Statutory Subject Matter

BPAI "Bilskis" Apparatus and Beauregard claims (01/27/10)

Claim 14. A system for identifying one or more mean items for a plurality of items, J, each of the items having at least one symbolic attribute having a symbolic value, the system comprising:

a memory for storing computer readable code; and

a processor operatively coupled to the memory, the

processor configured to: compute a variance of the symbolic values of the plurality of items relative to each of the items; and select the at least one mean item having a symbolic value that minimizes the variance.


Claim 19. An article of manufacture for identifying one or more mean items for a plurality of items, J, each of the items having at least one symbolic attribute having a symbolic value, comprising: a computer readable medium having computer readable program] code embodied thereon, the computer readable program code comprising:

a step to compute a variance of the symbolic values of the plurality of items relative to the symbolic value of each of the items; and

a step to select at least one item that has the symbolic value that minimizes the variance.

In In re Gutta, the BPAI sua sponte rejected claims 14, directed to a system, and claim 19, directed to “an article of manufacture . . . comprising a computer readable medium” under 35 U.S.C. § 101. The BPAI cites Comiskey 1) and Benson 2) for the principle that the scope of §101 is not unlimited. The BPAI then cites Alappat to support the notion that mathematical algorithms are not patentable, and that this exception applies to true apparatus claims 3). In re Johnson 4) is cited for stating, ”Benson . . . applies equally whether an invention is claimed as an apparatus or a process, because the form of the claim is often an exercise in drafting.” The BPAI concludes:

If a claimed machine . . . involves a mathematical algorithm, . . . then we must determine whether the scope of the claimed invention encompasses one of the judicially-created exceptions. This determination of claim scoep requires that we make two inquiries:

(1) Is the claim limited to a tangible practical application, in which the mathematical algorithm is applied, that results in a real-world use (e.g., “not a mere field-of-use label having no significantce”)?

(2) Is the claim limited so as to not encompass substantially all practical applications of the mathematical algorithm either “in all fields” of use of the algorithm or even “only one field?”

In footnote 11, the BPAI notes:

Notwithstanding the court's statement in Nuijten, 500 F.3d at 1356 n.7 (“We have never held that a manufacture is ever required to produce any result.”), if an applicant chooses to claim the manufacture in terms of applying a mathematical algorithm (e.g., Appellants' claim 19), then this two-part inquiry applies to determine if the claim is directed to eligible subject matter under § 101.

The BPAI follows the same logic in rejecting Beauregard style claim 19.

Bilski files for certiorari (01/28/09)

on 01/27/09, Bilski filed for writ of certiorari with the following two questions being presented:

Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”

Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. § 273.

Fed. Cir. Revises Comiskey (01/27/09)

In 2007, the Fed. Cir. issued its ruling that mental processes are not patentable. Now, the Fed. Cir., acting en banc, ordered that the original opinion be vacated and a new opinion be issued. The Order affirms the correctness of the original ruling in that “appellate tribunal [is allowed] to affirm an agency on alternative legal grounds or to remand to the agency to consider an alternative ground.” In this case, the BPAI rejected claims on obviousness grounds only, and the BPAI, rather than addressing the obviousness rejection, held that the method claims were non-statutory. Judge Moore, writing for the dissent and joined by Newman and Rader, states,

“In this case, the court declined to address the only ground for rejecting the patent claims decided below and appealed by the parties (§ 103). Instead, the court reached out to decide a new ground of rejection (§ 101), raised sua sponte by the court. The court evaluated both the process and machine claims under its chosen ground, § 101, concluding that the process claims were not directed to patentable subject matter, but that the machine claims, in light of our well-established precedent were directed to patentable subject matter. This resulted in affirming the rejection of the process claims albeit on a different ground and remanding the rejection of the machine claims without ever addressing the obviousness rejection by the PTO. Today, the en banc court vacates the original Comiskey opinion and permits the panel to revise it. The only change the panel makes is to remand the uncontroversial determination that

the machine claims are in fact directed to patentable subject matter. Why remand the machine claims and not the process claims? More importantly, why remand when the PTO already rejected the system claims as obvious. Given that the court has pointed to no flaw in the agency’s obviousness rejection, the court’s decision in Comiskey amounts to a wasteful remand.”

”[The] panel has repudiated controlling precedent of the court and indeed 180 years of practice since the Patent Act of 1839 that had established a strict proscription against a judicial reviewing body of Patent Office decisions playing de novo “examiner”. Instead, the reviewing court has had a limited statutory role that focused upon the rejection that had been made by the Office.

One hundred eighty years ago the Patent Act of 1839 established the ground rules for judicial review of Patent Office denials of patentability. A strict standard was established that the reviewing court should only review the decision below and never on a de novo basis impose a new ground to deny patentability.

In re Bilski decided (11/04/08)

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 5).)
  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 6) and also citing Mackay Radio 7) 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 8), Diehr 9), Flook 10), and Cochrane v. Deener 11).)
  • ”[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 12).)
  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 13), In re Walter 14), and In re Abele 15).)
  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 16), In re Alappat 17), and AT&T Corp. v. Excel Commc'ns, Inc. 18).)
  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 19), In re Meyer 20), In re Schrader 21), and Parker v. Flook 22).)

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. 23). 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, 24) 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 25) 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 26) and Flook 27) 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 28) 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) 554 F.3d at 977
2) 409 U.S. at 67
3) 33 F.3d at 1542
4) 589 F.2d 1070
5) , 6) Diamond v. Diehr, 450 U.S. 175, 185 (1981)
7) Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86, 94 (1939)
8) Gottschalk v. Benson, 409 U.S. 63, 70 (1972)
9) Diamond v. Diehr, 450 U.S. 175, 192 (1981)
10) Parker v. Flook, 437 U.S. 584, 589 (1978)
11) 94 U.S. 780, 788 (1876)
12) Diamond v. Diehr, 450 U.S. 175, 191-92 (1981)
13) 573 F.2d 1237 (CCPA 1978)
14) 618 F.2d 758 (CCPA 1980)
15) 684 F.2d 902 (CCPA 1982)
16) 149 F.3d 1368, 1373 (Fed. Cir. 1998)
17) 33 F.3d 1526, 1544 (Fed. Cir. 1994)
18) 172 F.3d 1352, 1357 (Fed. Cir. 1998)
19) 888 F.2d 835, 840 (Fed. Cir. 1989)
20) 688 F.2d 789, 794 (CCPA 1982)
21) 22 F.3d 290, 291 (Fed. Cir. 1994)
22) 437 U.S. 584 (1978)
23) 56 U.S. 62 (1853)
24) 499 F.3d 1365, 84 USPQ2d 1670, 2007 U.S. App. LEXIS 22414
25) 318 U.S. 80 (1943)
26) Gottschalk v. Benson, 409 U.S. 63, 64 (1972)
27) Parker v. Flook, 437 U.S. 584 (1978)
28) 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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