Title: WHAT IS PATENT ELIGIBLE
1WHAT IS PATENT ELIGIBLE?
- In re Bilski and its Impacts on the Patent
Landscape
2In re Bilski
- Part 1. Background
- Part 2. The Bilski Decision
- Part 3. Impact on Business Methods and Software
Patents - Part 4. Impact on Diagnostic Methods
- Part 5. Strategies
3In re Bilski
4A Little History
- Patent Act of 1793
- a patent may be granted to any person or persons
who shall allege that he or they have invented
any new and useful art, machine, manufacture or
composition or matter, or any new and useful
improvement on any art, machine, manufacture or
composition of matter. . . . (1 Stat. 318, 319
1 (1793)). - Criteria remained essentially unchanged until
1952, when Congress amended 101 as follows
51952 Patent Act Process
- 35 U.S.C. 101
- Whoever invents or discovers any new and useful
process, machine, manufacture, or composition of
matter, or any new and useful improvement
thereof, may obtain a patent therefor, subject to
the conditions and requirements of this title. - 35 U.S.C. 100(b)
- The term process means process, art, or method,
and includes a new use of a known process,
machine, manufacture, composition of matter, or
material.
6 Enter the ComputerGottschalk v. Benson, 409
U.S. 63 (1972)
- Patent claims a method for converting
binary-coded decimal (BCD) numerals into pure
binary numerals. - Claims were not limited to any particular art or
technology, to any particular apparatus or
machinery, or to any particular end use. - Claims purported to cover any use of the claimed
method in a general purpose digital computer of
any type.
7Pre-195Benson (cont.)
- It is conceded that one may not patent an idea.
But, in practical - effect, that would be the result if the formula
for converting BCD - numerals to pure binary numerals were patented in
this case. The - mathematical formula involved here has no
substantial practical - application except in connection with a digital
computer, which - means that, if the judgment below is affirmed,
the patent would - wholly preempt the mathematical formula and, in
practical effect, - would be a patent of the algorithm itself.
- Gottschalk v. Benson, 409 U.S. 63, 71-72
(1972)
8Benson (cont.)
- It is argued that a process patent must either
be tied to a particular machine or apparatus or
must operate to change articles or materials to a
"different state or thing." We do not hold that
no process patent could ever qualify if it did
not meet the requirements of our prior
precedents. . . . It is said we freeze process
patents to old technologies, leaving no room for
the revelations of the new, onrushing technology.
Such is not our purpose. . . . - Gottschalk v. Benson, 409 U.S. 63, 71 (1972)
9Pre-195Diamond v. Diehr, 450 U.S. 175,
(1981)
- A method of operating a rubber-molding press for
precision molded compounds with the aid of a
digital computer, comprising . . .
repetitively comparing in the computer, at
frequent intervals during each cure, the
Arrhenius equation for reaction time during the
cure, which is ln v CZ x, repetitively
comparing in the computer at frequent intervals
during the cure each said calculation of the
total required cure time calculated with the
Arrhenius equation and said elapsed time, and - opening the press automatically when a said
comparison indicates completion of curing.
10Pre-195Diehr (cont.)
- Claim is patentable
- Arrhenius equation is not patentable in
isolation, but when a process for curing rubber
is devised which incorporates in it a more
efficient solution of the equation, that process
is at the very least not barred at the threshold
by 101. - Diamond v. Diehr, 450 U.S. 175, 188 (1981)
11Pre-195State Street
- State Street Bank v. Signature Financial Group,
Inc., 149 F.3d 1368 (1998) - Provides a system (Hub and Spoke) which
facilitates a structure whereby mutual funds
(spokes) pool their assets in an investment
portfolio (Hub) organized as a partnership
12Useful, Concrete, and Tangible
-
- Today, we 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 and in subsequent trades. - State Street, 149 F.3d 1368, 1373 (1998)
13Pre-195State Street to Bilski
- According to Justice Newmans dissent in Bilski,
almost 40,000 Business Method patent applications
filed since State Street decision. - As noted in Justice Mayers dissent in Bilski,
issued patents include -
14Pre-195State Street to Bilski
- U.S. Patent 6,119,099 (method of enticing
customers to order additional food at a fast food
restaurant) - U.S. Patent No. 6,329,919 (system for toilet
reservations) - U.S. Patent No. 7,261,652 (method of putting a
golf ball) - U.S. Patent No. 6,368,227 (method of swinging on
a swing) - U.S. Patent No. 5,443,036 (method of inducing
cats to exercise) - U.S. Patent No. 6,049,811 (method of obtaining a
patent)
15In re Bilski
- Part 2, The CAFC Decision
16In re Bilski
- Claim 1 A method for managing the consumption
risk costs of a commodity sold by a commodity
provider at a fixed price comprising the steps
of (a) initiating a series of transactions
between said commodity provider and consumers of
said commodity wherein said consumers purchase
said commodity at a fixed rate based upon
historical averages, said fixed rate
corresponding to a risk position of said
consumer (b) identifying market participants
for said commodity having a counter-risk position
to said consumers (c) initiating a series of
transactions between said commodity provider and
said market participants at a second fixed rate
such that said series of market participant
transactions balances the risk position of said
series of consumer transactions.
17Examiners Rejections
- The Examiner rejected claims 1-11 under 35
U.S.C. 101 - The Examiners rational
- regarding claims 1-11, the invention is not
implemented on a specific apparatus and merely
manipulates an abstract idea and solves a purely
mathematical problem without any limitation to a
practical application, therefore, the invention
is not directed to technological arts.
18Boards Decision
- The Board held the Examiner erred to the extent
that he relied on a technological arts test
because the case law did not support such a test - The Board also held that the requirement of a
specific apparatus was also erroneous as a claim
that does not recite a specific apparatus may
still be patent-eligible if it transforms
physical subject matter from one state to another
(e.g., mixing two elements or compounds to
produce a chemical substance or mixture is
clearly a statutory transformation )
19Boards Decision (cont.)
- The Board, however, concluded that Applicants
claims did not involve any patent-eligible
transformation as they were merely directed to
non-physical financial risks and legal
liabilities of the commodity provider, the
consumer, and the market participants. - The Board also held that Applicants claims
preempt any and every possible way of
performing the steps of the claimed process, by
human or by any kind of machine or by any
combination thereof, and hence an abstract idea
ineligible for patenting
20Boards Decision (Cont.)
- The Board also held that the claimed process
did not produce useful, concrete, tangible
result, and for this reason also was not
directed to patent-eligible subject matter.
21CAFC
- The Supreme Court has held that the meaning of
process as used in Section 101 in narrower that
its ordinary meaning. - The Supreme Court has held that a claim is not a
patent-eligible process if it claims laws of
nature, natural phenomena, or abstract ideas. - The true issue before us is then whether
Applicants are seeking to claim a fundamental
principle (such as an abstract idea) or mental
process
22CAFC (cont.)
- Diehr can be understood to suggest that whether
a claim is drawn only to a fundamental principle
is essentially an inquiry into scope of that
exclusion i.e., whether the effect of allowing
the claim would be to allow the patentee to
pre-empt substantially all uses of that
fundamental principle.
23CAFC (cont.)
- How does one determine whether a claimed
process would pre-empt all uses of a fundamental
process? - Machine-or-Transformation test
- (1) is the claimed process tied to a particular
machine or apparatus? - (2) does it transform a particular article into
a different state or thing?
24CAFC (cont.)
- We hold that the Applicants process as claimed
does not transform any article to a different
state or thing. - Purported transformations or manipulations
simply of public or private legal obligations or
relationships, business risks, or other such
abstractions cannot meet the test because they
are not physical objects or substances, and they
are not representative of physical objects or
substances.
25CAFC (cont.)
- The claim is not limited to transactions
involving actual commodities, and the
application discloses that the recited
transaction may simply involve options, i.e.,
rights to purchase or sell the commodity at a
particular price within a particular timeframe
26CAFC (cont.)
- it is inappropriate to determine the
patent-eligibility of claim as a whole based on
whether selected limitations constitute
patent-eligible subject matter. - the use of a specific machine or
transformation of an article must impose
meaningful limits on the claims scope to impart
patent-eligibility - the involvement of the machine or
transformation in the claimed process must not
merely be insignificant extra-solution activity. - We leave to the future cases the elaboration of
the precise contours of machine implementation,
as well as the answers to particular questions,
such as whether or when recitation of a computer
suffices to tie a process claim to a particular
machine.
27CAFC (cont.)
- In Benson, the claimed process, though tied to a
machine, was found not to be patent eligible - In Benson, the limitations tying the process
to a computer were not actually limiting because
the fundamental principle at issue, a particular
algorithm, had no utility other than operating on
a digital computer.
28CAFC (cont.)
- It is virtually self-evident that a process for
a chemical or physical transformation of physical
objects or substances is patent-eligible subject
matter. - The raw materials of many information-age
processes, however, are electronic signals and
electronically-manipulated data.
29CAFC (cont.)
- A broad independent claim reciting a process of
graphically displaying variances of data from
average values was held patent ineligible. In re
Abele, 684 F.2d 902 (CCPA 1982) - The claim did not specify any particular type
or nature of data, and nor did it specify
how or from where the data was obtained or what
the data represented. -
30CAFC (cont.)
- One of Abeles dependent claim reciting said
data is X-ray attenuation data produced in a two
dimensional field by a computed tomography
scanner was deemed patent eligible - This data clearly represented physical and
tangible objects - transformation of that raw data into a
particular visual depiction of a physical object
on a display was sufficient for patent
eligibilty
31CAFC (cont.)
- Certain active steps, such as gathering data
and/or recording output data, may be construed as
insignificant extra-solution activity and hence
insufficient to render an otherwise
patent-eligible claim into a patent-eligible one - This court and our predecessor court have
frequently stated that adding a data-gathering
step to an algorithm is insufficient to convert
that algorithm into a patent-eligible process. - A requirement simply that data inputs be
gathered without specifying how is a
meaningless limit on a claim to an algorithm
because every algorithm inherently requires the
gathering of data inputs.
32CAFC (cont.)
- Method of conducting an auction of multiple items
in which the winning bids were selected in a
manner that maximized the total price of all
items. In re Schrader, 22 F.3d 290 (Fed. Cir.
1994) - Claims were patent-ineligible as being merely
directed to a mathematical optimization
algorithm. - No specific machine or apparatus was recited.
- The claimed method did require a step of
recording bids on each item, though no particular
manner of recording was specified. - The step of recording the bids constituted
extra-solution activity.
33CAFC (cont.)
- Nevertheless, we agree that future developments
in technology and the sciences may present
difficult challenges to the machine-or-transformat
ion test - Thus, we recognize that the Supreme Court may
ultimately decide to alter or perhaps even set
aside this test to accommodate emerging
technologies. - And we certainly do not rule out the
possibility that this court may in the future
refine or augment the test or how it is applied.
34In re Bilski
- Part 3, Impact on Business Methods and Software
Patents
35Future of Business Methods
- End of Business Method patents?
- Transformation of Legal Relationships and
Business Obligations - Abstract Not Tangible
-
- Is there a Machine?
36Cybersource Corporation v. Retail Decisions, 2009
U.S. Dist. LEXIS 26056
- 3. A method for verifying the validity of a
credit card transaction over the Internet
comprising the steps of a) obtaining other
transactions utilizing an Internet address that
is identified with the credit card transaction
b) constructing a map of credit card numbers
based upon the other transactions and c)
utilizing the map of credit card numbers to
determine if the credit card transaction is
valid. -
37Cybersource Corporation (cont.)
- No Transformation court finds that
manipulation of data is not transformation - Transformation suggests a fundamental change,
whereas manipulation does not. . . . Simply
collecting data into a vague sort of map does
not amount to a transformation. - Even if manipulation could be considered
transformation, there is no transformation of an
article i.e., any physical object or substance,
or any electronic signal representative of any
physical object or substance. - No machine internet is not a particular machine
38Cybersource Corporation (cont.)
- As for the future of Business Method patents
- In analyzing Bilski, one is led to ponder
whether the end has arrived for business method
patents, whose numbers swelled following the
decision in State Street. . . . Although the
majority declined say so explicitly, Bilskis
holding suggests a perilous future for most
business method patents. - . . . The closing bell may be ringing for
business method patents, and their patentees may
find they have become bagholders.
39In re Ferguson (Fed. Cir.) March 6, 2009
- A method of marketing a product, comprising
- developing a shared marketing force, said shared
marketing force including at least marketing
channels, which enable marketing a number of
related products - using said shared marketing force to market a
plurality of different products that are made by
a plurality of different autonomous producing
company, so that different autonomous companies,
having different ownerships, respectively produce
said related products - obtaining a share of total profits from each of
said plurality of different autonomous producing
companies in return for said using and - obtaining an exclusive right to market each of
said plurality of products in return for said
using.
40Software Patents
- Is a Computer a Machine?
- If so, how detailed do you need to be?
- Is there a Transformation of an Tangible
Article? -
41Every Penny Counts v. BOA (May 2009)
- A system, comprising a network entry means
coupled to said network for entering into the
network an amount being paid in a transaction by
a payor . . . said computing means in said
network being responsive to said data and said
identification entering means for determining an
excess payment to the basis of the determinant
established by the payor, and said computing
means in said network being responsive to the
excess payment for apportioning at least a part
of the excess payment among said accounts on the
basis of the excess determined and established by
the payor and on the basis of commands
established by the payor and controlled by other
than the payee. -
42Ex parte Nawathe, February 9, 2009
- Ex parte Nawathe (February 9, 2009)
- Representative claim
- A computerized method comprisinginputting
multiple extensible Markup Language (XML)
documentscreating a data representation of said
multiple XML documents andreducing redundancy
across said multiple XML documents via a fixed
set of tables. - Rejection Affirmed
-
43Ex parte Nawathe (cont.)
- No machine just a general purpose computer
- No transformation because documents are not
articles
44Ex parte Halligan, April 8, 2009
- A programmed computer method based upon the six
factors of a trade secret from the First
Restatement of Torts for providing documentation,
analysis, auditing, accounting, protection, and
other management relating to an existence, . . .
of a plurality of trade secrets of an
organization, said method implemented by the
programmed computer to effect the following
steps
45Ex parte Halligan, (cont)
- Fails both prongs
- Merely a general purpose computer
- No transformation because numerical value
assigned by computer is abstract not a
tangible article
46In re Shahabi, April 20, 2009
- 1. A method, comprising
- processing at least one query using a wavelet
transformation to produce a transformed query
and - performing a range-sum query on a database
using the transformed query to produce a result. - No machine
- No transformation
47In re Richter, May 29, 2009
- 21. In a host multiprocessor system for
emulating the operation of a target n-processor
system (ngt1) by execution of one of more threads
representing the operation of the target system,
a method for emulating the target systems memory
addressing using a virtual-to-real memory mapping
mechanism of the host multiprocessor systems
operating system, said method comprising - (a) reading a target system virtual memory
address (ATV) - (b) mapping said ATV to a target real address
(ATR) - (c) mapping said ATR to a host virtual memory
address (AHV) and - (d) mapping said AHV to a host real memory
address, wherein the emulation of the target
systems memory addressing is treated as an
application running on the host multiprocessor
system.
48In re Richter, (cont.)
- Claim 21 recites a method performed in a host
multiprocessor system that emulates a target
n-processor system therefore the process claim
includes use of a specific machine. - . . . We further find use of the specific
machine imposes meaningful limits on the scope of
the claims the host processor emulates a target
systems memory addressing causing it to behave
like the target processor.
49In re Bilski
- Part 4, Implications for Diagnostic Methods
50Diagnostic Methods
- The application of machine-or-transformation
test to diagnostic methods can curtail the scope
of available patent protection - Diagnostic methods typically involve diagnosing
disease conditions and/or optimizing therapeutic
treatments based on comparative inferences and/or
correlations between various biochemical
compounds and/or markers - Under a narrow interpretation of the test the
identification of such inferences and
correlations can be deemed as discovery of
natural phenomena without transforming an article
from one state to another
51Classen Immunotherapies, Inc. v. Biogen Idec.
- Classen patents were directed to a process of
identifying lower risk vaccines (U.S. Patent Nos.
5,723,283 5,728,385 6,638,739 6,420,139) - A method of determining whether an immunization
schedule affects the incidence or severity of a
chronic immune-mediated disorder in a treatment
group of mammals, relative to a control group of
mammals, which comprises immunizing mammals in
the treatment group of mammals with one or more
doses of one or more immunogens, according to
said immunization schedule, and comparing the
incidence, prevalence, frequency or severity of
said chronic immune-mediated disorder or the
level of a marker of such a disorder, in the
treatment group, with that in the control group.
(claim 1 of 283 patent)
52Classen Immunotherapies, Inc. v. Biogen Idec,
Supp. 2d 452, 2005 U.S. Dist. LEXIS 17075 (D. Md
2005)
- Although articulated as a process, the 283
patent does not claim a specific technique or
technical process of testing vaccine safety.
Instead, the 283 patent describes only a general
inquiry of whether the proposed correlation
exists. - Clearly, the correlation between vaccination
schedules and the incidence of immune mediated
disorders that Dr. Classen claims to have
discovered is a natural phenomenon.
53Classen
- As such, the process is indistiguishable from
the idea itself. Accordingly, the 283 patent
seeks to patent an unpatentable natural
phenomenon. - The 139 and 739 patents were also deemed as
patent-ineligible even though they included the
active step of immunizing patients in accordance
with a schedule determined to be low risk
54Classen Immunotherapies, Inc. v. Biogen Idec,
304 Fed. Appx. 866, 2008 U.S. App. LEXIS 25661
(Fed. Cir. 2008)
- In light of our decision in In re Bilski , we
affirm the district courts grant of summary
judgment that these claims are invalid under 35
U.S.C. 101. - Classens claims are neither tied to a
particular machine or apparatus, nor do they
transform a particular article into a different
state or thing
55Prometheus Laboratories Inc. v. Mayo
Collaborative ServicesFed. Supp. 2d, 2008 WL
878910 (S.D.Cal 2008)
- Patents were directed to methods of measuring
the level of certain metabolites (6-thioguinine
and 6-methylmercaptopurine) in blood of patients
taking certain drugs for autoimmune diseases and
indicating that the adjustment of the drug dosage
may be required based on the measurements to
avoid toxic side effects. U.S. Patent Nos.
6,355,623 and 6,680,302 - The claims embody only the correlations between
the level of metabolites and therapeutic efficacy
and toxicity in patients taking the drug. - The court deems the correlations deemed as
natural phenomena. - Patents are invalid as directed to
patent-ineligible subject matter.
56In re Bilski
57Tips for Success
- Keep Filing Patent Applications
- Include Sufficient Disclosure
- How is data gathered?
- What does data represent?
- How is data transformed?
- Draft Claims In View of Recent PTO Guidelines
- Include Claims of Varying Scope
- Review Existing Portfolio
- Watch For the Supreme Court Decision
58The End
- Thank you
- Thomas Engellenner
- Reza Mollaaghababa
- Michael Doyle
- Nutter, McClennen Fish, LLP
- Boston