Facts of the Case:
Applicants were denied a patent by the Patent and Trademark Office (PTO) for claims pertaining to a process of managing risk in commodities trading. The PTO examiner deemed the invention not to be of patentable subject matter under 35 U.S.C. Section 101. The Board of Patent Appeals and Interferences affirmed the decision.
On appeal, the U.S. Court of Appeals for the Federal Circuit affirmed. The court relied on Supreme Court precedent stating that an invention is patentable if: "1) it is tied to a particular machine or apparatus, or 2) it transforms a particular article into a different state or thing." Reasoning from this, it held that the applicants' invention clearly failed this test (machine-or-transformation test) and therefore did not constitute patentable subject matter.
