US Supreme Court skeptical of patents for hedging

* High court considers allowing patents on hedging methods

* Expert says patent will not be granted

By Diane Bartz

WASHINGTON, Nov 9 (Reuters) - U.S. Supreme Court Justices seemed reluctant to allow hedging methods to be patented as it heard arguments on Monday that were closely watched by software, biotech firms and other industries.

Some software and biotechnology companies want the definition of what can be patented to be as broad as possible because they license those processes. Others, like some financial institutions, want restrictions on business method patents to avoid getting sued.

One of the best-known examples of a business method patent is Amazon.com Inc's (AMZN.O) one-click process to buy goods on the Internet.

When Michael Jakes, arguing for the company WeatherWise, acknowledged that abstract ideas could not be patented, Chief Justice John Roberts pointed to a portion of the patent application, which is for a hedging method to allow users to make fixed energy payments even if usage and energy prices vary.

"How is that not an abstract idea?" he asked. "You initiate a series of transactions between commodity providers and commodity consumers. You set a fixed price at the consumer end, you set a fixed price at the other end, and that's it."

And the justices seemed dissatisfied with a distinction drawn by the U.S. Court of Appeals for the Federal Circuit that allowed business methods to be patented if they involve a machine or transformation.