of the Court 
B 
1 
Under the Court of Appeals’ formulation, an invention is
a “process” only if: “(1) it is tied to a particular machine or 
apparatus, or (2) it transforms a particular article into a 
different state or thing.”  545 F. 3d, at 954.  This Court 
has “more than once cautioned that courts ‘should not read 
into the patent laws limitations and conditions which the 
legislature has not expressed.’ ”  Diamond v. Diehr, 450 
U. S. 175, 182 (1981) (quoting Chakrabarty, supra, at 308; 
some internal quotation marks omitted).  In patent law, as
in all statutory construction, “[u]nless otherwise defined, 
‘words will be interpreted as taking their ordinary, con-
temporary, common meaning.’ ”  Diehr,  supra, at 182 
(quoting Perrin v. United States, 444 U. S. 37, 42 (1979)). 
The Court has read the §101 term “manufacture” in accor-
dance with dictionary definitions, see Chakrabarty, supra, 
at 308 (citing American Fruit Growers, Inc. v. Brogdex Co., 
283 U. S. 1, 11 (1931)), and approved a construction of the 
term “composition of matter” consistent with common 
usage, see Chakrabarty, supra, at 308 (citing Shell Devel-
opment Co. v. Watson, 149 F. Supp. 279, 280 (DC 1957)). 
Any suggestion in this Court’s case law that the Patent 
Act’s terms deviate from their ordinary meaning has only 
been an explanation for the exceptions for laws of nature,
physical phenomena, and abstract ideas.  See Parker v. 
Flook, 437 U. S. 584, 588–589 (1978).  This Court has not 
indicated that the existence of these well-established 
exceptions gives the Judiciary carte blanche to impose
other limitations that are inconsistent with the text and 
the statute’s purpose and design.  Concerns about at-
tempts to call any form of human activity a “process” can 
be met by making sure the claim meets the requirements
of §101.
Adopting the machine-or-transformation test as the sole 

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7 
Opinion of the Court 
test for what constitutes a “process” (as opposed to just an
important and useful clue) violates these statutory inter-
pretation principles.  Section 100(b) provides that “[t]he
term ‘process’ means process, art or method, and includes 
a new use of a known process, machine, manufacture, 
composition of matter, or material.”  The Court is unaware 
of any “ ‘ordinary, contemporary, common meaning,’ ” 
Diehr, supra, at 182, of the definitional terms “process, art 
or method” that would require these terms to be tied to a 
machine or to transform an article.  Respondent urges the
Court to look to the other patentable categories in §101—
machines, manufactures, and compositions of matter—to
confine the meaning of “process” to a machine or trans-
formation, under the doctrine of noscitur a sociis.  Under 
this canon, “an ambiguous term may be given more precise 
content by the neighboring words with which it is associ-
ated.”  United States v. Stevens, 559 U. S. ___, ___ (2010) 
(slip op., at 12) (internal quotation marks omitted).  This 
canon is inapplicable here, for §100(b) already explicitly
defines the term “process.”  See Burgess v. United States, 
553 U. S. 124, 130 (2008) (“When a statute includes an 
explicit definition, we must follow that definition” (inter-
nal quotation marks omitted)).
The Court of Appeals incorrectly concluded that this
Court has endorsed the machine-or-transformation test as 
the exclusive test.  It is true that Cochrane v. Deener, 94 
U. S. 780, 788 (1877), explained that a “process” is “an act, 
or a series of acts, performed upon the subject-matter to be 
transformed and reduced to a different state or thing.”
More recent cases, however, have rejected the broad impli-
cations of this dictum; and, in all events, later authority
shows that it was not intended to be an exhaustive or 
exclusive test.  Gottschalk v. Benson, 409 U. S. 63, 70 
(1972), noted that “[t]ransformation and reduction of an
article ‘to a different state or thing’ is the clue to the pat-

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8 BILSKI 
v. KAPPOS 
Opinion of KENNEDY, J. 
entability of a process claim that does not include particu-
lar machines.”  At the same time, it explicitly declined to
“hold that no process patent could ever qualify if it did not
meet [machine or transformation] requirements.”  Id., at 
71.  Flook  took a similar approach, “assum[ing] that a
valid process patent may issue even if it does not meet 
[the machine-or-transformation test].”  437 U. S., at 588, 
n. 9. 
This Court’s precedents establish that the machine-or-
transformation test is a useful and important clue, an
investigative tool, for determining whether some claimed 
inventions are processes under §101.  The machine-or-
transformation test is not the sole test for deciding
whether an invention is a patent-eligible “process.” 
2 
It is true that patents for inventions that did not satisfy
the machine-or-transformation test were rarely granted in 
earlier eras, especially in the Industrial Age, as explained 
by Judge Dyk’s thoughtful historical review.  See 545 
F. 3d, at 966–976 (concurring opinion).  But times change.
Technology and other innovations progress in unexpected 
ways.  For example, it was once forcefully argued that 
until recent times, “well-established principles of patent
law probably would have prevented the issuance of a valid 
patent on almost any conceivable computer program.” 
Diehr, 450 U. S., at 195 (STEVENS, J., dissenting).  But 
this fact does not mean that unforeseen innovations such 
as computer programs are always unpatentable.  See id., 
at 192–193 (majority opinion) (holding a procedure for 
molding rubber that included a computer program is
within patentable subject matter).  Section 101 is a “dy-
namic provision designed to encompass new and unfore-
seen inventions.”  J. E. M. Ag  Supply,  Inc. v. Pioneer Hi-
Bred Int’l, Inc., 534 U. S. 124, 135 (2001).  A categorical
rule denying patent protection for “inventions in areas not 

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9 
Opinion of KENNEDY, J. 
contemplated by Congress . . . would frustrate the pur-
poses of the patent law.”  Chakrabarty, 447 U. S., at 315. 
The machine-or-transformation test may well provide a 
sufficient basis for evaluating processes similar to those in
the Industrial Age—for example, inventions grounded in a
physical or other tangible form.  But there are reasons to 
doubt whether the test should be the sole criterion for 
determining the patentability of inventions in the Infor-
mation Age.  As numerous amicus briefs argue, the ma-
chine-or-transformation test would create uncertainty as
to the patentability of software, advanced diagnostic medi-
cine techniques, and inventions based on linear program-
ming, data compression, and the manipulation of digital 
signals.  See, e.g., Brief for Business Software Alliance 24– 
25; Brief for Biotechnology Industry Organization et al. 
14–27; Brief for Boston Patent Law Association 8–15; 
Brief for Houston Intellectual Property Law Association 
17–22; Brief for Dolby Labs., Inc., et al. 9–10.
In the course of applying the machine-or-transformation
test to emerging technologies, courts may pose questions
of such intricacy and refinement that they risk obscuring
the larger object of securing patents for valuable inven-
tions without transgressing the public domain.  The dis-
sent by Judge Rader refers to some of these difficulties. 
545 F. 3d, at 1015.  As a result, in deciding whether previ-
ously unforeseen inventions qualify as patentable “proc-
ess[es],” it may not make sense to require courts to confine 
themselves to asking the questions posed by the machine-
or-transformation test.  Section 101’s terms suggest that
new technologies may call for new inquiries.  See Benson, 
supra, at 71 (to “freeze process patents to old technologies,
leaving no room for the revelations of the new, onrushing
technology[,] . . . is not our purpose”). 
It is important to emphasize that the Court today is not
commenting on the patentability of any particular inven-

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10 BILSKI 
v. KAPPOS 
Opinion of the Court 
tion, let alone holding that any of the above-mentioned 
technologies from the Information Age should or should
not receive patent protection.  This Age puts the possibil-
ity of innovation in the hands of more people and raises
new difficulties for the patent law.  With ever more people 
trying to innovate and thus seeking patent protections for
their inventions, the patent law faces a great challenge in
striking the balance between protecting inventors and not 
granting monopolies over procedures that others would 
discover by independent, creative application of general
principles.  Nothing in this opinion should be read to take
a position on where that balance ought to be struck. 
C 
1 
Section 101 similarly precludes the broad contention
that the term “process” categorically excludes business
methods.  The term “method,” which is within §100(b)’s
definition of “process,” at least as a textual matter and
before consulting other limitations in the Patent Act and 
this Court’s precedents, may include at least some meth-
ods of doing business.  See, e.g.,  Webster’s New Interna-
tional Dictionary 1548 (2d ed. 1954) (defining “method” as
“[a]n orderly procedure or process . . . regular way or 
manner of doing anything; hence, a set form of procedure
adopted in investigation or instruction”).  The Court is 
unaware of any argument that the “ ‘ordinary, contempo-
rary, common meaning,’” Diehr, supra, at 182, of “method” 
excludes business methods.  Nor is it clear how far a pro-
hibition on business method patents would reach, and 
whether it would exclude technologies for conducting a 
business more efficiently.  See, e.g., Hall, Business and 
Financial Method Patents, Innovation, and Policy, 56 
Scottish J. Pol. Econ. 443, 445 (2009)  (“There is no precise 
definition of . . .  business method patents”).
The argument that business methods are categorically 

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11 
Opinion of KENNEDY, J. 
outside of §101’s scope is further undermined by the fact 
that federal law explicitly contemplates the existence of at 
least some business method patents.  Under 35 U. S. C. 
§273(b)(1), if a patent-holder claims infringement based on
“a method in [a] patent,” the alleged infringer can assert a
defense of prior use.  For purposes of this defense alone, 
“method” is defined as “a method of doing or conducting
business.”  §273(a)(3).  In other words, by allowing this 
defense the statute itself acknowledges that there may be
business method patents.  Section 273’s definition of 
“method,” to be sure, cannot change the meaning of a 
prior-enacted statute.  But what §273 does is clarify the 
understanding that a business method is simply one kind
of “method” that is, at least in some circumstances, eligible 
for patenting under §101.
A conclusion that business methods are not patentable 
in any circumstances would render §273 meaningless.
This would violate the canon against interpreting any 
statutory provision in a manner that would render an-
other provision superfluous.  See Corley v. United States, 
556 U. S. ___, ___ (2009) (slip op., at 9).  This principle, of 
course, applies to interpreting any two provisions in the 
U. S. Code, even when Congress enacted the provisions at
different times.  See, e.g.,  Hague v. Committee for Indus-
trial Organization, 307 U. S. 496, 529–530 (1939) (opinion 
of Stone, J.).  This established rule of statutory interpreta-
tion cannot be overcome by judicial speculation as to the 
subjective intent of various legislators in enacting the
subsequent provision.  Finally, while §273 appears to 
leave open the possibility of some business method pat-
ents, it does not suggest broad patentability of such 
claimed inventions. 
2 
Interpreting §101 to exclude all business methods sim-
ply because business method patents were rarely issued 

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12 BILSKI 
v. KAPPOS 
Opinion of KENNEDY, J. 
until modern times revives many of the previously dis-
cussed difficulties.  See supra, at 8–9.  At the same time, 
some business method patents raise special problems in 
terms of vagueness and suspect validity.  See eBay Inc. v. 
MercExchange, L. 
L. 
C., 547 U. 
S. 388, 397 (2006)
(KENNEDY, J., concurring).  The Information Age empow-
ers people with new capacities to perform statistical
analyses and mathematical calculations with a speed and 
sophistication that enable the design of protocols for more
efficient performance of a vast number of business tasks. 
If a high enough bar is not set when considering patent 
applications of this sort, patent examiners and courts 
could be flooded with claims that would put a chill on 
creative endeavor and dynamic change. 
In searching for a limiting principle, this Court’s prece-
dents on the unpatentability of abstract ideas provide
useful tools.  See infra, at 12–15.  Indeed, if the Court of 
Appeals were to succeed in defining a narrower category 
or class of patent applications that claim to instruct how 
business should be conducted, and then rule that the 
category is unpatentable because, for instance, it repre-
sents an attempt to patent abstract ideas, this conclusion 
might well be in accord with controlling precedent.  See 
ibid.  But beyond this or some other limitation consistent
with the statutory text, the Patent Act leaves open the
possibility that there are at least some processes that can 
be fairly described as business methods that are within
patentable subject matter under §101.
Finally, even if a particular business method fits into 
the statutory definition of a “process,” that does not mean
that the application claiming that method should be 
granted.  In order to receive patent protection, any
claimed invention must be novel, §102, nonobvious, §103,
and fully and particularly described, §112.  These limita-
tions serve a critical role in adjusting the tension, ever 

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Cite as:  561 U. S. ____ (2010) 
13 
Opinion of the Court 
present in patent law, between stimulating innovation by 
protecting inventors and impeding progress by granting
patents when not justified by the statutory design. 
III 
Even though petitioners’ application is not categorically
outside of §101 under the two broad and atextual ap-
proaches the Court rejects today, that does not mean it is
a “process” under §101.  Petitioners seek to patent both
the concept of hedging risk and the application of that 
concept to energy markets.  App. 19–20.  Rather than 
adopting categorical rules that might have wide-ranging
and unforeseen impacts, the Court resolves this case
narrowly on the basis of this Court’s decisions in Benson, 
Flook, and Diehr, which show that petitioners’ claims are
not patentable processes because they are attempts to
patent abstract ideas.  Indeed, all members of the Court 
agree that the patent application at issue here falls out-
side of §101 because it claims an abstract idea. 
In 
Benson, the Court considered whether a patent appli-
cation for an algorithm to convert binary-coded decimal 
numerals into pure binary code was a “process” under 
§101.  409 U. S., at 64–67.  The Court first explained that 
“ ‘[a] principle, in the abstract, is a fundamental truth; an
original cause; a motive; these cannot be patented, as no
one can claim in either of them an exclusive right.’”  Id., at 
67 (quoting Le Roy, 14 How., at 175).  The Court then held 
the application at issue was not a “process,” but an unpat-
entable abstract idea.  “It is conceded that one may not
patent an idea.  But in practical effect that would be the
result if the formula for converting  .  . . numerals to pure
binary numerals were patented in this case.”  409 U. S., at 
71.  A contrary holding “would wholly pre-empt the 
mathematical formula and in practical effect would be a
patent on the algorithm itself.”  Id., at 72. 
In 
Flook, the Court considered the next logical step after 

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14 BILSKI 
v. KAPPOS 
Opinion of the Court 
Benson.  The applicant there attempted to patent a proce-
dure for monitoring the conditions during the catalytic
conversion process in the petrochemical and oil-refining
industries.  The application’s only innovation was reliance
on a mathematical algorithm.  437 U. S., at 585–586. 
Flook held the invention was not a patentable “process.” 
The Court conceded the invention at issue, unlike the 
algorithm in Benson, had been limited so that it could still 
be freely used outside the petrochemical and oil-refining 
industries.  437 U. S., at 589–590.  Nevertheless, Flook 
rejected “[t]he notion that post-solution activity, no matter 
how conventional or obvious in itself, can transform an 
unpatentable principle into a patentable process.”  Id., at 
590.  The Court concluded that the process at issue there 
was “unpatentable under §101, not because it contain[ed] 
a mathematical algorithm as one component, but because 
once that algorithm [wa]s assumed to be within the prior
art, the application, considered as a whole, contain[ed] no 
patentable invention.”  Id., at 594.  As the Court later 
explained, Flook stands for the proposition that the prohi-
bition against patenting abstract ideas “cannot be circum-
vented by attempting to limit the use of the formula to a 
particular technological environment” or adding “insignifi-
cant postsolution activity.”  Diehr, 450 U. S., at 191–192. 
 Finally, 
in 
Diehr, the Court established a limitation on 
the principles articulated in Benson and Flook.  The appli-
cation in Diehr claimed a previously unknown method for 
“molding raw, uncured synthetic rubber into cured preci-
sion products,” using a mathematical formula to complete 
some of its several steps by way of a computer.  450 U. S., 
at 177.  Diehr explained that while an abstract idea, law of
nature, or mathematical formula could not be patented,
“an  application of a law of nature or mathematical for-
mula to a known structure or process may well be deserv-
ing of patent protection.”  Id., at 187.  Diehr emphasized 

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Cite as:  561 U. S. ____ (2010) 
15 
Opinion of the Court 
the need to consider the invention as a whole, rather than 
“dissect[ing] the claims into old and new elements and 
then . . . ignor[ing] the presence of the old elements in the
analysis.”  Id., at 188.  Finally, the Court concluded that 
because the claim was not “an attempt to patent a
mathematical formula, but rather [was] an industrial
process for the molding of rubber products,” it fell within
§101’s patentable subject matter.  Id., at 192–193. 
In light of these precedents, it is clear that petitioners’ 
application is not a patentable “process.”  Claims 1 and 4 
in petitioners’ application explain the basic concept of 
hedging, or protecting against risk: “Hedging is a funda-
mental economic practice long prevalent in our system of 
commerce and taught in any introductory finance class.” 
545 F. 3d, at 1013 (Rader, J., dissenting); see, e.g.,  D. 
Chorafas, Introduction to Derivative Financial Instru-
ments 75–94 (2008); C. Stickney, R. Weil, K. Schipper, & 
J. Francis, Financial Accounting: An Introduction to Con-
cepts, Methods, and Uses 581–582 (13th ed. 2010); S.
Ross, R. Westerfield, & B. Jordan, Fundamentals of Cor-
porate Finance 743–744 (8th ed. 2008).  The concept of
hedging, described in claim 1 and reduced to a mathemati-
cal formula in claim 4, is an unpatentable abstract idea,
just like the algorithms at issue in Benson and Flook. 
Allowing petitioners to patent risk hedging would pre-
empt use of this approach in all fields, and would effec-
tively grant a monopoly over an abstract idea. 
Petitioners’ remaining claims are broad examples of how 
hedging can be used in commodities and energy markets. 
Flook established that limiting an abstract idea to one 
field of use or adding token postsolution components did 
not make the concept patentable.  That is exactly what the 
remaining claims in petitioners’ application do.  These 
claims attempt to patent the use of the abstract idea of
hedging risk in the energy market and then instruct the 

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16 BILSKI 
v. KAPPOS 
Opinion of the Court 
use of well-known random analysis techniques to help 
establish some of the inputs into the equation.  Indeed, 
these claims add even less to the underlying abstract
principle than the invention in Flook did, for the Flook 
invention was at least directed to the narrower domain of 
signaling dangers in operating a catalytic converter. 
*  *  * 
Today, the Court once again declines to impose limita-
tions on the Patent Act that are inconsistent with the Act’s 
text.  The patent application here can be rejected under
our precedents on the unpatentability of abstract ideas.
The Court, therefore, need not define further what consti-
tutes a patentable “process,” beyond pointing to the defini-
tion of that term provided in §100(b) and looking to the 
guideposts in Benson, Flook, and Diehr. 
And nothing in today’s opinion should be read as endors-
ing interpretations of §101 that the Court of Appeals for
the Federal Circuit has used in the past.  See, e.g.,  State 
Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357. 
It may be that the Court of Appeals thought it needed to
make the machine-or-transformation test exclusive pre-
cisely because its case law had not adequately identified
less extreme means of restricting business method pat-
ents, including (but not limited to) application of our 
opinions in Benson, Flook, and Diehr.  In disapproving an
exclusive machine-or-transformation test, we by no means
foreclose the Federal Circuit’s development of other limit-
ing criteria that further the purposes of the Patent Act
and are not inconsistent with its text. 
The judgment of the Court of Appeals is affirmed. 
It is so ordered. 

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Cite as:  561 U. S. ____ (2010) 
1 
STEVENS, J., concurring in judgment 
SUPREME COURT OF THE UNITED STATES 
_________________ 
No. 08–964 
_________________ 
BERNARD L. BILSKI AND RAND A. WARSAW, 
PETITIONERS v. DAVID J. KAPPOS, UNDER 
SECRETARY OF COMMERCE FOR INTEL- 
LECTUAL PROPERTY AND DIRECTOR, 
PATENT AND TRADEMARK OFFICE
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[June 28, 2010] 
JUSTICE  STEVENS,  with whom JUSTICE  GINSBURG, 
JUSTICE  BREYER, and JUSTICE  SOTOMAYOR join, concur-
ring in the judgment. 
In the area of patents, it is especially important that the
law remain stable and clear.  The only question presented 
in this case is whether the so-called machine-or-
transformation test is the exclusive test for what consti-
tutes a patentable “process” under 35 U. S. C. §101.  It 
would be possible to answer that question simply by hold-
ing, as the entire Court agrees, that although the ma-
chine-or-transformation test is reliable in most cases, it is 
not the exclusive test. 
I agree with the Court that, in light of the uncertainty
that currently pervades this field, it is prudent to provide 
further guidance.  But I would take a different approach.
Rather than making any broad statements about how to
define the term “process” in §101 or tinkering with the
bounds of the category of unpatentable, abstract ideas, I
would restore patent law to its historical and constitu-
tional moorings. 
For centuries, it was considered well established that a 
series of steps for conducting business was not, in itself, 

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2 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
patentable.  In the late 1990’s, the Federal Circuit and 
others called this proposition into question.  Congress
quickly responded to a Federal Circuit decision with a
stopgap measure designed to limit a potentially significant 
new problem for the business community.  It passed the
First Inventors Defense Act of 1999 (1999 Act), 113 Stat.
1501A–555 (codified at 35 U. S. C. §273), which provides a 
limited defense to claims of patent infringement, see
§273(b), for “method[s] of doing or conducting business,” 
§273(a)(3).  Following several more years of confusion, the
Federal Circuit changed course, overruling recent deci-
sions and holding that a series of steps may constitute a
patentable process only if it is tied to a machine or trans-
forms an article into a different state or thing.  This “ma-
chine-or-transformation test” excluded general methods of 
doing business as well as, potentially, a variety of other 
subjects that could be called processes. 
The Court correctly holds that the machine-or-
transformation test is not the sole test for what constitutes 
a patentable process; rather, it is a critical clue.1  But the 
Court  is  quite  wrong,  in  my  view,  to  suggest  that  any
series of steps that is not itself an abstract idea or law of 
nature may constitute a “process” within the meaning of
§101.  The language in the Court’s opinion to this effect
can only cause mischief.  The wiser course would have 
been to hold that petitioners’ method is not a “process” 
because it describes only a general method of engaging in 
business transactions—and business methods are not 
patentable.  More precisely, although a process is not 
patent-ineligible simply because it is useful for conducting
business, a claim that merely describes a method of doing 
—————— 
1 Even if the machine-or-transformation test may not define the scope 
of a patentable process, it would be a grave mistake to assume that
anything with a “ ‘useful, concrete and tangible result,’ ”  State Street 
Bank & Trust v. Signature Financial Group, Inc., 149 F. 3d 1368, 1373 
(CA Fed. 1998), may be patented. 

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3 
STEVENS, J., concurring in judgment 
business does not qualify as a “process” under §101. 
I 
Although the Court provides a brief statement of facts, 
ante, at 1–4, a more complete explication may be useful for 
those unfamiliar with petitioners’ patent application and
this case’s procedural history.
Petitioners’ patent application describes a series of steps
for managing risk amongst buyers and sellers of commodi-
ties.  The general method, described in Claim 1, entails 
“managing the consumption risk costs of a commodity sold 
by a commodity provider at a fixed price,” and consists of 
the following steps: 
“(a)  initiating a series of transactions between said 
commodity provider and consumers of said commodity
wherein said consumers purchase said commodity at
a fixed rate based upon historical averages, said
fixed rate corresponding to a risk position of said 
consumers; 
“(b) identifying market participants for said com-
modity having a counter-risk position to said consum-
ers; and 
“(c)  initiating a series of transactions between said 
commodity provider and said market participants at a
second fixed rate such that said series of market par-
ticipant transactions balances the risk position of said 
series of consumer transactions.”  App. 19–20. 
Although the patent application makes clear that the
“method can be used for any commodity to manage con-
sumption risk in a fixed bill price product,” id., at 11, it 
includes specific applications of the method, particularly 
in the field of energy, as a means of enabling suppliers and 
consumers to minimize the risks resulting from fluctua-
tions in demand during specified time periods.  See id., at 
20–22.  Energy suppliers and consumers may use that 

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4 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
method to hedge their risks by agreeing upon a fixed
series of payments at regular intervals throughout the
year instead of charging or paying prices that fluctuate in 
response to changing weather conditions.  The patent
application describes a series of steps, including the
evaluation of historical costs and weather variables and 
the use of economic and statistical formulas, to analyze 
these data and to estimate the likelihood of certain out-
comes.  See id., at 12–19. 
The patent examiner rejected petitioners’ application on 
the ground that it “is not directed to the technological 
arts,” insofar as it “is not implemented on a specific appa-
ratus and merely manipulates [an] abstract idea and 
solves a purely mathematical problem without any limita-
tion to a practical application.”  App. to Pet. for Cert. 148a.
The Board of Patent Appeals and Interferences (Board) 
affirmed the examiner’s decision, but it rejected the posi-
tion that a patentable process must relate to “technologi-
cal arts” or be performed on a machine.  Id., at 180a–181a. 
Instead, the Board denied petitioners’ patent on two alter-
native, although similar, grounds: first, that the patent
involves only mental steps that do not transform physical
subject matter, id., at 181a–184a; and, second, that it is 
directed to an “abstract idea,” id., at 184a–187a. 
Petitioners appealed to the United States Court of Ap-
peals for the Federal Circuit.  After briefing and argument
before a three-judge panel, the court sua sponte decided to 
hear the case en banc and ordered the parties to address:
(1) whether petitioners’ “claim 1 . . . claims patent-eligible 
subject matter under 35 U. S. C. §101”; (2) “[w]hat stan-
dard should govern in determining whether a process is
patent-eligible subject matter”; (3) “[w]hether the claimed
subject matter is not patent-eligible because it constitutes 
an abstract idea or mental process”; (4) “[w]hether a 
method or process must result in a physical transforma-
tion of an article or be tied to a machine to be patent-

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Cite as:  561 U. S. ____ (2010) 
5 
STEVENS, J., concurring in judgment 
eligible subject matter”; and (5) whether the court’s deci-
sions in State Street Bank & Trust Co. v. Signature Finan-
cial Group, Inc., 149 F. 3d 1368 (1998) (State Street), and 
AT&T Corp. v. Excel Communications, Inc., 172 F. 3d 
1352 (1999), should be overruled in any respect.  App. to
Pet. for Cert. 144a–145a. 
The en banc Court of Appeals affirmed the Board’s
decision.  Eleven of the twelve judges agreed that petition-
ers’ claims do not describe a patentable “process,” §101. 
Chief Judge Michel’s opinion, joined by eight other judges,
rejected several possible tests for what is a patent-eligible 
process, including whether the patent produces a “ ‘useful,
concrete and tangible result,’ ” whether the process relates 
to “technological arts,” and “categorical exclusions” for
certain processes such as business methods.  In re Bilski, 
545 F. 3d 943, 959–960 (2008).  Relying on several of our 
cases in which we explained how to differentiate a claim
on a “fundamental principle” from a claim on a “process,”
the court concluded that a “claimed process is surely pat-
ent-eligible under §101 if: (1) it is tied to a particular 
machine or apparatus, or (2) it transforms a particular 
article into a different state or thing.”  Id., at 954–955. 
The court further concluded that this “machine-or-
transformation test” is “the sole test governing §101 
analyses,” id., at 955 (emphasis added), and therefore the 
“test for determining patent eligibility of a process under 
§101,” id., at 956.  Applying that test, the court held that 
petitioners’ claim is not a patent-eligible process.  Id., at 
963–966. 
In a separate opinion reaching the same conclusion, 
Judge Dyk carefully reviewed the history of American
patent law and English precedents upon which our law is
based, and found that “the unpatentability of processes
not involving manufactures, machines, or compositions of 
matter has been firmly embedded . . . since the time of the
Patent Act of 1793.”  Id., at 966.  Judge Dyk observed, 

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6 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
moreover, that “[t]here is no suggestion in any of this early 
consideration of process patents that processes for organiz-
ing human activity were or ever had been patentable.” 
Id., at 972. 
Three judges wrote dissenting opinions, although two of 
those judges agreed that petitioners’ claim is not patent
eligible.  Judge Mayer would have held that petitioners’ 
claim “is not eligible for patent protection because it is 
directed to a method of conducting business.”  Id., at 998. 
He submitted that “[t]he patent system is intended to
protect and promote advances in science and technology, 
not ideas about how to structure commercial transac-
tions.”  Ibid.  “Affording patent protection to business
methods lacks constitutional and statutory support, serves
to hinder rather than promote innovation[,] and usurps
that which rightfully belongs in the public domain.”  Ibid. 
Judge Rader would have rejected petitioners’ claim on 
the ground that it seeks to patent merely an abstract idea. 
Id., at 1011. 
Only Judge Newman disagreed with the court’s conclu-
sion that petitioners’ claim seeks a patent on ineligible
subject matter.  Judge Newman urged that the en banc 
court’s machine-or-transformation test ignores the text 
and history of §101, id., at 977–978, 985–990, is in tension 
with several of decisions by this Court, id., at 978–985, 
and the Federal Circuit, id., at 990–992, and will invali-
date thousands of patents that were issued in reliance on 
those decisions, id., at 992–994. 
II 
Before explaining in more detail how I would decide this 
case, I will comment briefly on the Court’s opinion.  The 
opinion is less than pellucid in more than one respect, and, 
if misunderstood, could result in confusion or upset settled 
areas of the law.  Three preliminary observations may be 
clarifying. 

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7 
STEVENS, J., concurring in judgment 
First, the Court suggests that the terms in the Patent
Act must be read as lay speakers use those terms, and not
as they have traditionally been understood in the context
of patent law.  See, e.g., ante, at 6 (terms in §101 must be
viewed in light of their “ ‘ordinary, contemporary, common
meaning’ ”);  ante, at 10 (patentable “method” is any “or-
derly procedure or process,” “regular way or manner of 
doing anything,” or “set form of procedure adopted in 
investigation or instruction” (internal quotation marks
omitted)).  As I will explain at more length in Part III, 
infra, if this portion of the Court’s opinion were taken 
literally, the results would be absurd: Anything that con-
stitutes a series of steps would be patentable so long as it 
is novel, nonobvious, and described with specificity.  But 
the opinion cannot be taken literally on this point.  The 
Court makes this clear when it accepts that the “atextual”
machine-or-transformation test, ante, at 12, is “useful and 
important,” ante, at 8, even though it “violates” the stated 
“statutory interpretation principles,” ante, at 6; and when 
the Court excludes processes that tend to pre-empt com-
monly used ideas, see ante, at 14–15. 
Second, in the process of addressing the sole issue 
presented to us, the opinion uses some language that 
seems inconsistent with our centuries-old reliance on the 
machine-or-transformation criteria as clues to patentabil-
ity.  Most notably, the opinion for a plurality suggests
that these criteria may operate differently when address-
ing technologies of a recent vintage.  See ante, at 8–9 
(machine-or-transformation test is useful “for evaluating
processes similar to those in the Industrial Age,” but is
less useful “for determining the patentability of inventions
in the Information Age”).  In moments of caution, however, 
the opinion for the Court explains—correctly—that the
Court is merely restoring the law to its historical state of 
rest.  See ante, at 8 (“This Court’s precedents establish 
that the machine-or-transformation test is a useful and 

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8 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
important clue, an investigative tool, for determining 
whether some claimed inventions are processes under 
§101 ”).  Notwithstanding this internal tension, I under-
stand the Court’s opinion to hold only that the machine-or-
transformation test remains an important test for pat-
entability.  Few, if any, processes cannot effectively be 
evaluated using these criteria.
Third, in its discussion of an issue not contained in the 
questions presented—whether the particular series of 
steps in petitioners’ application is an abstract idea—the
Court uses language that could suggest a shift in our 
approach to that issue.  Although I happen to agree that
petitioners seek to patent an abstract idea, the Court does
not show how this conclusion follows “clear[ly],” ante, at 
15, from our case law.  The patent now before us is not for 
“[a] principle, in the abstract,” or a “fundamental truth.” 
Parker v. Flook, 437 U. S. 584, 589 (1978) (internal quota-
tion marks omitted).  Nor does it claim the sort of phe-
nomenon of nature or abstract idea that was embodied by
the mathematical formula at issue in Gottschalk v. Ben-
son, 409 U. S. 63, 67 (1972), and in Flook. 
The Court construes petitioners’ claims on processes for 
pricing as claims on “the basic concept of hedging, or
protecting against risk,” ante, at 14, and thus discounts 
the application’s discussion of what sorts of data to use,
and how to analyze those data, as mere “token postsolu-
tion components,” ante, at 15.  In other words, the Court 
artificially limits petitioners’ claims to hedging, and then
concludes that hedging is an abstract idea rather than a
term that describes a category of processes including 
petitioners’ claims.  Why the Court does this is never 
made clear.  One might think that the Court’s analysis
means that any process that utilizes an abstract idea is 
itself an unpatentable, abstract idea.  But we have never 
suggested any such rule, which would undermine a host of 
patentable processes.  It is true, as the Court observes, 

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9 
STEVENS, J., concurring in judgment 
that petitioners’ application is phrased broadly.  See ante, 
at 14–15.  But claim specification is covered by §112, not 
§101; and if a series of steps constituted an unpatentable
idea merely because it was described without sufficient
specificity, the Court could be calling into question some of 
our own prior decisions.2  At points, the opinion suggests 
that novelty is the clue.  See ante, at 14.  But the fact that 
hedging is “ ‘long prevalent in our system of commerce,’ ” 
ibid., cannot justify the Court’s conclusion, as “the proper 
construction of §101 . . . does not involve the familiar 
issu[e] of novelty” that arises under §102.  Flook, 437 
U. S., at 588.  At other points, the opinion for a plurality
suggests that the analysis turns on the category of patent 
involved.  See, e.g.,  ante, at 12 (courts should use the
abstract-idea rule as a “too[l]” to set “a high enough bar”
“when considering patent applications of this sort”).  But 
we have never in the past suggested that the inquiry
varies by subject matter.     
The Court, in sum, never provides a satisfying account
of what constitutes an unpatentable abstract idea.  In-
deed, the Court does not even explain if it is using the
machine-or-transformation criteria.  The Court essentially
asserts its conclusion that petitioners’ application claims 
an abstract idea.  This mode of analysis (or lack thereof) 
may have led to the correct outcome in this case, but it
also means that the Court’s musings on this issue stand 
for very little.   
—————— 
2 For example, a rule that broadly-phrased claims cannot constitute 
patentable processes could call into question our approval of Alexander 
Graham Bell’s famous fifth claim on “ ‘[t]he method of, and apparatus
for, transmitting vocal or other sounds telegraphically, as herein 
described, by causing electrical undulations, similar in form to the 
vibrations of the air accompanying the said vocal or other sounds,
substantially as set forth,’ ”  The Telephone Cases, 126 U. S. 1, 531 
(1888). 

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10 BILSKI 
v. KAPPOS
STEVENS, J., concurring in judgment 
III 
I agree with the Court that the text of §101 must be the
starting point of our analysis.  As I shall explain, however,
the text must not be the end point as well. 
Pursuant to its power “[t]o promote the Progress of . . .
useful Arts, by securing for limited Times to . . . Inventors 
the exclusive Right to their . . . Discoveries,” U. S. Const.,
Art. I, §8, cl. 8, Congress has passed a series of patent
laws that grant certain exclusive rights over certain in-
ventions and discoveries as a means of encouraging inno-
vation.  In the latest iteration, the Patent Act of 1952 
(1952 Act), Congress has provided that “[w]hoever invents
or discovers any new and useful process, machine, manu-
facture, or composition of matter, or any new and useful
improvement thereof, may obtain a patent therefor, sub-
ject to the conditions and requirements of this title,” 35 
U. S. C. §101, which include that the patent also be novel, 
§102, and nonobvious, §103.  The statute thus authorizes 
four categories of subject matter that may be patented:
processes, machines, manufactures, and compositions of 
matter.  Section 101 imposes a threshold condition.  “[N]o
patent is available for a discovery, however useful, novel, 
and nonobvious, unless it falls within one of the express 
categories of patentable subject matter.”  Kewanee Oil Co. 
v. Bicron Corp., 416 U. S. 470, 483 (1974).
Section 101 undoubtedly defines in “expansive terms”
the subject matter eligible for patent protection, as the 
statute was meant to ensure that “‘ingenuit[ies] receive a
liberal encouragement.’ ”  Diamond v. Chakrabarty, 447 
U. S. 303, 308–309 (1980); see also J. E. M. Ag  Supply, 
Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U. S. 124, 130 
(2001).  Nonetheless, not every new invention or discovery 
may be patented.  Certain things are “free for all to use.” 
Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 

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11 
STEVENS, J., concurring in judgment 
141, 151 (1989).3 
The text of the Patent Act does not on its face give much
guidance about what constitutes a patentable process.
The statute defines the term “process” as a “process, art or
method [that] includes a new use of a known process,
machine, manufacture, composition of matter, or mate-
rial.”  §100(b).  But, this definition is not especially help-
ful, given that it also uses the term “process” and is there-
fore somewhat circular. 
As lay speakers use the word “process,” it constitutes
any series of steps.  But it has always been clear that, as
used in §101, the term does not refer to a “ ‘process’ in the 
ordinary sense of the word,” Flook, 437 U. S., at 588; see 
also  Corning  v.  Burden, 15 How. 252, 268 (1854) (“[T]he 
term process is often used in a more vague sense, in which 
it cannot be the subject of a patent”).  Rather, as discussed 
in some detail in Part IV, infra, the term “process” (along
with the definitions given to that term) has long accumu-
lated a distinctive meaning in patent law.  When the term 
was used in the 1952 Patent Act, it was neither intended 
nor understood to encompass any series of steps or any 
way to do any thing. 
With that understanding in mind, the Government has 
—————— 
3 The Court quotes our decision in Diamond v. Chakrabarty, 447 U. S. 
303 (1980), for the proposition that, “ ‘[i]n choosing such expansive 
terms . . . modified by the comprehensive “any,” Congress plainly
contemplated that the patent laws would be given wide scope.’ ”  Ante, 
at 4.  But the Court fails to mention which terms we were discussing in 
Chakrabarty: the terms “manufacture” and “composition of matter.”
See 447 U. S., at 308 (“In choosing such expansive terms as ‘manufac-
ture’ and ‘composition of matter,’ modified by the comprehensive ‘any,’ 
Congress plainly contemplated that the patent laws would be given 
wide scope”).  As discussed herein, Congress’ choice of the term “proc-
ess” reflected a background understanding of what sorts of series of
steps could be patented, and likely reflected an intentional design to
codify that settled, judicial understanding.  This may not have been the 
case with the terms at issue in Chakrabarty. 

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12 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
argued that because “a word” in a statute “is given more 
precise content by the neighboring words with which it” 
associates,  United States v. Williams, 553 U. S. 285, 294 
(2008), we may draw inferences from the fact that “[t]he
other three statutory categories of patent-eligible subject
matter identified in Section 101—‘machine, manufacture, 
or composition of matter’—all ‘are things made by man,
and involve technology.’ ”  Brief for Respondent 26.  Spe-
cifically, the Government submits, we may infer “that the 
term ‘process’ is limited to technological and industrial 
methods.”  Ibid.  The Court rejects this submission cate-
gorically, on the ground that “§100(b) already explicitly 
defines the term ‘process.’ ”  Ante, at 6.  But §100(b) de-
fines the term “process” by using the term “process,” as 
well as several other general terms.  This is not a case, 
then, in which we must either “follow” a definition, ante, at 
7, or rely on neighboring words to understand the scope of 
an ambiguous term.  The definition itself contains the very
ambiguous term that we must define.
In my view, the answer lies in between the Govern-
ment’s and the Court’s positions: The terms adjacent to
“process” in §101 provide a clue as to its meaning, al-
though not a very strong clue.  Section 101’s list of catego-
ries of patentable subject matter is phrased in the disjunc-
tive, suggesting that the term “process” has content 
distinct from the other items in the list.  It would therefore 
be illogical to “rob” the word “process” of all independent 
meaning.  Reiter v. Sonotone Corp., 442 U. S. 330, 338 
(1979).  Moreover, to the extent we can draw inferences 
about what is a “process” from common attributes in §101, 
it is a dangerous endeavor to do so on the basis of a per-
ceived overarching theme.  Given the many moving parts 
at work in the Patent Act, there is a risk of merely con-
firming our preconceived notions of what should be pat-
entable or of seeing common attributes that track “the 
familiar issues of novelty and obviousness” that arise 

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13 
STEVENS, J., concurring in judgment 
under other sections of the statute but are not relevant to 
§101, Flook, 437 U. S., at 588.  The placement of “process” 
next to other items thus cannot prove that the term is
limited to any particular categories; it does, however, give 
reason to be skeptical that the scope of a patentable “proc-
ess” extends to cover any series of steps at all. 
The Court makes a more serious interpretive error.  As 
briefly discussed in Part II, supra, the Court at points 
appears to reject the well-settled proposition that the term
“process” in §101 is not a “ ‘process’ in the ordinary sense 
of the word,” Flook, 437 U. S., at 588.  Instead, the Court 
posits that the word “process” must be understood in light 
of its “ordinary, contemporary, common meaning,” ante, at 
6 (internal quotation marks omitted).  Although this is a
fine approach to statutory interpretation in general, it is a
deeply flawed approach to a statute that relies on complex 
terms of art developed against a particular historical
background.4  Indeed, the approach would render §101 
almost comical.  A process for training a dog, a series of 
dance steps, a method of shooting a basketball, maybe
even words, stories, or songs if framed as the steps of
typing letters or uttering sounds—all would be patent-
eligible.  I am confident that the term “process” in §101 is
not nearly so capacious.5 
—————— 
4 For example, if this Court were to interpret the Sherman Act accord-
ing to the Act’s plain text, it could prohibit “the entire body of private
contract,” National Soc. of Professional Engineers v. United States, 435 
U. S. 679, 688 (1978). 
5 The Court attempts to avoid such absurd results by stating that
these “[c]oncerns” “can be met by making sure that the claim meets the
requirements of §101.”  Ante, at 6.  Because the only limitation on the
plain meaning of “process” that the Court acknowledges explicitly is the
bar on abstract ideas, laws of nature, and the like, it is presumably this
limitation that is left to stand between all conceivable human activity
and patent monopolies.  But many processes that would make for
absurd patents are not abstract ideas.  Nor can the requirements of
novelty, nonobviousness, and particular description pick up the slack. 

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14 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
So is the Court, perhaps.  What is particularly incredi-
ble about the Court’s stated method of interpreting §101 
(other than that the method itself may be patent-eligible 
under the Court’s theory of §101) is that the Court devi-
ates from its own professed commitment to “ordinary,
contemporary, common meaning.”  As noted earlier, the 
Court accepts a role for the “atextual” machine-or-
transformation “clue.”  Ante, at 12, 7.  The Court also 
accepts that we have “foreclose[d] a purely literal reading
of §101,” Flook, 437 U. S., at 589, by holding that claims
that are close to “laws of nature, natural phenomena, and 
abstract ideas,” Diamond v. Diehr, 450 U. S. 175, 185 
(1981), do not count as “processes” under §101, even if 
they can be colloquially described as such.6  The Court 
attempts to justify this latter exception to §101 as “a 
matter of statutory stare decisis.”  Ante, at 5.  But it is 
strange to think that the very same term must be inter-
preted literally on some occasions, and in light of its his-
torical usage on others.
In fact, the Court’s understanding of §101 is even more 
remarkable because its willingness to exclude general
principles from the provision’s reach is in tension with its 
apparent willingness to include steps for conducting busi-
ness.  The history of patent law contains strong norms 
against patenting these two categories of subject matter.
Both norms were presumably incorporated by Congress 
into the Patent Act in 1952. 
—————— 
Cf.  ante, at 12–13 (plurality opinion).  A great deal of human activity 
was at some time novel and nonobvious. 
6 Curiously, the Court concedes that “these exceptions are not re-
quired by the statutory text,” but urges that “they are consistent with 
the notion that a patentable process must be ‘new and useful.’ ”  Ante, 
at 5 (emphasis added).  I do not see how these exceptions find a textual 
home in the term “new and useful.”  The exceptions may be consistent 
with those words, but they are sometimes inconsistent with the “ordi-
nary, contemporary, common meaning,” ante, at 6, 10 (internal quota-
tion marks omitted), of the words “process” and “method.” 

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15 
STEVENS, J., concurring in judgment 
IV 
Because the text of §101 does not on its face convey the
scope of patentable processes, it is necessary, in my view, 
to review the history of our patent law in some detail. 
This approach yields a much more straightforward answer 
to this case than the Court’s.  As I read the history, it
strongly supports the conclusion that a method of doing
business is not a “process” under §101. 
I am, of course, mindful of the fact that §101 “is a dy-
namic provision designed to encompass new and unfore-
seen inventions,” and that one must therefore view his-
torical conceptions of patent-eligible subject matter at an
appropriately high level of generality.  J. E. M. Ag Supply, 
534 U. S., at 135; see also Chakrabarty, 447 U. S., at 315– 
316.  But it is nonetheless significant that while people 
have long innovated in fields of business, methods of doing 
business fall outside of the subject matter that has “his-
torically been eligible to receive the protection of our
patent laws,” Diehr, 450 U. S., at 184, and likely go beyond
what the modern patent “statute was enacted to protect,” 
Flook, 437 U. S., at 593.  It is also significant that when
Congress enacted the latest Patent Act, it did so against
the background of a well-settled understanding that a 
series of steps for conducting business cannot be patented. 
These considerations ought to guide our analysis.  As 
Justice Holmes noted long ago, sometimes, “a page of 
history is worth a volume of logic.”  New York Trust Co. v. 
Eisner, 256 U. S. 345, 349 (1921). 
English Backdrop 
The Constitution’s Patent Clause was written against
the “backdrop” of English patent practices, Graham v. 
John Deere Co. of Kansas City, 383 U. S. 1, 5 (1966), and 
early American patent law was “largely based on and
incorporated” features of the English patent system, E.
Walterscheid, To Promote the Progress of Useful Arts: 

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16 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
American Patent Law and Administration, 1789–1836, 
p. 109 (1998) (hereinafter Walterscheid, To Promote the 
Progress).7  The governing English law, the Statute of 
Monopolies, responded to abuses whereby the Crown
would issue letters patent, “granting monopolies to court 
favorites in goods or businesses which had long before 
been enjoyed by the public.”  Graham, 383 U. S., at 5.  The 
statute generally prohibited the Crown from granting such 
exclusive rights, 21 Jam. 1, c. 3, §1 (1623), in 4 Statutes of 
the Realm 1213 (reprint 1963), but it contained exceptions
that, inter alia, permitted grants of exclusive rights to the
“working or making of any manner of new Manufacture.”
§6.
Pursuant to that provision, patents issued for the
“mode, method, or way of manufacturing,” F. Campin, Law 
of Patents for Inventions 11 (1869) (emphasis deleted), 
and English courts construed the phrase “working or 
making of any manner of new manufactures” to encom-
pass manufacturing processes, see, e.g., Boulton v. Bull, 2 
H. Bl. 463, 471, 492, 126 Eng. Rep. 651, 655, 666 (C. P.
1795) (holding that the term “manufacture” “applied not 
only to things made, but to the practice of making, to
principles carried into practice in a new manner, to new 
results of principles carried into practice”).  Thus, English 
courts upheld James Watt’s famous patent on a method 
for reducing the consumption of fuel in steam engines,8 as 
—————— 
7 See  Pennock v. Dialogue, 2 Pet. 1, 18 (1829) (“[M]any of the provi-
sions of our patent act are derived from the principles and practice, 
which have prevailed in the construction of that of England”); Proceed-
ings in Congress During the Years 1789 and 1790 Relating to the First
Patent and Copyright Laws, 22 J. Pat. Off. Soc. 352, 363 (1940) (ex-
plaining that the 1790 Patent Act was “framed according to the Course 
of Practice in the English Patent Office”); see also Walterscheid, The
Early Evolution of the United States Patent Law: Antecedents, 76 J.
Pat. & Trademark Off. Soc. 697, 698 (1994) (describing the role of the
English backdrop). 
8 See Hornblower v. Boulton, 8 T. R. 95  (K. B. 1799). 

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17 
STEVENS, J., concurring in judgment 
well as a variety of patents issued for methods of synthe-
sizing substances or building mechanical devices.9 
Although it is difficult to derive a precise understanding 
of what sorts of methods were patentable under English 
law, there is no basis in the text of the Statute of Monopo-
lies, nor in pre-1790 English precedent, to infer that busi-
ness methods could qualify.10  There was some debate 
throughout the relevant time period about what processes
could be patented.  But it does not appear that anyone 
seriously believed that one could patent “a method for 
organizing human activity.”  545 F. 3d, at 970 (Dyk, J., 
concurring).11 
There were a small number of patents issued between 
1623 and 1790 relating to banking or lotteries and one for 
a method of life insurance,12 but these did not constitute 
—————— 
9 See,  e.g.,  Roebuck  and Garbett v. William Stirling & Son (H. L.
1774), reprinted in 1 T. Webster, Reports and Notes of Cases on Letters 
Patent for Inventions 45 (1844) (“method of making acid spirit by
burning sulphur and saltpetre, and collecting the condensed fumes”); 
id., at 77 (“ ‘method of producing a yellow colour for painting in oil or 
water, making white lead, and separating the mineral alkali from
common salt, all to be performed in one single process’ ”); see also C.
MacLeod, Inventing the Industrial Revolution: The English Patent
System, 1660–1800, pp. 84–93, 100–104, 109–110, 152–155 (1988)
(listing patents) (hereinafter MacLeod).
10 Some English cases made reference to the permissibility of patents
over new “trades.”  But so far as I can tell, the term “trade” referred not 
to the methods of conducting business but rather to methods of making
and using physical items or to the object of the trade.  See, e.g., Cloth-
workers of Ipswich Case,  78 Eng. Rep. 147, 148 (K. B. 1603) (“[I]f a
man hath brought in a new invention and a new trade within the 
kingdom . . . [the King] may grant by charter unto him”). 
11 See also Pollack, The Multiple Unconstitutionality of Business 
Method Patents: Common Sense, Congressional Consideration, and 
Constitutional History, 28 Rutgers Computer & Tech. L. J. 61, 94–96
(2002) (hereinafter Pollack) (describing English practice). 
12 See  id., at 95; B. Woodcroft, Alphabetical Index of Patentees of
Inventions, from March 2, 1617 (14 James I) to October 1, 1852 (16 
Victoriae) 383, 410 (2d ed. 1969) (hereinafter Woodcroft). 

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18 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
the “prevail[ing]” “principles and practice” in England on
which our patent law was based, Pennock v. Dialogue, 2 
Pet. 1, 18 (1829).  Such patents were exceedingly rare, and 
some of them probably were viewed not as inventions or 
discoveries but rather as special state privileges13 that 
until the mid-1800’s were recorded alongside inventions in
the patent records, see MacLeod 1–2 (explaining that 
various types of patents were listed together).  It appears
that the only English patent of the time that can fairly be
described as a business method patent was one issued in 
1778 on a “Plan for assurances on lives of persons from 10 
to 80 years of Age.” Woodcroft 324.14  And “[t]here is no 
indication” that this patent “was ever enforced or its valid-
ity tested,” 545 F. 3d, at 974 (Dyk, J., concurring); the 
patent may thus have represented little more than the 
whim—or error—of a single patent clerk.15 
In any event, these patents (or patent) were probably 
not known to the Framers of early patent law.  In an era 
before computerized databases, organized case law, and 
treatises,16 the American drafters probably would have 
—————— 
13 See,  e.g., C. Ewen, Lotteries and Sweepstakes 70–71 (1932) (de-
scribing the “letters patent” to form a colony in Virginia and to operate 
lotteries to fund that colony). 
14 See also Renn, John Knox’s Plan for Insuring Lives: A Patent of 
Invention in 1778, 101 J. Inst. Actuaries 285, 286 (1974) (hereinafter
Renn) (describing the patent). 
15 “The English patent system” at that time “was one of simple regis-
tration.  Extensive scrutiny was not expected of the law officers admin-
istering it.”  MacLeod 41.  Thus, as one scholar suggested of the patent 
on life insurance, “perhaps the Law Officer was in a very good humour 
that day, or perhaps he had forgotten the wording of the statute; most
likely he was concerned only with the promised ‘very considerable 
Consumption of [Revenue] Stamps’ which [the patent holder] declared, 
would ‘contribute to the increase of the Public Revenues.’ ”  Renn 285. 
16 See  Markman v. Westview Instruments, Inc., 517 U. S. 370, 381 
(1996) (“[T]he state of patent law in the common-law courts before 1800
led one historian to observe that ‘the reported cases are destitute of any
decision of importance’ ” (quoting Hulme, On the Consideration of the 

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19 
STEVENS, J., concurring in judgment 
known about particular patents only if they were well 
publicized or subject to reported litigation.  So far as I am 
aware, no published cases pertained to patents on busi-
ness methods. 
Also noteworthy is what was not  patented under the
English system.  During the 17th and 18th centuries, 
Great Britain saw innovations in business organization,17 
business models,18 management techniques,19 and novel 
solutions to the challenges of operating global firms in 
which subordinate managers could be reached only by a 
long sea voyage.20  Few if any of these methods of conduct-
ing business were patented.21 
—————— 
Patent Grant, Past and Present, 13 L. Q. Rev. 313, 318 (1897)));
MacLeod 1, 61–62 (explaining the dearth of clear case law); see also 
Boulton v. Bull, 2 H. Bl. 463, 491, 126 Eng. Rep. 651, 665 (C. P. 1795)
(Eyre, C. J.) (“Patent rights are no where that I can find accurately 
discussed in our books”). 
17 See, e.g., A. DuBois, The English Business Company After the Bub-
ble Act, 1720–1800, pp.  38–40, 435–438 (1938); Harris, The Bubble
Act: Its Passage and its Effects on Business Organization, 54 J. Econ.
Hist. 610, 624–625 (1994). 
18 See Pollack 97–100.  For example, those who held patents on oil
lamps developed firms that contracted to provide street lighting.  See 
M. Falkus, Lighting in the Dark Ages of English Economic History:
Town Streets before the Industrial Revolutions, in Trade, Government, 
and Economy in Pre-Industrial England 249, 255–257, 259–260 (D.
Coleman & A. John eds. 1976). 
19 See, e.g., G. Hammersley, The State and the English Iron Industry
in the Sixteenth and Seventeenth Centuries, in id., at 166, 173, 175– 
178 (describing the advent of management techniques for efficiently 
running a major ironworks). 
20 See,  e.g., Carlos & Nicholas, Agency Problems in Early Chartered 
Companies: The Case of the Hudson’s Bay Company, 50 J. Econ. Hist. 
853, 853–875 (1990). 
21 Nor, so far as I can tell, were business method patents common in
the United States in the brief period between independence and the 
creation of our Constitution—despite the fact that it was a time of great 
business innovation, including new processes for engaging in risky
trade and transport, one of which has been called “the quintessential
business innovation of the 1780s.”  T. Doerflinger, A Vigorous Spirit of 

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20 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
Early American Patent Law 
At the Constitutional Convention, the Founders decided 
to give Congress a patent power so that it might “promote
the Progress of . . . useful Arts.”  Art. I, §8, cl. 8.  There is 
little known history of that Clause.22  We do know that the 
Clause passed without objection or debate.23  This is strik-
ing because other proposed powers, such as a power to 
grant charters of incorporation, generated discussion 
about the fear that they might breed “monopolies.”24 
Indeed, at the ratification conventions, some States rec-
ommended amendments that would have prohibited Con-
gress from granting “ ‘exclusive advantages of com-
merce.’ ”25  If the original understanding of the Patent 
—————— 
Enterprise: Merchants and Economic Development in Revolutionary 
Philadelphia 291 (1986) (describing new methods of conducting and
financing trade with China). 
22 See Seidel, The Constitution and a Standard of Patentability, 48 J.
Pat. Off. Soc. 5, 10 (1966) (hereinafter Seidel); Walterscheid, To Pro-
mote the Progress of Science and Useful Arts: The Background and
Origin of the Intellectual Property Clause of the United States Consti-
tution, 2 J. Intell. Prop. L. 1, 26 (1994) (hereinafter Walterscheid, 
Background and Origin); Walterscheid, To Promote the Progress 59,
and n. 12; Prager, A History of Intellectual Property From 1545 to
1787, 26 J. Pat. Off. Soc. 711, 746 (1944). 
23 Walterscheid, Background and Origin 26; 2 Records of the Federal 
Convention of 1787, pp. 509–510 (M. Farrand ed. 1966). 
24 J. Madison, Notes of Debates in the Federal Convention of 1787, 
pp. 638–639 (Ohio Univ. Press ed. 1966). 
25 See Walterscheid, Background and Origin 38, n. 124, 55–56 (collect-
ing sources); see also The Objections of Hon. George Mason, One of the
Delegates from Virginia, in the Late Continental Convention, to the 
Proposed Federal Constitution, Assigned as His Reasons For Not 
Signing the Same, 2 American Museum or Repository of Ancient and 
Modern Fugitive Pieces, etc. 534, 536 (1787) (reprint 1965); Ratification
of the New Constitution by the Convention of the State of New York, 4 
id., at 153, 156 (1789); Remarks on the Amendments to the Federal 
Constitution Proposed by The Conventions of Massachusetts, New 
Hampshire, New York, Virginia, South and North Carolina, with the 
Minorities of Pennsylvania and Maryland by the Rev. Nicholas Collin, 

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21 
STEVENS, J., concurring in judgment 
Clause included the authority to patent methods of doing
business, it might not have passed so quietly. 
In 1790, Congress passed the first Patent Act, an “Act to
promote the progress of useful Arts” that authorized pat-
ents for persons who had “invented or discovered any 
useful art, manufacture, engine, machine, or device, or 
any improvement therein not before known or used,” if
“the invention or discovery [was] sufficiently useful and
important.”  1 Stat. 109–110.  Three years later, Congress 
passed the Patent Act of 1793 and slightly modified the 
language to cover “any new and useful art, machine, 
manufacture or composition of matter, or any new and 
useful improvement on any art, machine, manufacture or 
composition of matter.”  1 Stat. 319. 
The object of the constitutional patent power and the
statutory authorization for process patents in the early 
patent Acts was the term “useful art.”  It is not evident 
from the face of the statutes or the Constitution whether 
the objects of the patent system were “arts” that are also
useful, or rather a more specific category, the class of arts
known as “useful arts.”  Cf. Graham, 383 U. S., at 12 
(describing the “‘new and useful’ tests which have always
existed in the statutory scheme” and apply to all catego-
ries of subject matter).  However, we have generally as-
sumed that “useful art,” at least as it is used in the Patent 
Act, is itself a term of art.  See Burden, 15 How., at 267– 
268. 
The word “art” and the phrase “useful arts” are subject 
to many meanings.  There is room on the margins to de-
bate exactly what qualifies as either.  There is room, 
moreover, to debate at what level of generality we should 
understand these broad and historical terms, given that 
“[a] rule that unanticipated inventions are without protec-
tion would conflict with the core concept of the patent 
—————— 
D. D., 6 id., at 303, 303. 

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22 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
law,” Chakrabarty, 447 U. S., at 316.  It appears, however,
that regardless of how one construes the term “useful
arts,” business methods are not included. 
Noah Webster’s first American dictionary26 defined the 
term “art” as the “disposition or modification of things by
human skill, to answer the purpose intended,” and differ-
entiated between “useful or mechanic” arts, on the one 
hand, and “liberal or polite” arts, on the other.  1 An 
American Dictionary of the English Language (1828)
(facsimile edition) (emphasis added).  Although other 
dictionaries defined the word “art” more broadly,27 Web-
ster’s definition likely conveyed a message similar to the 
meaning of the word “manufactures” in the earlier English 
statute.  And we know that the term “useful arts” was 
used in the founding era to refer to manufacturing and 
similar applied trades.28  See Coulter, The Field of the 
—————— 
26 Some scholars suggest that Webster’s “close proximity to the Con-
stitutional Convention coupled with his familiarity with the delegates 
makes it likely that he played some indirect role in the development” of
the Constitution’s Intellectual Property Clause—a Clause that estab-
lished not only the power to create patents but also copyrights, a 
subject in which Webster had great interest.  Donner, Copyright Clause
of the U. S. Constitution: Why Did the Framers Include It With
Unanimous Approval?  36 Am. J. Legal. Hist. 361, 372 (1992).  But 
there is no direct evidence of this fact.  See Walterscheid, Background 
and Origin 40–41. 
27 See, e.g., 1 S. Johnson, Dictionary of the English Language (1773)
(reprint 1978) (listing as definitions of an “art”:“[t]he power of doing
something not taught by nature and instinct,” “[a] science; as, the 
liberal arts,” “[a] trade,” “[a]rtfulness; skill; dexterity,” “[c]unning,” and 
“[s]peculation”).  One might question the breadth of these definitions.
This same dictionary offered as an example of “doing something not 
taught by nature and instinct,” the art of “dance”; and as an example of 
a “trade,” the art of “making sugar.”  Ibid. 
28 For examples of this usage, see Book of Trades or Library of Useful
Arts (1807) (describing in a three-volume work 68 trades, each of which
is the means of creating a product, such as feather worker or cork
cutter); 1 J. Bigelow, The Useful Arts Considered in Connexion with the 
Applications of Science (1840) (surveying a history of what we would 

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23 
STEVENS, J., concurring in judgment 
Statutory Useful Arts, 34 J. Pat. Off. Soc. 487, 493–500 
(1952); see also Thomas, The Patenting of the Liberal
Professions, 40 Boston College L. Rev. 1139, 1164 (1999) 
(“[The Framers of the Constitution] undoubtedly contem-
plated the industrial, mechanical and manual arts of the 
late eighteenth Century, in contrast to the seven ‘liberal 
arts’ and the four ‘fine arts’ of classical learning”).  Indeed, 
just days before the Constitutional Convention, one dele-
gate listed examples of American progress in “manufac-
tures and the useful arts,” all of which involved the crea-
tion or transformation of physical substances.  See T. 
Coxe, An Address to an Assembly of the Friends of Ameri-
can Manufactures 17–18 (1787) (listing, inter alia, meal, 
ships, liquors, potash, gunpowder, paper, starch, articles
of iron, stone work, carriages, and harnesses).  Numerous 
scholars have suggested that the term “useful arts” was 
widely understood to encompass the fields that we would 
now describe as relating to technology or “technological 
arts.”29 
—————— 
today call mechanics, technology, and engineering).  See also D. Defoe, 
A General History of Discoveries and Improvements, in Useful Arts
(1727); T. Coxe, An Address to an Assembly of the Friends of American 
Manufactures 17–18 (1787); G. Logan, A Letter to the Citizens of 
Pennsylvania, on the Necessity of Promoting Agriculture, Manufac-
tures, and the Useful Arts 12–13 (2d ed. 1800); W. Kenrick, An Address
to the Artists and Manufacturers of Great Britain 21–38 (1774); cf. 
Corning v. Burden, 15 How. 252, 267 (1854) (listing the “arts of tan-
ning, dyeing, making water-proof cloth, vulcanizing India rubber, [and] 
smelting ores”). 
29 See,  e.g., 1 D. Chisum, Patents G1–23 (2010); Lutz, Patents and
Science: A Clarification of the Patent Clause of the U. S. Constitution, 
18 Geo. Wash. L. Rev. 50, 54 (1949–1950); Samuelson, Benson Revis-
ited: The Case Against Patent Protection for Algorithms and Other
Computer-Related Inventions, 39 Emory L. J. 1025, 1033, n.  24 (1990);
Seidel 10, 13; see also Great Atlantic & Pacific Tea Co. v. Supermarket 
Equipment Corp., 340 U. S. 147, 154 (1950) (Douglas, J., concurring)
(explaining that in the Framers’ view, an “invention, to justify a patent,
had to serve the ends of science—to push back the frontiers of chemis-

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24 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
Thus, fields such as business and finance were not 
generally considered part of the “useful arts” in the found-
ing Era.  See, e.g., The Federalist No. 8, p. 69 (C. Rossiter 
ed. 1961) (A. Hamilton) (distinguishing between “the arts
of industry, and the science of finance”); 30 The Writings
of George Washington 1745–1799, p.  186  (J. Fitzpatrick
ed. 1939) (writing in a letter that “our commerce has been
considerably curtailed,” but “the useful arts have been
almost imperceptible pushed to a considerable degree of 
perfection”).  Indeed, the same delegate to the Constitu-
tional Convention who gave an address in which he listed 
triumphs in the useful arts distinguished between those
arts and the conduct of business.  He explained that inves-
tors were now attracted to the “manufactures and the 
useful arts,” much as they had long invested in “com-
merce, navigation, stocks, banks, and insurance compa-
nies.”  T. Coxe, A Statement of the Arts and Manufactures 
of the United States of America for the Year 1810, (1814),
in 2 American State Papers, Finance 666, 688 (1832). 
Some scholars have remarked, as did Thomas Jefferson, 
that early patent statutes neither included nor reflected
any serious debate about the precise scope of patentable 
—————— 
try, physics, and the like; to make a distinctive contribution to scientific
knowledge”); In re Waldbaum, 457 F. 2d 997, 1003 (CCPA 1972) (Rich,
J., concurring) (“ ‘The phrase “technological arts,” as we have used it, is
synonymous with the phrase “useful arts” as it appears in Article I,
Section 8 of the Constitution’ ”);  Paulik v. Rizkalla, 760 F. 2d 1270, 
1276 (CA Fed. 1985) (explaining that “useful arts” is “the process today
called technological innovation”); Thomas, The Post-Industrial Patent 
System, 10 Fordham Intell. Prop. Media & Ent. L. J. 3, 32–55 (1999)
(cataloguing early understandings of technological arts).  This view 
may be supported, for example, by an 1814 grant to Harvard University
to create a “Professorship on the Application of Science to the Useful 
Arts,” something that today might be akin to applied science or engi-
neering. See M. James, Engineering an Environment for Change: 
Bigelow, Peirce, and Early Nineteenth-Century Practical Education at 
Harvard, in Science at Harvard University: Historical Perspectives 59
(C. Elliott & M. Rossiter eds. 1992). 

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25 
STEVENS, J., concurring in judgment 
subject matter.  See, e.g.,  Graham, 383 U. S., at 9–10 
(discussing Thomas Jefferson’s observations).  It has been 
suggested, however, that “[p]erhaps this was in part a
function of an understanding—shared widely among
legislators, courts, patent office officials, and inventors—
about what patents were meant to protect.  Everyone
knew that manufactures and machines were at the core of 
the patent system.”  Merges, Property Rights for Business 
Concepts and Patent System Reform, 14 Berkeley Tech. 
L. J. 577, 585 (1999) (hereinafter Merges).  Thus, although
certain processes, such as those related to the technology
of the time, might have been considered patentable, it is 
possible that “[a]gainst this background, it would have
been seen as absurd for an entrepreneur to file a patent” 
on methods of conducting business.  Ibid. 
Development of American Patent Law 
During the first years of the patent system, no patents
were issued on methods of doing business.30 Indeed, for 
some time, there were serious doubts as to “the patentabil-
ity of processes per se,” as distinct from the physical end 
product or the tools used to perform a process.  Id., at 581– 
582.31 
Thomas Jefferson was the “ ‘first administrator of our 
patent system’ ” and “the author of the 1793 Patent Act.” 
Graham, 383 U. S., at 7.  We have said that his “conclu-
sions as to conditions of patentability . . . are worthy of 
note.”  Ibid. at 7.  During his time administering the sys-
tem, Jefferson “saw clearly the difficulty” of deciding what 
—————— 
30 See Walterscheid, To Promote the Progress 173–178; Pollack 107–
108. 
31 These doubts ended by the time of Cochrane v. Deener, 94 U. S. 780 
(1877), in which we held that “a process may be patentable irrespective
of the particular form of the instrumentalities used,” and therefore one
may patent “an act, or series of acts, performed upon the subject matter
to be transformed and reduced to a different state or thing.”  Id., at 788. 

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26 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
should be patentable.32  Id., at 9.  He drafted the 1793 Act, 
id., at 7, and, years later, explained that in that Act “ ‘the 
whole was turned over to the judiciary, to be matured into
a system, under which every one might know when his 
actions were safe and lawful,’ ” id., at 10 (quoting Letter to 
Issac McPherson, in VI Writings of Thomas Jefferson 181–
182 (H. Washington ed. 1861)).  As the Court has ex-
plained, “Congress agreed with  Jefferson  . . .  that  the 
courts should develop additional conditions for patentabil-
ity.”  Graham, 383 U. S., at 10.  Thus “[a]lthough the 
Patent Act was amended, revised or codified some 50 
times between 1790 and 1950, Congress steered clear” of 
adding statutory requirements of patentability.  Ibid.  For 
nearly 160 years, Congress retained the term “useful arts,” 
see, e.g., Act of July 4, 1836, ch. 357, 5 Stat. 117, leaving 
“wide latitude for judicial construction . . . to keep pace
with industrial development,” Berman, Method Claims, 17
J. Pat. Off. Soc. 713, 714 (1935) (hereinafter Berman). 
Although courts occasionally struggled with defining 
what was a patentable “art” during those 160 years, they 
consistently rejected patents on methods of doing busi-
ness.  The rationales for those decisions sometimes varied. 
But there was an overarching theme, at least in dicta:
Business methods are not patentable arts.  See, e.g., 
United States Credit Sys. Co. v.  American Credit Indem. 
Co., 53 F. 818, 819 (CC NY 1893) (“method of insuring
against loss by bad debts” could not be patented “as an
art”);  Hotel Security Checking Co. v. Lorraine Co., 160 F. 
467, 469 (CA2 1908) (“A system of transacting business
disconnected from the means for carrying out the system 
is not, within the most liberal interpretation of the term, 
—————— 
32 A skeptic of patents, Jefferson described this as “drawing a line
between things which are worth to the public the embarrassment of a 
patent, and those which are not.”  13 Writings of Thomas Jefferson 335 
(Memorial ed. 1904). 

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27 
STEVENS, J., concurring in judgment 
an art”); Guthrie v. Curlett, 10 F. 2d 725, 726 (CA2 1926) 
(method of abbreviating rail tariff schedules, “if it be
novel, is not the kind of art protected by the patent acts”); 
In re Patton, 127 F. 2d 324, 327–328 (CCPA 1942) (holding 
that novel “ ‘interstate and national fire-fighting system’ ” 
was not patentable because, inter alia, “a system of trans-
acting business, apart from the means for carrying out 
such system is not” an art within the meaning of the 
patent law, “nor is an abstract idea or theory, regardless of
its importance or . . . ingenuity”); Loew’s Drive-In Thea-
tres, Inc. v. Park-In Theatres, Inc., 174 F. 2d 547, 552 (CA1
1949) (“[A] system for the transaction of business, such,
for example, as the cafeteria system for transacting the 
restaurant business . . . however novel, useful, or commer-
cially successful is not patentable apart from the means
for making the system practically useful, or carrying it
out”);  Joseph E. Seagram & Sons, Inc. v. Marzall, 180 
F. 2d 26, 28 (CADC 1950) (method of focus-group testing 
for beverages is not patentable subject matter); see also 
In re  Howard, 394 F. 2d 869, 872 (CCPA 1968) (Kirk-
patrick, J., concurring) (explaining that a “method of doing 
business” cannot be patented).  Between 1790 and 1952, 
this Court never addressed the patentability of business 
methods.  But we consistently focused the inquiry on 
whether an “art” was connected to a machine or physical
transformation,33 an inquiry that would have excluded 
methods of doing business. 
By the early 20th century, it was widely understood that 
a series of steps for conducting business could not be 
patented.  A leading treatise, for example, listed “ ‘systems’ 
of business” as an “unpatentable subjec[t].”  1 A. Deller, 
—————— 
33 See, e.g., Expanded Metal Co. v. Bradford, 214 U. S. 366, 383, 385– 
386 (1909); The Telephone Cases, 126 U. S., at 533–537; Cochrane, 94 
U. S., at 787–788; Burden, 15 How., at 267–268. 

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28 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
Walker on Patents §18, p.  62 (1937).34  Citing many of the 
cases listed above, the treatise concluded that a “method of 
transacting business” is not an “ ‘art.’ ”  Id., §22, at 69; see
also L. Amdur, Patent Law and Practice §39, p.  53 (1935)
(listing “Methods of doing business” as an “Unpatentable 
[A]r[t]”); Berman 718 (“[C]ases have been fairly unani-
mous in denying patentability to such methods”); Tew,
Method of Doing Business, 16 J. Pat. Off. Soc. 607 (1934) 
(“It is probably settled by long practice and many prece-
dents that ‘methods of doing business,’ as these words are
generally understood, are unpatentable”).  Indeed, “[u]ntil
recently” it was still “considered well established that
[business] methods were non-statutory.”  1 R. Moy, Walker 
on Patents §5:28, p. 5–104 (4th ed. 2009).35 
Modern American Patent Law 
By the mid-1900’s, many courts were construing the
term “art” by using words such as “method, process, sys-
tem, or like terms.”  Berman 713; see Expanded Metal Co. 
v. Bradford, 214 U. S. 366, 382 (1909) (“The word ‘process’ 
has been brought into the decisions because it is suppos-
edly an equivalent form of expression or included in the 
—————— 
34 See also 1  A. Deller, Walker on Patents §26, p. 152 (2d ed. 1964) (A 
“ ‘system’ or method of transacting business is not [a process], nor does 
it come within any other designation of patentable subject matter”). 
35 Although a few patents issued before 1952 that related to methods 
of doing business, see United States Patent and Trademark Office, 
Automated Financial or Management Data Processing Methods, online 
at http://www.uspto.gov/web/menu/busmethp/index.html (all Internet 
materials as visited June 26, 2010, and available in Clerk of Court’s 
case file), these patents were rare, often issued through self-
registration rather than any formalized patent examination, generally
were not upheld by courts, and arguably are distinguishable from pure 
patents on business methods insofar as they often involved the manu-
facture of new objects.  See In re Bilski, 545 F. 3d 943, 974, and n. 18 
(CA Fed. 2008) (case below) (Dyk, J., concurring); Pollack 74–75; 
Walterscheid, To Promote the Progress 243. 

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29 
STEVENS, J., concurring in judgment 
statutory designation of a new and useful art”).36  Thus in 
1952, when Congress updated the patent laws as part of 
its ongoing project to revise the United States Code, it 
changed the operative language in §101, replacing the 
term “art” with “process” and adding a definition of “proc-
ess” as a “process, art or method,” §100(b).
That change was made for clarity and did not alter the
scope of a patentable “process.”  See Diehr, 450 U. S., at 
184.  The new terminology was added only in recognition
of the fact that courts had been interpreting the category
“art” by using the terms “process or method”; Congress 
thus wanted to avoid “the necessity of explanation that the
word ‘art’ as used in this place means ‘process or method.’ ”  
S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952) (hereinafter
S. Rep. 1979); accord, H. R. Rep. No. 1923, 82d Cong., 2d
Sess., 6 (1952) (hereinafter H. R. Rep. 1923); see also id., 
at 17 (explaining that “the word ‘art’ ” in §101 “has been 
interpreted by the courts as being practically synonymous
with process or method,” and that the switch to the word
“[p]rocess” was intended only for clarity).37 
It appears that when Congress changed the language in 
§101 to incorporate the prevailing judicial terminology, it 
merely codified the prevailing judicial interpretation of 
that category of subject matter.  See Diehr, 450 U. S., at 
184; see also Barber v. Gonzales, 347 U. S. 637, 641 (1954) 
(“While it is true that statutory language should be inter-
preted whenever possible according to common usage,
some terms acquire a special technical meaning by a 
process of judicial construction”).  Both the Senate and 
House Committee Reports explained that the word “proc-
—————— 
36 For examples of such usage, see The Telephone Cases, 126 U. S., at 
533, and Burden, 15 How., at 267. 
37 See also 98 Cong. Rec. A415 (1952) (remarks of Rep. Bryson) (de-
scribing, after the fact, the 1952 Patent Act, and explaining that “[t]he 
word ‘art’ was changed to ‘process’ in order to clarify its meaning.  No 
change in substance was intended”). 

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30 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
ess” was used in §101 “to clarify the present law as to the 
patentability of certain types of processes or methods as to 
which some insubstantial doubts have been expressed.”
S. Rep. 1979, at 5; accord, H. Rep. 1923, at 6.  And both 
noted that those terms were used to convey the prevailing 
meaning of the term “art,” “as interpreted” by courts,
S. Rep. 1979, at 17; accord, H. Rep. 1923, at 17.  Indeed, 
one of the main drafters of the Act explained that the
definition of the term “process” in §100(b) reflects “how the 
courts have construed the term ‘art.’ ”  Tr. of address by
Judge Giles S. Rich to the New York Patent Law Associa-
tion 7–8 (Nov. 6, 1952).
As discussed above, by this time, courts had consistently
construed the term “art” to exclude methods of doing 
business.  The 1952 Act likely captured that same mean-
ing.38    Cf.  Graham, 383 U. S., at 16–17 (reasoning that 
because a provision of the 1952 Act “paraphrases language 
which has often been used in decisions of the courts” and 
was “added to the statute for uniformity and definiteness, ” 
that provision should be treated as “a codification of judi-
cial precedents”).39  Indeed, Judge Rich, the main drafter 
—————— 
38 The 1952 Act also retained the language “invents or discovers,” 
which by that time had taken on a connotation that would tend to
exclude business methods.  See B. Evans & C. Evans, A Dictionary of
Contemporary Usage 137 (1957) (explaining that “discover; invent”
means “to make or create something new, especially, in modern usage, 
something ingeniously devised to perform mechanical operations”). 
39 As explained in Part II, supra, the Court engages in a Jekyll-and-
Hyde form of interpretation with respect to the word “process” in §101.
It rejects the interpretation I proffer because the words “process” and 
“method” do not, on their face, distinguish between different series of 
acts.  Ante, at 10.  But it also rejects many sorts of processes without a
textual basis for doing so.  See ante, at 4–5, 7, 12–15.  And while the 
Courts rests a great deal of weight on Parker  v.  Flook, 437 U. S. 584 
(1978), for its analysis of abstract ideas, the Court minimizes Flook’s 
rejection of “a purely literal reading of §101,” as well as Flook’s reliance 
on the historical backdrop of §101 and our understanding of what “the 
statute was enacted to protect,” id., at 588–590, 593; see also Diamond 

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31 
STEVENS, J., concurring in judgment 
of the 1952 Act, later explained that “the invention of a 
more effective organization of the materials in, and the
techniques of teaching a course in physics, chemistry, or 
Russian is not a patentable invention because it is outside
of the enumerated categories of ‘process, machine, manu-
facture, or composition of matter, or any new and useful
improvement thereof.’ ”  Principles of Patentability, 28
Geo. Wash. L. Rev. 393, 394 (1960).  “Also outside that 
group,” he added, was a process for doing business: “the 
greatest inventio[n] of our times, the diaper service.” 
Ibid.40 
“Anything Under the Sun” 
Despite strong evidence that Congress has consistently 
authorized patents for a limited class of subject matter 
and that the 1952 Act did not alter the nature of the then-
existing limits, petitioners and their amici emphasize a
single phrase in the Act’s legislative history, which sug-
gests that the statutory subject matter “ ‘include[s] any-
thing under the sun that is made by man.’ ”  Brief for 
Petitioners 19 (quoting Chakrabarty, 447 U. S., at 309, in 
turn quoting S. Rep. 1979, at 5).  Similarly, the Court 
relies on language from our opinion in Chakrabarty  that 
was based in part on this piece of legislative history.  See 
ante, at 4, 6. 
This reliance is misplaced.  We have never understood 
—————— 
v.  Diehr, 450 U. S. 175, 192 (1981) (explaining that a “claim satisfies 
the requirements of §101” when it “is performing a function which the 
patent laws were designed to protect”). 
40 Forty years later, Judge Rich authored the State Street opinion that
some have understood to make business methods patentable.  But State 
Street  dealt with whether a piece of software could be patented and
addressed only claims directed at machines, not processes.  His opinion 
may therefore be better understood merely as holding that an otherwise
patentable process is not unpatentable simply because it is directed
toward the conduct of doing business—an issue the Court has no 
occasion to address today.  See State Street, 149 F. 3d, at 1375. 

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32 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
that piece of legislative history to mean that any series of 
steps is a patentable process.  Indeed, if that were so, then 
our many opinions analyzing what is a patentable process 
were simply wastes of pages in the U. S. Reports.  And to 
accept that errant piece of legislative history as widening 
the scope of the patent law would contradict other evi-
dence in the congressional record, as well as our presump-
tion that the 1952 Act merely codified the meaning of 
“process” and did not expand it, see Diehr, 450 U. S., at 
184. 
Taken in context, it is apparent that the quoted lan-
guage has a far less expansive meaning.  The full sentence 
in the Committee Reports reads: “A person may have
‘invented’ a machine or a manufacture, which may include 
anything under the sun that is made by man, but it is not 
necessarily patentable under section 101 unless the condi-
tions of [this] title are fulfilled.”  S.  Rep. 1979, at 5; H. R. 
Rep. 1923, at 6.  Viewed as a whole, it seems clear that 
this language does not purport to explain that “anything 
under the sun” is patentable.  Indeed, the language may 
be understood to state the exact opposite: that “[a] person
may have ‘invented’ . . . anything under the sun,” but that 
thing “is not necessarily patentable under section 101.”
Thus, even in the Chakrabarty opinion, which relied on 
this quote, we cautioned that the 1952 Reports did not 
“suggest that §101 has no limits or that it embraces every 
discovery.” 447 U. S., at 309. 
Moreover, even if the language in the Committee Re-
ports was meant to flesh out the meaning of any portion of 
§101, it did not purport to define the term “process.”  The 
language refers only to “manufacture[s]” and “machine[s],” 
tangible objects “made by man.”  It does not reference the 
“process” category of subject matter (nor could a process be
comfortably described as something “made by man”).  The 
language may also be understood merely as defining the 
term “invents” in §101.  As Judge Dyk explained in his 

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33 
STEVENS, J., concurring in judgment 
opinion below, the phrase “made by man” “is reminiscent” 
of a 1790’s description of the limits of English patent law,
that an “invention must be ‘made by man’ ” and cannot be 
“ ‘a philosophical principle only, neither organized or capa-
ble of being organized’ from a patentable manufacture.”
545 F. 3d, at 976 (quoting Hornblower v. Boulton, 8 T. R. 
95, 98 (K.  B. 1799)).   
The 1952 Act, in short, cannot be understood as expand-
ing the scope of patentable subject matter by suggesting
that any series of steps may be patented as a “process” 
under §101.  If anything, the Act appears to have codified 
the conclusion that subject matter which was understood 
not to be patentable in 1952 was to remain unpatentable. 
Our recent case law reinforces my view that a series of
steps for conducting business is not a “process” under 
§101.  Since Congress passed the 1952 Act, we have never 
ruled on whether that Act authorizes patents on business
methods.  But we have cast significant doubt on that 
proposition by giving substantial weight to the machine-
or-transformation test, as general methods of doing busi-
ness do not pass that test.  And more recently, Members of
this Court have noted that patents on business methods 
are of “suspect validity.”  eBay Inc. v. MercExchange, L. L. 
C., 547 U. S. 388, 397 (2006) (KENNEDY, J., concurring). 
*  *  * 
Since at least the days of Assyrian merchants, people
have devised better and better ways to conduct business. 
Yet it appears that neither the Patent Clause, nor early 
patent law, nor the current §101 contemplated or was
publicly understood to mean that such innovations are
patentable.  Although it may be difficult to define with
precision what is a patentable “process” under §101, the 
historical clues converge on one conclusion: A business 
method is not a “process.”  And to the extent that there is 
ambiguity, we should be mindful of our judicial role.  “[W]e 

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34 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
must proceed cautiously when we are asked to extend
patent rights” into an area that the Patent Act likely was 
not “enacted to protect,” Flook, 437 U. S., at 596, 593, lest 
we create a legal regime that Congress never would have 
endorsed, and that can be repaired only by disturbing
settled property rights. 
V 
Despite the strong historical evidence that a method of 
doing business does not constitute a “process” under §101,
petitioners nonetheless argue—and the Court suggests in 
dicta,  ante, at 10–11—that a subsequent law, the First 
Inventor Defense Act of 1999, “must be read together” 
with §101 to make business methods patentable.  Brief for 
Petitioners 29.  This argument utilizes a flawed method of
statutory interpretation and ignores the motivation for the 
1999 Act. 
In 1999, following a Federal Circuit decision that inti-
mated business methods could be patented, see State 
Street,  149 F. 3d 1368, Congress moved quickly to limit
the potential fallout.  Congress passed the 1999 Act, codi-
fied at 35 U. S. C. §273, which provides a limited defense 
to claims of patent infringement, see §273(b), regarding 
certain “method[s] of doing or conducting business,” 
§273(a)(3).
It is apparent, both from the content and history of the
Act, that Congress did not in any way ratify State Street 
(or, as petitioners contend, the broadest possible reading 
of  State Street).  The Act merely limited one potential 
effect of that decision: that businesses might suddenly find 
themselves liable for innocently using methods they as-
sumed could not be patented.  The Act did not purport to
amend the limitations in §101 on eligible subject matter.
Indeed, Congress placed the statute in Part III of Title 35,
which addresses “Patents and Protection of Patent 
Rights,” rather than in Part II, which contains §101 and 

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35 
STEVENS, J., concurring in judgment 
addresses “Patentability of Inventions and Grant of Pat-
ents.”  Particularly because petitioners’ reading of the
1999 Act would expand §101 to cover a category of proc-
esses that have not “historically been eligible” for patents, 
Diehr, 450 U. S., at 184, we should be loathe to conclude 
that Congress effectively amended §101 without saying so 
clearly.  We generally presume that Congress “does not,
one might say, hide elephants in mouseholes.”  Whitman 
v.  American Trucking Assns., Inc., 531 U. S. 457, 468 
(2001).
The Act therefore is, at best, merely evidence of 1999 
legislative views on the meaning of the earlier, 1952 Act. 
“[T]he views of a subsequent Congress,” however, “form a
hazardous basis for inferring the intent of an earlier one.” 
United States v. Price, 361 U. S. 304, 313 (1960).  When a 
later statute is offered as “an expression of how the . . . 
Congress interpreted a statute passed by another Con-
gress . . . a half century before,” “such interpretation has 
very little, if any, significance.”  Rainwater v. United 
States, 356 U. S. 590, 593 (1958). 
Furthermore, even assuming that Congress’ views at 
the turn of the 21st century could potentially serve as a 
valid basis for interpreting a statute passed in the mid-
20th century, the First Inventor Defense Act does not aid 
petitioners because it does not show that the later Con-
gress itself understood §101 to cover business methods.  If 
anything, it shows that a few judges on the Federal Cir-
cuit understood §101 in that manner and that Congress
understood what those judges had done.  The Act appears
to reflect surprise and perhaps even dismay that business
methods might be patented.  Thus, in the months follow-
ing  State Street, congressional authorities lamented that
“business methods and processes . . . until recently were 
thought not to be patentable,” H. R. Rep. No. 106–464,
p. 121 (1999); accord, H. R. Rep. No. 106–287, pt.  1, p.  31 

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36 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
(1999).41  The fact that Congress decided it was appropri-
ate to create a new defense to claims that business method 
patents were being infringed merely demonstrates recog-
nition that such claims could create a significant new 
problem for the business community.
The Court nonetheless states that the 1999 Act “ac-
knowledges that there may be business method patents,” 
thereby “clarify[ing]” its “understanding” of §101.  Ante, at 
11.  More specifically, the Court worries that if we were to
interpret the 1952 Act to exclude business methods, our 
interpretation “would render §273 meaningless.”  Ibid.  I 
agree that “[a] statute should be construed so that effect is 
given to all its provisions.”  Corley v. United States, 556 
U. S. ___, ___ (2009) (slip op., at 9) (internal quotation 
marks omitted).  But it is a different matter altogether
when the Court construes one statute, the 1952 Act, to 
give effect to a different statute, the 1999 Act.  The canon 
on which the Court relies is predicated upon the idea that
“[a] statute is passed as a whole.”  2A N. Singer & J.
Singer, Statutes and Statutory Construction §46:5, p. 189
(7th ed. 2007).  But the two statutes in question were not 
passed as a whole. 
Put another way, we ordinarily assume, quite sensibly, 
that Congress would not in one statute include two provi-
sions that are at odds with each other.  But as this case 
shows, that sensible reasoning can break down when 
—————— 
41 See also 145 Cong. Rec. 30985 (1999) (remarks of Sen. Schumer) 
(explaining that “[i]n State Street, the Court did away with the so-called 
‘business methods’ exception to statutory patentable subject matter,”
and “[t]he first inventor defense will provide . . . important, needed
protections in the face of the uncertainty presented by . . . the State 
Street case”); id., at 31007 (remarks of Sen. DeWine) (“Virtually no one 
in the industry believed that these methods or processes were pat-
entable”);  id., at 19281 (remarks of Rep. Manzullo) (“Before the State
Street Bank and Trust case . . . it was universally thought that meth-
ods of doing or conducting business were not patentable items”). 

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37 
STEVENS, J., concurring in judgment 
applied to different statutes.42  The 1999 Act was passed to 
limit the impact of the Federal Circuit’s then-recent state-
ments on the 1952 Act.  Although repudiating that judicial
dictum (as we should) might effectively render the 1999
Act a nullity going forward, such a holding would not 
mean that it was a nullity when Congress enacted it. 
Section 273 may have been a technically unnecessary 
response to confusion about patentable subject matter, but 
it appeared necessary in 1999 in light of what was being 
discussed in legal circles at the time.43  Consider the logi-
cal implications of the Court’s approach to this question: 
If, tomorrow, Congress were to conclude that patents on
business methods are so important  that the special in-
fringement defense in §273 ought to be abolished, and 
thus repealed that provision, this could paradoxically 
strengthen  the case against such patents because there 
would no longer be a §273 that “acknowledges . . . business 
method patents,” ante, at 11.  That is not a sound method 
of statutory interpretation.   
In light of its history and purpose, I think it obvious 
—————— 
42 The Court opines that “[t]his principle, of course, applies to inter-
preting any two provisions in the U. S. Code, even when Congress 
enacted the provisions at different times.”  Ante, at 11 (emphasis 
added).  The only support the Court offers for this proposition is a 1937
opinion for three Justices, in Hague v. Committee for Industrial Or-
ganization, 307 U. S. 496, 528–530 (1939) (opinion of Stone, J.).  But 
that opinion is inapposite.  Although Justice Stone stated that two
provisions “must be read together,” id., at 530, he did so to explain that
an ambiguity in a later-in-time statute must be understood in light of 
the earlier-in-time framework against which the ambiguous statute 
was passed, id., at 528–530, particularly because the later statute 
explicitly stated that it “shall not be construed to apply” to the provi-
sion created by an earlier Act, id., at 528. 
43 I am not trying to “overcome” an “established rule of statutory in-
terpretation” with “judicial speculation as to the subjective intent of 
various legislators,” ante, at 11, but, rather, I am explaining why the
Court has illogically expanded the canon upon which it relies beyond 
that canon’s logical underpinnings. 

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38 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
that the 1999 Congress would never have enacted §273 if 
it had foreseen that this Court would rely on the provision 
as a basis for concluding that business methods are pat-
entable.  Section 273 is a red herring; we should be focus-
ing our attention on §101 itself.   
VI 
The constitutionally mandated purpose and function of 
the patent laws bolster the conclusion that methods of 
doing business are not “processes” under §101. 
The Constitution allows Congress to issue patents “[t]o
promote the Progress of . . . useful Arts,” Art. I, §8, cl. 8. 
This clause “is both a grant of power and a limitation.” 
Graham, 383 U. S., at 5.  It “reflects a balance between the 
need to encourage innovation and the avoidance of mo-
nopolies which stifle competition without any concomitant 
advance in the ‘Progress of Science and useful Arts.’” 
Bonito Boats, 489 U. S., at 146.  “This is the standard 
expressed in the Constitution and it may not be ignored.
And it is in this light that patent validity ‘requires refer-
ence to [the] standard written into the Constitution.’ ”  
Graham, 383 U. S., at 6 (quoting Great Atlantic & Pacific 
Tea Co. v. Supermarket Equipment Corp., 340 U. S. 147, 
154 (1950) (Douglas, J., concurring) (emphasis deleted));
see also Grant v. Raymond, 6 Pet. 218, 241–242 (1832)
(explaining that patent “laws which are passed to give
effect to this [constitutional] purpose ought, we think, to
be construed in the spirit in which they have been
made”).44 
—————— 
44 See also Quanta Computer, Inc. v. LG Electronics, Inc., 553 U. S. 
617, 626 (2008) (“ ‘[T]he primary purpose of our patent laws is not the 
creation of private fortunes for the owners of patents but is “to promote
the progress of science and useful arts” ’ ” (quoting Motion Picture 
Patents Co. v. Universal Film Mfg. Co., 243 U. S. 502, 511 (1917))); 
Pfaff v. Wells Electronics, Inc., 525 U. S. 55, 63 (1998) (“[T]he patent
system represents a carefully crafted bargain that encourages both the
creation and the public disclosure of new and useful advances in 

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39 
STEVENS, J., concurring in judgment 
Thus, although it is for Congress to “implement the 
stated purpose of the Framers by selecting the policy 
which in its judgment best effectuates the constitutional 
aim,”  Graham, 383 U. S., at 6, we interpret ambiguous
patent laws as a set of rules that “wee[d] out those inven-
tions which would not be disclosed or devised but for the 
inducement of a patent,” id., at 11, and that “embod[y]” 
the “careful balance between the need to promote innova-
tion and the recognition that imitation and refinement 
through imitation are both necessary to invention itself
and the very lifeblood of a competitive economy,” Bonito 
Boats, 489 U. S., at 146.  And absent a discernible signal
from Congress, we proceed cautiously when dealing with 
patents that press on the limits of the “‘standard written
into the constitution,’ ” Graham, 383 U. S., at 6, for at the 
“fringes of congressional power,” “more is required of
legislatures than a vague delegation to be filled in later,” 
Barenblatt v. United States, 360 U. S. 109, 139–140 (1959) 
(Black, J., dissenting); see also Greene v. McElroy, 360 
U. S. 474, 507 (1959) (“[D]ecisions of great constitutional 
import and effect” “requir[e] careful and purposeful con-
sideration by those responsible for enacting and imple-
menting our laws”).  We should not casually risk exceeding
the constitutional limitation on Congress’ behalf. 
The Court has kept this “constitutional standard” in
mind when deciding what is patentable subject matter 
under §101.  For example, we have held that no one can 
patent “laws of nature, natural phenomena, and abstract
ideas.”  Diehr, 450 U. S., at 185.  These “are the basic tools 
of scientific and technological work,” Benson, 409 U. S., at 
67, and therefore, if patented, would stifle the very pro-
gress that Congress is authorized to promote, see, e.g., 
O’Reilly, 15 How., at 113 (explaining that Morse’s patent
on electromagnetism for writing would preempt a wide 
—————— 
technology”). 

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40 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
swath of technological developments). 
Without any legislative guidance to the contrary, there
is a real concern that patents on business methods would 
press on the limits of the “standard expressed in the Con-
stitution,”  Graham, 383 U. S., at 6, more likely stifling 
progress than “promot[ing]” it.  U. S. Const., Art. I, §8, 
cl. 8.  I recognize that not all methods of doing business 
are the same, and that therefore the constitutional “bal-
ance,”  Bonito Boats, 489 U. S., at 146, may vary within 
this category.  Nevertheless, I think that this balance 
generally supports the historic understanding of the term
“process” as excluding business methods.  And a categori-
cal analysis fits with the purpose, as Thomas Jefferson 
explained, of ensuring that “ ‘every one might know when 
his actions were safe and lawful,’ ” Graham, 383 U. S., at 
10; see also Festo Corp. v. Shoketsu Kinzoku Kogyo Kabu-
shiki Co., 535 U. S. 722, 730–731 (2002) (“The monopoly is
a property right; and like any property right, its bounda-
ries should be clear.  This clarity is essential to promote 
progress”); Diehr, 450 U. S., at 219 (STEVENS, J., dissent-
ing) (it is necessary to have “rules that enable a conscien-
tious patent lawyer to determine with a fair degree of 
accuracy” what is patentable). 
On one side of the balance is whether a patent monopoly
is necessary to “motivate the innovation,” Pfaff  v.  Wells 
Electronics, Inc., 525 U. S. 55, 63 (1998).  Although there
is certainly disagreement about the need for patents,
scholars generally agree that when innovation is expen-
sive, risky, and easily copied, inventors are less likely to 
undertake the guaranteed costs of innovation in order to 
obtain the mere possibility of an invention that others can 
copy.45  Both common sense and recent economic scholar-
ship suggest that these dynamics of cost, risk, and reward 
—————— 
45 See generally W. Landes & R. Posner, The Economic Structure of
Intellectual Property Law 13–15 (2003). 

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41 
STEVENS, J., concurring in judgment 
vary by the type of thing being patented.46  And the func-
tional case that patents promote progress generally is 
stronger for subject matter that has “historically been 
eligible to receive the protection of our patent laws,” Diehr, 
450 U. S., at 184, than for methods of doing business.
Many have expressed serious doubts about whether 
patents are necessary to encourage business innovation.47 
Despite the fact that we have long assumed business
methods could not be patented, it has been remarked that 
“the chief business of the American people, is business.”48 
Federal Express developed an overnight delivery service 
and a variety of specific methods (including shipping
through a central hub and online package tracking) with-
out a patent.  Although counterfactuals are a dubious form 
of analysis, I find it hard to believe that many of our en-
trepreneurs forwent business innovation because they 
could not claim a patent on their new methods.
“[C]ompanies have ample incentives to develop business 
methods even without patent protection, because the 
competitive marketplace rewards companies that use
more efficient business methods.”  Burk & Lemley 1618.49 
Innovators often capture advantages from new business 
methods notwithstanding the risk of others copying their
innovation.  Some business methods occur in secret and 
—————— 
46 See,  e.g., Burk & Lemley, Policy Levers in Patent Law, 89 Va.
L. Rev. 1575, 1577–1589 (2003) (hereinafter Burk & Lemley). 
47 See,  e.g., Burk & Lemley 1618; Carrier, Unraveling the Patent-
Antitrust Paradox, 150 U. Pa. L. Rev. 761, 826 (2002) (hereinafter 
Carrier); Dreyfuss, Are Business Methods Patents Bad for Business?
16 Santa Clara Computer & High Tech. L. J. 263, 274–277 (2000)
(hereinafter Dreyfuss); Posner, The Law and Economics of Intellectual
Property, 131 Daedalus 5 (Spring 2002). 
48 C. Coolidge, The Press Under a Free Government, in Foundations
of the Republic: Speeches and Addresses 187 (1926). 
49 See also Pollack 75–76 (“Since business methods are ‘useful’ when 
they directly earn revenue, they are inherently unlikely to be under-
produced”). 

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42 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
therefore can be protected with trade secrecy.50    And  for  
those methods that occur in public, firms that innovate 
often capture long-term benefits from doing so, thanks to
various first mover advantages, including lockins, brand-
ing, and networking effects.51  Business innovation, more-
over, generally does not entail the same kinds of risk as 
does more traditional, technological innovation.  It gener-
ally does not require the same “enormous costs in terms of
time, research, and development,” Bicron, 416 U. S., at 
480, and thus does not require the same kind of “compen-
sation to [innovators] for their labor, toil, and expense,” 
Seymour v. Osborne, 11 Wall. 516, 533–544 (1871).52 
Nor, in many cases, would patents on business methods 
promote progress by encouraging “public disclosure.” 
Pfaff, 525 U. S., at 63; see also Brenner v. Manson, 383 
U. S. 519, 533 (1966) (“[O]ne of the purposes of the patent 
system is to encourage dissemination of information con-
cerning discoveries and inventions”).  Many business
methods are practiced in public, and therefore a patent 
does not necessarily encourage the dissemination of any-
thing not already known.  And for the methods practiced
in private, the benefits of disclosure may be small: Many
such methods are distributive, not productive—that is, 
they do not generate any efficiency but only provide a
means for competitors to one-up each other in a battle for
pieces of the pie.  And as the Court has explained, “it is 
—————— 
50 See R. Levin et al., Appropriating the Returns from Industrial Re-
search and Development, in 3 Brookings Papers on Econ. Activity 794–
795 (1987). 
51 See Burk & Lemley 1618; Dreyfuss 275; see generally Carrier 821–
823.  Concededly, there may some methods of doing business that do
not confer sufficient first-mover advantages.  See Abramowicz & Duffy,
Intellectual Property for Market Experimentation, 83 N. Y. U.  L. Rev. 
337, 340–342 (2008). 
52 See Burk & Lemley 1618; Carrier 826; Olson, Taking the Utilitar-
ian Basis for Patent Law Seriously: The Case For Restricting Pat-
entable Subject Matter, 82 Temp. L. Rev. 181, 231 (2009).  

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Cite as:  561 U. S. ____ (2010) 
43 
STEVENS, J., concurring in judgment 
hard to see how the public would be benefited by disclo-
sure” of certain business tools, since the nondisclosure of 
these tools “encourages businesses to initiate new and 
individualized plans of operation,” which “in turn, leads to 
a greater variety of business methods.”  Bicron, 416 U. S., 
at 483. 
In any event, even if patents on business methods were 
useful for encouraging innovation and disclosure, it would 
still be questionable whether they would, on balance, 
facilitate or impede the progress of American business. 
For even when patents encourage innovation and disclo-
sure, “too much patent protection can impede rather than
‘promote the Progress of . . . useful Arts.’ ”  Laboratory 
Corp. of America Holdings v. Metabolite Laboratories, Inc., 
548 U. S. 124, 126–127 (2006) (BREYER, J., dissenting 
from dismissal of certiorari).  Patents “can discourage 
research by impeding the free exchange of information,”
for example, by forcing people to “avoid the use of poten-
tially patented ideas, by leading them to conduct costly
and time-consuming searches of existing or pending pat-
ents, by requiring complex licensing arrangements, and by
raising the costs of using the patented” methods.  Id., at 
127.  Although “[e]very patent is the grant of a privilege of 
exacting tolls from the public,” Great Atlantic, 340 U. S., 
at 154 (Douglas, J., concurring), the tolls of patents on 
business methods may be especially high. 
The primary concern is that patents on business meth-
ods may prohibit a wide swath of legitimate competition
and innovation.  As one scholar explains, “it is useful to 
conceptualize knowledge as a pyramid: the big ideas are
on top; specific applications are at the bottom.” Dreyfuss 
275.  The higher up a patent is on the pyramid, the
greater the social cost and the greater the hindrance to
further innovation.53  Thus, this Court stated in Benson 
—————— 
53 See Dreyfuss 276; Merges & Nelson, On the Complex Economics of 

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44 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
that “[p]henomena of nature . . . , mental processes, and 
abstract intellectual concepts are not patentable, as they 
are the basic tools of scientific and technological work,”
409 U.  S., at 67; see also, Joseph E. Seagram & Sons, Inc., 
180 F. 2d, at 28 (“To give appellant a monopoly, through
the issuance of a patent, upon so great an area . . . would 
in our view impose without warrant of law a serious re-
straint upon the advance of science and industry”).  Busi-
ness methods are similarly often closer to “big ideas,” as
they are the basic tools of commercial  work.  They are
also, in many cases, the basic tools of further business
innovation: Innovation in business methods is often a 
sequential and complementary process in which imitation 
may be a “spur to innovation” and patents may “become an 
impediment.”  Bessen & Maskin, Sequential Innovation,
Patents, and Imitation, 40 RAND J. Econ. 611, 613 
(2009).54  “Think how the airline industry might now be
structured if the first company to offer frequent flyer miles
had enjoyed the sole right to award them.”  Dreyfuss 264.
“[I]mitation and refinement through imitation are both
necessary to invention itself and the very lifeblood of a 
competitive economy.”  Bonito Boats, 489 U. S., at 146. 
If business methods could be patented, then many busi-
ness decisions, no matter how small, could be potential
patent violations.  Businesses would either live in constant 
fear of litigation or would need to undertake the costs of 
searching through patents that describe methods of doing
business, attempting to decide whether their innovation is 
one that remains in the public domain.  See Long, Infor-
mation Costs in Patent and Copyright, 90 Va. L. Rev. 465, 
—————— 
Patent Scope, 90 Colum. L. Rev. 839, 873–878 (1990). 
54 See also Raskind, The State Street Bank Decision, The Bad Busi-
ness of Unlimited Patent Protection for Methods of Doing Business, 10
Fordham Intell. Prop. Media & Ent. L. J. 61, 102 (1999) (“Interactive 
emulation more than innovation is the driving force of business method
changes”).   

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Cite as:  561 U. S. ____ (2010) 
45 
STEVENS, J., concurring in judgment 
487–488 (2004) (hereinafter Long).  But as we have long 
explained, patents should not “embaras[s] the honest
pursuit of business with fears and apprehensions of con-
cealed liens and unknown liabilities to lawsuits and vexa-
tious accountings for profits made in good faith.”  Atlantic 
Works v. Brady, 107 U. S. 192, 200 (1883).55 
These effects are magnified by the “potential vagueness” 
of business method patents, eBay Inc., 547 U. S., at 397 
(KENNEDY, J., concurring).  When it comes to patents,
“clarity is essential to promote progress.”  Festo Corp., 535 
U. S., at 730–731.  Yet patents on methods of conducting
business generally are composed largely or entirely of 
intangible steps.  Compared to “the kinds of goods . . . 
around which patent rules historically developed,” it thus
tends to be more costly and time consuming to search
through, and to negotiate licenses for, patents on business
methods.  See Long 539, 470.56 
The breadth of business methods, their omnipresence in
our society, and their potential vagueness also invite a
particularly pernicious use of patents that we have long 
criticized.  As early as the 19th century, we explained that 
the patent laws are not intended to “creat[e] a class of 
—————— 
55 There is substantial academic debate, moreover, about whether the 
normal process of screening patents for novelty and obviousness can
function effectively for business methods.  The argument goes that
because business methods are both vague and not confined to any one 
industry, there is not a well-confined body of prior art to consult, and
therefore many “bad” patents are likely to issue, a problem that would
need to be sorted out in later litigation.  See, e.g., Dreyfuss 268–270;
Eisenberg, Analyze This: A Law and Economics Agenda for the Patent
System, 53 Vand. L. Rev. 2081, 2090 (2000); Merges 589–590. 
56 See also J. Bessen & M. Meurer, Patent Failure: How Judges, Bu-
reaucrats, and Lawyers Put Innovators at Risk 46–72 (2008) (hereinaf-
ter Bessen & Meurer); P. Menell & S. Scotchmer, Intellectual Property
Law, in 2 Handbook of Law and Economics 1500–1501, 1506 (M. 
Polinsky & S. Shavell eds. 2007).  Concededly, alterations in the rem-
edy structure, such as the First Inventor Defense Act of 1999, §4301 et 
seq., 113 Stat. 1536, codified at 35 U. S. C. §273, mitigate these costs. 

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46 BILSKI 
v. KAPPOS 
STEVENS, J., concurring in judgment 
speculative schemers who make it their business to watch 
the advancing wave of improvement, and gather its foam
in the form of patented monopolies, which enable them to 
lay a heavy tax upon the industry of the country, without 
contributing anything to the real advancement of the 
arts.”  Atlantic Works, 107 U. S., at 200.  Yet business 
method patents may have begun to do exactly that.  See 
eBay Inc., 547 U. S., at 396–397 (opinion of KENNEDY, J.).
These many costs of business method patents not only 
may stifle innovation, but they are also likely to “stifle 
competition,”  Bonito Boats, 489 U. S., at 146.  Even if a 
business method patent is ultimately held invalid, patent
holders may be able to use it to threaten litigation and to 
bully competitors, especially those that cannot bear the 
costs of a drawn out, fact-intensive patent litigation.57 
That can take a particular toll on small and upstart busi-
nesses.58  Of course, patents always serve as a barrier to
competition for the type of subject matter that is patented. 
But patents on business methods are patents on business 
itself.  Therefore, unlike virtually every other category of 
patents, they are by their very nature likely to depress the
dynamism of the marketplace.59 
—————— 
57 See generally Farrell & Shapiro, How Strong Are Weak Patents?
98 Amer. Econ. Rev. 1347 (2008); Meurer, Controlling Opportunistic
and Anti-Competitive Intellectual Property Litigation, 44 Boston 
College L. Rev. 509 (2003); Moore, Populism and Patents, 82 N. Y.
U. L. Rev. 69, 90–91 (2007). 
58 See Bessen & Meurer 176; Lessig, The Death of Cyberspace, 57
Wash. & Lee L. Rev. 337, 346–347 (2000). 
59 Congress and the courts have worked long and hard to create and 
administer antitrust laws that ensure businesses cannot prevent each
other from competing vigorously.  If methods of conducting business 
were themselves patentable, then virtually any novel, nonobvious 
business method could be granted a federally protected monopoly.  The 
tension this might create with our antitrust regime provides yet an-
other reason for skepticism that Congress would have wanted the 
patent laws to extend to business methods. 

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Cite as:  561 U. S. ____ (2010) 
47 
STEVENS, J., concurring in judgment 
*  *  * 
The constitutional standard for patentability is difficult 
to apply with any precision, and Congress has significant 
discretion to “implement the stated purpose of the Fram-
ers by selecting the policy which in its judgment best 
effectuates the constitutional aim,” Graham, 383 U. S., at 
6.  But Congress has not, either explicitly or implicitly, 
determined that patents on methods of doing business 
would effectuate this aim.  And as I understand their 
practical consequences, it is hard to see how they would. 
VII 
The Constitution grants to Congress an important 
power to promote innovation.  In its exercise of that power,
Congress has established an intricate system of intellec-
tual property.  The scope of patentable subject matter 
under that system is broad.  But it is not endless.  In the 
absence of any clear guidance from Congress, we have only 
limited textual, historical, and functional clues on which 
to rely.  Those clues all point toward the same conclusion:
that petitioners’ claim is not a “process” within the mean-
ing of §101 because methods of doing business are not, in
themselves, covered by the statute.  In my view, acknowl-
edging as much would be a far more sensible and re-
strained way to resolve this case.  Accordingly, while I
concur in the judgment, I strongly disagree with the
Court’s disposition of this case. 

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Cite as:  561 U. S. ____ (2010) 
1 
BREYER, J., concurring in judgment 
SUPREME COURT OF THE UNITED STATES 
_________________ 
No. 08–964 
_________________ 
BERNARD L. BILSKI AND RAND A. WARSAW, 
PETITIONERS v. DAVID J. KAPPOS, UNDER 
SECRETARY OF COMMERCE FOR INTEL- 
LECTUAL PROPERTY AND DIRECTOR, 
PATENT AND TRADEMARK OFFICE
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[June 28, 2010] 
JUSTICE BREYER, with whom JUSTICE SCALIA joins as to
Part II, concurring in the judgment. 
I 
I agree with JUSTICE STEVENS that a “general method of
engaging in business transactions” is not a patentable 
“process” within the meaning of 35 U. S. C. §101.  Ante, at 
2 (STEVENS, J., concurring in judgment).  This Court has 
never before held that so-called “business methods” are 
patentable, and, in my view, the text, history, and pur-
poses of the Patent Act make clear that they are not. 
Ante, at 10–47.  I would therefore decide this case on that 
ground, and I join JUSTICE STEVENS’ opinion in full. 
I write separately, however, in order to highlight the
substantial agreement among many Members of the Court
on many of the fundamental issues of patent law raised by 
this case.  In light of the need for clarity and settled law in
this highly technical area, I think it appropriate to do so. 
II 
In addition to the Court’s unanimous agreement that
the claims at issue here are unpatentable abstract ideas, it 
is my view that the following four points are consistent 

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2 BILSKI 
v. KAPPOS 
BREYER, J., concurring in judgment 
with both the opinion of the Court and JUSTICE STEVENS’ 
opinion concurring in the judgment: 
First, although the text of §101 is broad, it is not with-
out limit.  See ante, at 4–5 (opinion of the Court); ante, at 
10 (STEVENS, J., concurring in judgment).  “[T]he underly-
ing policy of the patent system [is] that ‘the things which
are worth to the public the embarrassment of an exclusive
patent,’ . . . must outweigh the restrictive effect of the 
limited patent monopoly.”  Graham v. John Deere Co. of 
Kansas City, 383 U. S. 1, 10–11 (1966) (quoting Letter 
from Thomas Jefferson to Isaac McPherson (Aug. 13,
1813), in 6 Writings of Thomas Jefferson 181 (H. Washing-
ton ed.)).  The Court has thus been careful in interpreting
the Patent Act to “determine not only what is protected,
but also what is free for all to use.”  Bonito Boats, Inc. v. 
Thunder Craft Boats, Inc., 489 U. S. 141, 151 (1989).  In 
particular, the Court has long held that “[p]henomena of 
nature, though just discovered, mental processes, and 
abstract intellectual concepts are not patentable” under 
§101, since allowing individuals to patent these funda-
mental principles would “wholly pre-empt” the public’s
access to the “basic tools of scientific and technological
work.”  Gottschalk v. Benson, 409 U. S. 63, 67, 72 (1972); 
see also, e.g., Diamond v. Diehr, 450 U. S. 175, 185 (1981); 
Diamond v. Chakrabarty, 447 U. S. 303, 309 (1980). 
Second, in a series of cases that extend back over a 
century, the Court has stated that “[t]ransformation and 
reduction of an article to a different state or thing is the 
clue  to the patentability of a process claim that does not 
include particular machines.”  Diehr,  supra, at 184 (em-
phasis added; internal quotation marks omitted); see also, 
e.g., Benson, supra, at 70; Parker v. Flook, 437 U. S. 584, 
588, n. 9 (1978); Cochrane v. Deener, 94 U. S. 780, 788 
(1877).  Application of this test, the so-called “machine-or-
transformation test,” has thus repeatedly helped the Court
to determine what is “a patentable ‘process.’” Flook, supra, 

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Cite as:  561 U. S. ____ (2010) 
3 
BREYER, J., concurring in judgment 
at 589. 
Third, while the machine-or-transformation test has 
always been a “useful and important clue,” it has never
been the “sole test” for determining patentability.  Ante, at 
8; see also ante,  at 1 (STEVENS, J., concurring in judg-
ment);  Benson,  supra, at 71 (rejecting the argument that
“no process patent could ever qualify” for protection under 
§101 “if it did not meet the [machine-or-transformation] 
requirements”).  Rather, the Court has emphasized that a
process claim meets the requirements of §101 when, “con-
sidered as a whole,” it “is performing a function which the
patent laws were designed to protect (e.g., transforming or 
reducing an article to a different state or thing).”  Diehr, 
supra, at 192.  The machine-or-transformation test is thus 
an  important  example  of how a court can determine pat-
entability under §101, but the Federal Circuit erred in this
case by treating it as the exclusive test. 
Fourth, although the machine-or-transformation test is 
not the only test for patentability, this by no means indi-
cates that anything which produces a “ ‘useful, concrete, 
and tangible result,’ ”  State Street Bank & Trust Co. v. 
Signature Financial Group, Inc., 149 F. 3d 1368, 1373 (CA 
Fed. 1998), is patentable.  “[T]his Court has never made
such a statement and, if taken literally, the statement
would cover instances where this Court has held the con-
trary.”  Laboratory Corp. of America Holdings v. Metabo-
lite Laboratories, Inc., 548 U. S. 124, 136 (2006) (BREYER, 
J., dissenting from dismissal of certiorari as improvidently 
granted); see also, e.g., O’Reilly v. Morse, 15 How. 62, 117 
(1854);  Flook,  supra, at 590.  Indeed, the introduction of 
the “useful, concrete, and tangible result” approach to
patentability, associated with the Federal Circuit’s State 
Street decision, preceded the granting of patents that 
“ranged from the somewhat ridiculous to the truly ab-
surd.”  In re  Bilski, 545 F. 3d 943, 1004 (CA Fed. 2008)
(Mayer, J., dissenting) (citing patents on, inter alia, a 

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4 BILSKI 
v. KAPPOS 
BREYER, J., concurring in judgment 
“method of training janitors to dust and vacuum using 
video displays,” a “system for toilet reservations,” and a 
“method of using color-coded bracelets to designate dating
status in order to limit ‘the embarrassment of rejection’ ”); 
see also Brief for Respondent 40–41, and n. 20 (listing
dubious patents).  To the extent that the Federal Circuit’s 
decision in this case rejected that approach, nothing in
today’s decision should be taken as disapproving of that 
determination.  See ante, at 16; ante, at 2, n. 1 (STEVENS, 
J., concurring in judgment). 
In sum, it is my view that, in reemphasizing that the
“machine-or-transformation” test is not necessarily the 
sole test of patentability, the Court intends neither to de-
emphasize the test’s usefulness nor to suggest that many 
patentable processes lie beyond its reach. 
III 
With these observations, I concur in the Court’s 
judgment. 

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