A new patent ruling is likely to have a big impact on business method and software patents.

The U.S court of appeals upheld a decision of the U.S patent office that denied a patent from an applicant named Bernard L Bilsky, an owner of a small company called Weatherwise. The patent application comprises a mathematical model that enables managing bad weather risks in the commodity market.

The Bilsky patent was not tied to any form of technology and had some serious obviousness problems thus rendering it to be a perfect test case for those interested in eliminating the possibility of business method and software patents.  

The court ruled that the Bilsky patent has no machine or transformation of a substance involved. In effect, their patent application didn't involve what the court called "the machine or transformation test." The test determines that a patent must include a machine or a substance that is somehow transformed.

This court ruling can endanger many business method patents that were already granted and raise the bar for future similar applications.

The court decision also endangers pure software patents because they can be considered abstract ideas that are loosely coupled to a physical device (the computer).