Patent Law

Definitely Not

By Gary Odom and Jordan Kuhn

Bilski's claims are putrid, being neither useful nor definite, and hence non-patentable under §101 and §112 ¶2. The Supreme Court should rightfully ignore flawed CAFC case law, looking to its own precedents, most notably Diamond v. Diehr (for §101) and Markman v. Westview Instruments (§112 ¶2). Here's how SCOTUS should shoot down Bilski and claims of its ilk - recognize the intertwining of  §101 and §112 ¶2, that an ill-defined process is a strong indicator of indefinite usefulness, and hence unpatentable subject matter.

§101

35 U.S.C. § 101 Inventions patentable.
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.

In a nutshell, the Supreme Court has followed statute in defining the boundaries of §101 eligible processes: 1) useful and 2) not abstract. From Diamond v. Diehr:

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).

Bilski claim 1:

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; and (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.

Bilski's process claims three steps: 1) initiate transactions; 2) identify market participants; and 3) initiate transactions. Useful? Where is there a stated useful result? What about the "such that" clause? It balances risk. Maybe useful. Maybe abstract.

§112 ¶2

Prior to the Patent Act of 1952, the dual prongs of definiteness and enablement were in the same sentence. That incurred sometime confusion, though clarity shone in Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45 (1923), where the Supreme Court related definiteness to usefulness.

Indefiniteness is objectionable, because the patent does not disclose to the public how the discovery, if there is one, can be made useful, and how its infringement may be avoided.

Since 1952...

35 U.S.C. 112 Specification.

¶2 The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.

In Markman v. Westview Instruments, 517 U.S. 370, 38 USPQ2d 1461 (1996), the Supreme Court laid the table for claim construction as the centerpiece of patent litigation. On definiteness:

It has long been understood  that a patent must describe the exact scope of an invention and its manufacture to "secure to [the patentee] all to which he is entitled, [and] to apprise the public of what is still open to them." McClain v. Ortmayer, 141 U.S. 419, 424 (1891)...

Whereupon SCOTUS reiterated §112 ¶1&2. The point of definiteness in a patent claim is to set boundaries.

Back to Bilski, balancing risk. The claim goes to managing "consumption risk" for which Bilski gave an example, not a definition: "e.g., the need to use more or less energy than planned due to the weather." What constitutes the cost of consumption risk? What constitutes balance? The scope is unclear. Definitely not definite. Hence, not §112 ¶2 compliant. That practically proves that the claim goes an "abstract idea."

The Supreme Court found the CAFC too rigid with its TSM (teaching-suggestion-motivation) test for obviousness, but then went overboard in grabbing a non-objective yardstick. Many fear that the Supreme Court will become even more rigid than the CAFC in Bilski, curtailing or even adding more prongs to the CAFC's two-prong process patentability test (1. machine dependence; or 2. transformation). But, to get it right, all the Supreme Court has to do in Bilski is reaffirm its own precedents, and tighten the loop - that a process claim failing "exact scope" demonstrates lack of patentability, either in not being clearly useful, or in claiming an abstraction.

Full post as published by The Patent Prospector on June 26, 2009 (boomark / email).