State Street decision

The decision of July 23, 1998 of the United States Court of Appeals for the Federal Circuit in State Street Bank & Trust Company v. Signature Financial Group, Inc., often called simply State Street decision or State Street Bank decision, was an important court decision concerning United States patent law and more particularly the patentability of business methods . Basically, since this decision, the protection of an invention by patent in the United States is possible as soon as it involves some pratical application and "it produces a useful, concrete and tangible result."

Overview

On March 9, 1993, Signature Financial Group, Inc. was granted US 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. This affirmed by Court of Appeals in July 1998.

The court hold 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 andin subsequent trades."

This is significant because previously "mathematical algorithms" and "methods of doing business" have not been considered patentable. It now seems that "everything under the sun" is patentable in the US. This has led to a boom in software patents.

See also

• Business method patent
• Freeman-Walter-Abele Test

External links

• "State Street" Decision Causes "Boom" in Software Patent Filings A good, concise summary.
• Commentary on Cornell University web site