The eagerly awaited Bilski decision was published on October 30. While the Court reaffirmed that business methods are patentable, it rejected its previous "useful, concrete and tangible result" test, saying the "machine-or-transformation" test set out by the Supreme Court is the proper test to apply.

That test requires that, to be patentable, an invention must either be somehow tied to a machine or transformed into "a different state or thing".

The participants in Managing IP's webcast, held last Tuesday, dissected what the test means, what the decision as a whole signifies for the future for business method patents and what implications Bilski will have in other areas, such as life sciences.

The panellists were Charles Macedo of Amster Rothstein & Ebenstein, Charles Kwalwasser of Barclays Capital, Duane R Valz of Yahoo and Chris Holman of the University of Missouri-Kansas City School of Law.

Macedo, who outlined the key case law governing patentable subject matter in the US and dissected the Bilski decision, said that the Federal Circuit took a narrow of a view of Supreme Court precedent, by promulgating the so-called machine-or-transformation test as the only test that has been approved for determining patent eligibility.

"The Supreme Court has historically held that Section 101 is meant to be broadly construed," said Macedo. He added that he would have liked the Federal Circuit to have adopted a broader view of the scope of patent-eligible subject matter.

Charles Kwalwasser of Barclays Capital spoke about the problems Bilski might pose for the financial services industry, including "more confusion at the PTO as to what the 'tied to a machine' standard means".

However, Kwalwasser also said that much of the commentary characterising the decision as being bad for financial services is "not well-informed, because it assumes that the majority opinion is that patents are good for the industry".

Kwalwasser explained that, since most major institutions rely on "market inefficiencies", rather than patents, to bring innovations - specifically business methods - to market, the decision might be viewed by some as "a good thing for financial services as a whole". But he added that the question of whether the decision is good for innovation in the industry is still up for debate.

Yahoo!'s vice president of global patents, Duane Valz, next analysed the questions raised for the software industry by addressing the "good, bad and ugly" of the Bilski decision.

Valz said that, although the Court offered "some reassurance" and did "make better sense of an older test", the question remains problematic.

Referring to the decision's requirement that an invention be tied to a "specific apparatus", for instance, Valz asked: "What do you do in an age where you use virtual machines?"

Professor Chris Holman added to the debate by addressing some of the ruling's less obvious ramifications, specifically with respect to biotechnology and life sciences inventions.

Holman said that the decision, which renders patent ineligible all "claims drawn to fundamental principles set forth by the Supreme Court" - specifically, "laws of nature, natural phenomena, and abstract ideas" - does not make clear how to determine a "natural phenomenon" in a biological context, or what it means to "pre-empt" such a phenomenon.

"Some augmentation or refinement of the decision in the life sciences is going to be necessary," said Holman.

An archived version of the webcast can be viewed on Managing IP's homepage . For more information about these and other webcasts offered by Managing IP and to register, click here .