Patent Law

The Diamond

By Gary Odom and Jordan Kuhn

Bilski's and Warsaw's "managing... consumption risk costs," are miserable claims to be scuttling to the Supreme Court on the topic of patentable subject matter, because they clearly are not patentable under §112 ¶2, not to mention §101. At issue is whether the CAFC misconstrued §101, in limiting processes to: 1) machine dependence or 2) transformation. This is something to be scraped off the judicial shoe as too close-minded, just as Judge Newman opined in dissent. What should/will SCOTUS do? To read the crystal ball, peer into how the Supreme Court has decided before. As to that, one gem gleams.

With exception, the Supreme ignores lower court rulings. The exception is in flogging. In KSR, for example, the CAFC precursor was a mere whipping post of wrong interpretation, namely, the CAFC being too rigid.

So the place to look for insight as to the direction that SCOTUS might vector is in its own court's history.

The last time the Supreme Court took up patentability was in 1981, in Diamond v. Diehr, 450 U.S. 175. The patent was for a computer process for curing rubber, which was found patentable.

In cases of statutory construction, we begin with the language of the statute. Unless otherwise defined, "words will be interpreted as taking their ordinary, contemporary, common meaning," Perrin v. United States, 444 U.S. 37, 42 (1979), and, in dealing with the patent laws, we have more than once cautioned that "courts `should not read into the patent laws limitations and conditions which the legislature has not expressed.'" Diamond v. Chakrabarty, supra, at 308, quoting United States v. Dubilier Condenser Corp., 289 U.S. 178, 199 (1933).

The Patent Act of 1793 defined statutory subject matter as "any new and useful art, machine, manufacture or composition of matter, or any new or useful improvement [thereof]." Act of Feb. 21, 1793, ch. 11, 1, 1 Stat. 318. Not until the patent laws were recodified in 1952 did Congress replace the word "art" with the word "process." It is that latter word which we confront today, and in order to determine its meaning we may not be unmindful of the Committee Reports accompanying the 1952 Act which inform us that Congress intended statutory subject matter to "include anything under the sun that is made by man." S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H. R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952).

Although the term "process" was not added to 35 U.S.C. 101 until 1952, a process has historically enjoyed patent protection because it was considered a form of "art" as that term was used in the 1793 Act. 7 In defining the nature of a patentable process, the Court stated:

"That a process may be patentable, irrespective of the [450 U.S. 175, 183] particular form of the instrumentalities used, cannot be disputed. . . . A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing. If new and useful, it is just as patentable as is a piece of machinery. In the language of the patent law, it is an art. The machinery pointed out as suitable to perform the process may or may not be new or patentable; whilst the process itself may be altogether new, and produce an entirely new result. The process requires [450 U.S. 175, 184] that certain things should be done with certain substances, and in a certain order; but the tools to be used in doing this may be of secondary consequence." Cochrane v. Deener, 94 U.S. 780, 787 -788 (1877).

Analysis of the eligibility of a claim of patent protection for a "process" did not change with the addition of that term to 101. Recently, in Gottschalk v. Benson, 409 U.S. 63 (1972), we repeated the above definition recited in Cochrane v. Deener, adding: "Transformation 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." 409 U.S., at 70 .

Into what is not patentable, namely, abstractions and discoveries of nature or laws of nature. Bilski is easily chalked down to mere concept. But the telling sentence in the below paragraph is that there is nothing inherently non-patentable about computer-based or algorithm-employed processes.

Our conclusion regarding respondents' claims is not altered by the fact that in several steps of the process a mathematical equation and a programmed digital computer are used. This Court has undoubtedly recognized limits to 101 and every discovery is not embraced within the statutory terms. Excluded from such patent protection are laws of nature, natural phenomena, and abstract ideas. See Parker v. Flook, 437 U.S. 584 (1978); Gottschalk v. Benson, supra, at 67; Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948). "An idea of itself is not patentable," Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 507 (1874). "A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right." Le Roy v. Tatham, 14 How. 156, 175 (1853).

Now to computer processes specifically. Here the past held two cases in the negative.

Gottschalk v. Benson went to a numeric conversion algorithm, and so easily denied.

Our recent holdings in Gottschalk v. Benson, supra, and Parker v. Flook, supra, both of which are computer-related, stand for no more than these long-established principles. In Benson, we held unpatentable claims for an algorithm used to convert binary code decimal numbers to equivalent pure binary numbers. The sole practical application of the algorithm was in connection with the programming of a [450 U.S. 175, 186] general purpose digital computer. We defined "algorithm" as a "procedure for solving a given type of mathematical problem," and we concluded that such an algorithm, or mathematical formula, is like a law of nature, which cannot be the subject of a patent.

Similarly, Parker v. Flook was a hazy formula which had an intrinsic §112 problem as well, much like Bilski.

Parker v. Flook, supra, presented a similar situation. The claims were drawn to a method for computing an "alarm limit." An "alarm limit" is simply a number and the Court concluded that the application sought to protect a formula for computing this number. Using this formula, the updated alarm limit could be calculated if several other variables were known. The application, however, did not purport to explain how these other variables were to be determined, 10 nor [450 U.S. 175, 187] did it purport "to contain any disclosure relating to the chemical processes at work, the monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system. All that it provides is a formula for computing an updated alarm limit." 437 U.S., at 586 .

Again affirmation of "novel and useful" applications, including well-defined computer processes, as patentable.

Our earlier opinions lend support to our present conclusion that a claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program, or digital computer. In Gottschalk v. Benson we noted: "It is said that the decision precludes a patent for any program servicing a computer. We do not so hold." 409 U.S., at 71 . Similarly, in Parker v. Flook we stated that "a process is not unpatentable simply because it contains a law of nature or a mathematical algorithm." 437 U.S., at 590 . It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection. See, e. g., Funk Bros. Seed [450 U.S. 175, 188] Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948); Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45 (1923); Cochrane v. Deener, 94 U.S. 780 (1877); O'Reilly v. Morse, 15 How. 62 (1854); and Le Roy v. Tatham, 14 How. 156 (1853). As Justice Stone explained four decades ago:

"While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be." Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, 94 (1939). '

We think this statement in Mackay takes us a long way toward the correct answer in this case.

Then, warning to consider the claims as a whole, and not mix prior art analysis with considering patentable subject matter.

In determining the eligibility of respondents' claimed process for patent protection under 101, their claims must be considered as a whole. It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. This is particularly true in a process claim because a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made. The "novelty" of any element or steps in a process, or even of the [450 U.S. 175, 189] process itself, is of no relevance in determining whether the subject matter of a claim falls within the 101 categories of possibly patentable subject matter.

It has been urged that novelty is an appropriate consideration under 101. Presumably, this argument results from the language in 101 referring to any "new and useful" process, machine, etc. Section 101, however, is a general statement of the type of subject matter that is eligible for patent protection "subject to the conditions and requirements of this title." Specific conditions for patentability follow and 102 covers in detail the conditions relating to novelty. [450 U.S. 175, 190] The question therefore of whether a particular invention is novel is "wholly apart from whether the invention falls into a category of statutory subject matter." In re Bergy, 596 F.2d 952, 961 (CCPA 1979) (emphasis deleted). See also Nickola v. Peterson, 580 F.2d 898 (CA6 1978). The legislative history of the 1952 Patent Act is in accord with this reasoning.

The finale of Diehr draws boundaries of what is not patentable: "formula in the abstract," which "insignificant postsolution activity" does not cure.

We recognize, of course, that when a claim recites a mathematical formula (or scientific principle or phenomenon of nature), an inquiry must be made into whether the claim is seeking patent protection for that formula in the abstract. A mathematical formula as such is not accorded the protection of our patent laws, Gottschalk v. Benson, 409 U.S. 63 (1972), and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment. Parker v. Flook, 437 U.S. 584 (1978). Similarly, insignificant postsolution activity will not transform [450 U.S. 175, 192] an unpatentable principle into a patentable process. Ibid. To hold otherwise would allow a competent draftsman to evade the recognized limitations on the type of subject matter eligible for patent protection. On the other hand, when a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect (e. g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of 101.

The foregoing gives an example of patentable processes, which the CAFC interpreted rigorously as circumscription. Two letters: "e.g.," indicate that SCOTUS meant transformation as exemplary, not exhaustive. The CAFC test prong of tying to a machine/device has no foundation in High Court rulings. Supreme Court precedent lacks any necessity to tie a process to another category of patentable subject matter. Diehr's bottom line -

[C]ourts should not read into the patent laws limitations and conditions which the legislature has not expressed.

It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.

SCOTUS KSR was an admonishment of CAFC rigidity in viewing obviousness. SCOTUS MedImmune was an admonishment of CAFC rigidity in limiting declaratory judgment actions when actual controversies exist. SCOTUS eBay was an admonishment of CAFC rigidity in taking injunctive relief as an intrinsic right of a patent holder without considering circumstances.

The CAFC's Bilski take on patentable subject matter was rigid in enumerating patentable subject matter. Hopefully the Supreme Court sees it that way. Otherwise, the Court betrays its own precedents.

Full post as published by The Patent Prospector on June 07, 2009 (boomark / email).