Table of Contents

Statutory Subject Matter

In re Bilski decided (11/04/08)

See the Comprehensive Bilski Page

The Fed. Cir. finally handed down its decision in In re Bilski. See the Bilski Page for background information on the case. Stated the court: “The true issue before us then is whether Applicants are seeking to claim a fundamental principle (such as an abstract idea) or a mental process. And the underlying legal question thus presented is what test or set of criteria governs the determination by the Patent and Trademark Office (“PTO”) or courts as to whether a claim to a process is patentable under § 101 or, conversely, is drawn to unpatentable subject matter because it claims only a fundamental principle.”

The Fed. Cir. ruled that, ”[b]ecause the applicable test to determine whether a claim is drawn to a patent-eligible process under § 101 is the machine-or-transformation test set forth by the Supreme Court and clarified herein, and Applicants' claim here plainly fails that test, the decision of the Board is AFFIRMED.”

Bilski's impact in various fields:

Key holdings include:

  1. ”[A] claim is not patent-eligible 'process' if it claims 'laws of nature, natural phenomena, [or] abstract ideas.'” (Quoting the S.Ct. in Diehr 1).)
  2. ”[W]hile a claim drawn to a fundamental principle is unpatentable, 'an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.'” (Quoting Diehr 2) and also citing Mackay Radio 3) with approval.)
  3. “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” (Citing Benson 4), Diehr 5), Flook 6), and Cochrane v. Deener 7).)
  • ”[T]he Court explicitly stated in Benson that '[t]ransformation and reduction of an article “to a different state or thing” is the clue to the patentability of a process claim that does not include particular machines'” (emphasis in original). The Fed. Cir. noted in footnote 11, that “We do not consider the word 'clue' to indicate that the machine-or-implementation test is optional or merely advisory. Rather, the Court described it as the clue, not merely 'a' clue.”
  1. ”[M]ere field-of-use limitations are generally insufficient to render an otherwise ineligible process claim patent-eligible.” (Citing Diehr 8).)
  2. ”[T]he Freeman-Walter-Abele test” comprising (1) determining whether the claim recites an “algorithm” within the meaning of Benson, then (2) determining whether that algorithm is “applied in any manner to physical elements or process steps, “is inadequate.” (Citing In re Freeman 9), In re Walter 10), and In re Abele 11).)
  3. ”[T]he 'useful, concrete and tangible result' inquiry is inadequate and reaffirm that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply. (Citing with disapproval State St. Bank & Trust Co. v. Signature Fin. Group 12), In re Alappat 13), and AT&T Corp. v. Excel Commc'ns, Inc. 14).)
  4. There is no technical arts test or mental process test. In re Comiskey does not implicitly apply a new test barring any claim reciting a mental process that lacks significant “mental steps.”
  5. Data gathering or insignificant extra-solution activity does not make an algorithm patentable. (Citing In re Grams 15), In re Meyer 16), In re Schrader 17), and Parker v. Flook 18).)

Precedents cited with approval:

  • Diamond v. Diehr, 450 U.S. 175 (1981) (Diamond_v._Diehr)
  • Parker v. Flook, 437 U.S. 584 (1978) (Parker_v._Flook)
  • Gottschalk v. Benson, 409 U.S. 63 (1972) (Gottschalk_v._Benson)
  • Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86 (1939)
  • Cochrane v. Deener 94 U.S. 780 (1876)

Precedents cited with disapproval:

  • In re Freeman, 573 F.2d 1237 (CCPA 1978)
  • In re Walter, 618 F.2d 758 (CCPA 1980)
  • In re Abele, 684 F.2d 902 (CCPA 1982)
  • State St. Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368 (Fed. Cir. 1998)
  • In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994)
  • AT&T Corp. v. Excel Commc'ns, Inc., 172 F.3d 1352 (Fed. Cir. 1998)

Precedents clarified

  • In re Comiskey, 499 F.3d 13651 (Fed. Cir. 2007)

Fed. Cir. orders en banc rehearing of Bilski (02/22/08)

The Fed. Cir. ordered sua sponte rehearing of In re Bilksi, decided on March 8, 2006 by the BPAI. Bilksi addressed statutory subject matter questions surrounding a patent claiming ”[A] method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price”. On October 1, 2007, the case was argued before a panel of the Fed. Cir., but rather than issuing an opinion, the court decided to rehear the case en banc, addressing the following five questions:

  1. Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under 35 U.S.C. § 101?
  2. What standard should govern in determining whether a process is patent-eligible subject matter under section 101?
  3. Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that 2007-1130 - 2 - contains both mental and physical steps create patent-eligible subject matter?
  4. Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101?
  5. Whether it is appropriate to reconsider State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?

Signal not patentable (09/30/07)

In In re Petrus Nuijten, the Fed. Cir. affirmed the USPTO rejection of claims directed to a signal, citing O'reilly, et al. v. Morse, et al. 19). More on the Nuijten page.

Mental processes not patentable (09/28/07)

Claim 1: A method for mandatory arbitration resolution regarding one or more unilateral documents comprising the steps of:

enabling a person to enroll or register himself or herself and his or her one or more unilateral documents in a mandatory arbitration system;

providing arbitration language for insertion in the unilateral document wherein the arbitration language provides that any challenge to the unilateral document is to be presented to the mandatory arbitration system for binding arbitration;

enabling a complaintant to submit a request for arbitration resolution;

conducting arbitration resolution;

providing support to the arbitration; and

determining an award or a decision that is final and binding.

In In re Stephen W. Comiskey, 20) claims 1-59 of patent application 09/461,742 were rejected as obvious under § 103 by the Examiner. The BPAI, primarily basing its decision on representative claim 32, affirmed the Examiner's rejection. Rather than address the obviousness issue, the Fed. Cir., found that independent claims 1 and 32 and most of their dependent claims lacked statutory subject matter under § 101. The Fed. Cir. relied on SEC v. Chenery 21) to for the proposition that “a reviewing court can (and should) affirm an agency decision on a legal ground not relied on by the agency if there is no issue of fact, policy, or agency expertise” and so felt justified in initially raising the question statutory subject matter under § 101. With regard to claims 1 and 32, the Fed. Cir. concluded, “Thus, like the claims that the Supreme Court found unpatentable in Benson 22) and Flook 23) and the claims found unpatentable in our own cases, Comiskey’s independent claims 1 and 32 seek to patent the use of human intelligence in and of itself. Like the efforts to patent “a novel way of conducting auctions” which Schrader 24) found to be directed to an abstract idea itself rather than a statutory category, Comiskey’s independent claims 1 and 32 describe an allegedly novel way of requiring and conducting arbitration and are unpatentable.”

~NEW~ (01/27/09): Request for En Banc review denied. Hal Wegner's take: The January 13, 2009, denial of en banc reconsideration of this procedural departure from a 180 year old statutory scheme represents a bold and unprecedented expansion of appellate jurisdiction, i.e., the three-judge panel “rejection” claims as lacking patent-eligibility under 35 USC § 101 where the issue was never raised below.

Yo Ho Ho and a Bottle Of Rum! BPAI finds problems with "Interim Guidelines" (02/19/07)

The BPAI, in Ex Parte Bilski, found that the Interim Guidelines (now incorporated into MPEP 2100) have several problems:

  1. Interim Guidelines are not consistent with case law which states that a series of steps is not necessarily a process under §101.
  2. Interim Guidelines do not provide adequate direction for Examiners on determining whether an invention is an abstract idea, a law of nature, or natural phenomenon.
  3. Interim Guidelines perpetuate the misunderstanding that “transformation” requires transformation of a tangible object or article, contrary to cases that explain that the subject matter can be physical, yet intangible, phenomena such as electrical signals.
  4. Interim Guidelines fail to qualify the general State Street test for patentable subject matter (the “useful, concrete, and tangible result” test) as having exceptions.
  5. Interim Guidelines' definitions of “useful,” “concrete,” and “tangible,” fail to cite any support in cases dealing with patentable subject matter, and are circular and therefore unhelpful.
  6. Interim Guidelines fail to provide any guidance as to how examiners should determine whether the claimed invention preempts an abstract idea, law of nature, or natural phenomenon.

Fortunately, the Interim Guidelines are less binding than the Pirate's Code (see footnote 8 on page 35). Because the claimed method is not tied to a computer or other machine and the only thing transformed are non-physical financial risks, the Board affirmed the Examiner's rejection.

Oral Arguments heard in In re Nuijten (02/06/07)

The PTO rejected a patent application claiming a signal on statutory grounds (35 U.S.C. § 101). Oral Arguments (links below) were heard yesterday.

Watermark signal case to be litigated before Fed Cir (08/11/06)

After being rejected by the Board of Appeals for lack of statutory subject matter under 35 U.S.C. §101, In re Nuijten, No. 06-1301, will be litigated before the Federal Circuit, with arguments to be heard in early 2007. This is a test case for determining whether an embedded signal is patentable.

1) , 2) Diamond v. Diehr, 450 U.S. 175, 185 (1981)
3) Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86, 94 (1939)
4) Gottschalk v. Benson, 409 U.S. 63, 70 (1972)
5) Diamond v. Diehr, 450 U.S. 175, 192 (1981)
6) Parker v. Flook, 437 U.S. 584, 589 (1978)
7) 94 U.S. 780, 788 (1876)
8) Diamond v. Diehr, 450 U.S. 175, 191-92 (1981)
9) 573 F.2d 1237 (CCPA 1978)
10) 618 F.2d 758 (CCPA 1980)
11) 684 F.2d 902 (CCPA 1982)
12) 149 F.3d 1368, 1373 (Fed. Cir. 1998)
13) 33 F.3d 1526, 1544 (Fed. Cir. 1994)
14) 172 F.3d 1352, 1357 (Fed. Cir. 1998)
15) 888 F.2d 835, 840 (Fed. Cir. 1989)
16) 688 F.2d 789, 794 (CCPA 1982)
17) 22 F.3d 290, 291 (Fed. Cir. 1994)
18) 437 U.S. 584 (1978)
19) 56 U.S. 62 (1853)
20) 499 F.3d 1365, 84 USPQ2d 1670, 2007 U.S. App. LEXIS 22414
21) 318 U.S. 80 (1943)
22) Gottschalk v. Benson, 409 U.S. 63, 64 (1972)
23) Parker v. Flook, 437 U.S. 584 (1978)
24) In re Schrader, 22 F.3d 290, 295 (Fed. Cir. 1994) (holding when a claim does not invoke a machine, “§ 101 requires some kind of transformation or reduction of subject matter”)

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