State Street Bank decision 

State Street Bank v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. 1998), 47 USPQ2d 1596, was a decision of the United States Court of Appeals for the Federal Circuit published on July 23, 1998, concerning United States patent law and more particularly the patentability of so-called business methods. Until the decision in In re Bilski, an invention was considered eligible for protection by a patent in the United States if it involves some practical application and "it produces a useful, concrete and tangible result."citation needed However, with In re Bilski the " 'useful, concrete and tangible result inquiry' is inadequate. The portions of the judgment relying on this inquiry no longer have effect US patent law.citation needed

It's full case name is State Street Bank & Trust Company v. Signature Financial Group, Inc., but is often referred to as the State Street decision or State Street Bank decision.

Overview

On March 9, 1993, Signature Financial Group, Inc. was granted U.S. Patent 5,193,056  entitled "Data Processing System for Hub and Spoke Financial Services Configuration". The "spokes" were mutual funds that pool their assets in a central "hub". It has been pointed out that the patent claims as means for performing steps that are the requirements specified in an Internal Revenue Service regulation for avoiding taxes on a partnership. 1 That the invention described and claimed in the patent constituted protectable subject matter was affirmed by the Federal Circuit in July 1998. The court held that:

(...) the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces 'a useful, concrete and tangible result' -- a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades.

This is considered by many to be significant because previously "methods of doing business" had been widely speculated to be an excluded class of patentable subject matter, although some point out that the issue was never directly addressed by the courts until the State Street decision.

The Federal Circuit in this opinion observed that:

The business method exception has never been invoked by this court, or the CCPA, to deem an invention unpatentable. Application of this particular exception has always been preceded by a ruling based on some clearer concept of Title 35 or, more commonly, application of the abstract idea exception based on finding a mathematical algorithm. Illustrative is the CCPA's analysis in In re Howard, 394 F.2d 869, 157 USPQ 615 (CCPA 1968), wherein the court affirmed the Board of Appeals' rejection of the claims for lack of novelty and found it unnecessary to reach the Board's section 101 ground that a method of doing business is "inherently unpatentable."

Id. at 872, 157 USPQ at 617

The Federal Circuit found it unnecessary to carve out a new exception to the principle that "anything under the sun made by man is patentable" (a phrase from the U.S. Supreme Court ruling in the Chakrabarty decision based on a 1952 report from the Congress). Accordingly, that principle is equally applicable to any business method that produces a useful, concrete and tangible result.

According to many, this ruling has been a major impetus behind the recent boom in software and business method patents.citation needed Others argue that the boom started much earlier, i.e., in the early 1990s.citation needed Regardless, some commentatorswho?see the boom as harmful and others as beneficial. It appears the CAFC believes that the decision should not have created a boom in software and business method patents. They noted in In re Bilski that the claims of patent in State Street were for a machine and not a process.

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