Patent Law

Divining Bilski

By Gary Odom and Jordan Kuhn

Bilski was nothing short of a jurisprudential obscenity, horrendous in its incoherence. To the degree it was coherent, it was ludicrous. That makes Bilski a definitive statement on the quality of the CAFC, most notably majority author Chief Judge Michel. Only Judges Newman and Rader had a clue. As Judge Newman put it:

This exclusion of process inventions is contrary to statute, contrary to precedent, and a negation of the constitutional mandate. Its impact on the future, as well as on the thousands of patents already granted, is unknown.

From one judge to another, that's harsh language. None more harsh.

Pundit readings of Bilski have been wildly divergent. Those who considered it "status quo," including this pundit, very likely got it wrong. Mea culpa. Those who considered Bilski obliterating software patents in toto also got it wrong. I hope. Upon more careful review and contemplation, the hideous truth of Bilski's corpse lies between the two camps.

The first Patent Prospector coverage of Bilski has a different set of quotes. Herein, extracts and alternate takes.

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.

What the CAFC referred to as "the machine-or-transformation test."

"Article" is a 13th century word, meaning, among other things, "an item of business; matter". Its dictionary context is so ambiguous as to make it a very poor choice of words without further definition. In other words, "article" was used by Judge Michel as a lexicographical straw man.

A claimed process is patent-eligible if it transforms an article into a different state or thing. This transformation must be central to the purpose of the claimed process. But the main aspect of the transformation test that requires clarification here is what sorts of things constitute "articles" such that their transformation is sufficient to impart patent-eligibility under § 101. It is virtually self-evident that a process for a chemical or physical transformation of physical objects or substances is patent-eligible subject matter.

Here's where the anti-software patent view comes home to roost.

The raw materials of many information-age processes, however, are electronic signals and electronically-manipulated data. And some so-called business methods, such as that claimed in the present case, involve the manipulation of even more abstract constructs such as legal obligations, organizational relationships, and business risks. Which, if any, of these processes qualify as a transformation or reduction of an article into a different state or thing constituting patent-eligible subject matter?

Our case law has taken a measured approach to this question, and we see no reason here to expand the boundaries of what constitutes patent-eligible transformations of articles.

For the majority, Benson was a touchstone in the majority, as to what was not patentable: something with "no utility other than operating on a digital computer," that is, software ipso facto.

[I]n 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. Benson, 409 U.S. at 71-72. Thus, the claim's tie to a digital computer did not reduce the pre-emptive footprint of the claim since all uses of the algorithm were still covered by the claim.

Diehr was another touchstone, for what was patentable: computerized process control.

The process claimed in Diehr, for example, clearly met both criteria. The process operated on a computerized rubber curing apparatus and transformed raw, uncured rubber into molded, cured rubber products. Diehr, 450 U.S. at 184, 187.

Abele was the most illuminating example provided by the muddled majority, affording patentability, in the Bilski opinion, to software that represented a "physical object." Hence, software is patentable "so long as the claimed process is limited to a practical application... to transform specific data, ...to a visual depiction that represents specific physical objects or substances."

Our predecessor court's mixed result in Abele illustrates this point. There, we held unpatentable a broad independent claim reciting a process of graphically displaying variances of data from average values. Abele, 684 F.2d at 909. That claim did not specify any particular type or nature of data; nor did it specify how or from where the data was obtained or what the data represented. Id.; see also In re Meyer, 688 F.2d 789, 792-93 (CCPA 1982) (process claim involving undefined "complex system" and indeterminate "factors" drawn from unspecified "testing" not patent-eligible). In contrast, we held one of Abele's dependent claims to be drawn to patent-eligible subject matter where it specified that "said data is X-ray attenuation data produced in a two dimensional field by a computed tomography scanner." Abele, 684 F.2d at 908-09. This data clearly represented physical and tangible objects, namely the structure of bones, organs, and other body tissues. Thus, the transformation of that raw data into a particular visual depiction of a physical object on a display was sufficient to render that more narrowly-claimed process patent-eligible.

We further note for clarity that the electronic transformation of the data itself into a visual depiction in Abele was sufficient; the claim was not required to involve any transformation of the underlying physical object that the data represented... So long as the claimed process is limited to a practical application of a fundamental principle to transform specific data, and the claim is limited to a visual depiction that represents specific physical objects or substances, there is no danger that the scope of the claim would wholly pre-empt all uses of the principle.

Majority manipulation of Benson sucks oxygen from the idea that software can find succor in being able to particularize a machine, prong one of the process test.

The 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."

The court found State Street's "practical application" test "inadequate." And the physicality ("physical steps") of AT&T is bashed, in view of State Steet.

In AT&T, we rejected a "physical limitations" test and noted that "the mere fact that a claimed invention involves inputting numbers, calculating numbers, outputting numbers, and storing numbers, in and of itself, would not render it nonstatutory subject matter." 172 F.3d at 1359 (quoting State St., 149 F.3d at 1374).

The ruling leaves me wondering how software could ever meet the test of being tied to a "particular" machine, other than transforming something physical, as in computerized process control altering physical objects.

But the main aspect of the transformation test that requires clarification here is what sorts of things constitute "articles" such that their transformation is sufficient to impart patent-eligibility under § 101. It is virtually self-evident that a process for a chemical or physical transformation of physical objects or substances is patent-eligible subject matter.

Physicality itself is not patentable, unless tied to a machine.

The correct analysis is whether the claim meets the machine-or-transformation test, not whether it recites "physical steps." Even if it is true that Applicant's claim "can only be practiced by a series of physical acts" as they argue, see id. at 9, its clear failure to satisfy the machine-or-transformation test is fatal.

In my view now, nothing but uncertainty abounds. Even though a software process is necessarily tied to a machine, such as "a computer-implemented process," is it not patentable if it only transforms data which is not representative of a physical object? Does a computer-implemented process become patentable by transforming data representative of a physical object? Is software inherently patentable because its processes necessarily involve physical transformation of the disk drives that store data processed by software? Is a novel way of deleting files patentable, because graphical user interfaces depict file deletion as a trash can, which is a physical object?  Does any relation to a physical object make a software method patentable? Aren't electronic documents representative of physical documents, and, in fact can be used to create physical documents? Hence, is electronic document processing patentable subject matter? Are all database processing patents invalid, because their data does not necessarily represent physical objects? But what if the database is populated by data for physical goods, such as for an online vendor like Amazon?

The majestic Judge Newman, for every precedent cited, show Michel's analysis as facile and ill-considered. Judge Newman then played what should have been a trump card, but wasn't:

In Tilghman v. Proctor the Court considered a patent on a process for separating fats and oils, and held that the process was not restricted to any particular apparatus. The Court held that a process is an independent category of invention, and stated:

That a patent can be granted for a process, there can be no doubt. The patent law is not confined to new machines and new compositions of matter, but extends to any new and useful art or manufacture.

102 U.S. at 722; see also Corning v. Burden, 56 U.S. (15 How.) 252, 268 (1853) ("It is for the discovery or invention of some practical method or means of producing a beneficial result or effect, that a patent is granted, and not for the result or effect itself.")

Perhaps the worst is to be feared from Bilski. Certainly Judge Newman feared the worst from her colleagues' insanity in Bilski.

The court thus excludes many of the kinds of inventions that apply today's electronic and photonic technologies, as well as other processes that handle data and information in novel ways. Such processes have long been patent eligible, and contribute to the vigor and variety of today's Information Age.

The Court made clear that it was not barring patents on computer programs, and rejected the "argu[ment] 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'" in order to satisfy Section 101. Id. Although my colleagues now describe these statements as "equivocal," maj. op. at 14, there is nothing equivocal about "We do not so hold." Benson, 409 U.S. at 71. Nonetheless, this court now so holds.

Until the shift represented by today's decision, statute and precedent have provided stability in the rapidly moving and commercially vibrant fields of the Information Age. Despite the economic importance of these interests, the consequences of our decision have not been considered. I don't know how much human creativity and commercial activity will be devalued by today's change in law; but neither do my colleagues.

We aren't told when, or if, software instructions implemented on a general purpose computer are deemed "tied" to a "particular machine," for if Alappat's guidance that software converts a general purpose computer into a special purpose machine remains applicable, there is no need for the present ruling. For the thousands of inventors who obtained patents under the court's now-discarded criteria, their property rights are now vulnerable.

Although this uncertainty may invite some to try their luck in court, the wider effect will be a disincentive to innovation-based commerce. For inventors, investors, competitors, and the public, the most grievous consequence is the effect on inventions not made or not developed because of uncertainty as to patent protection.

What does Bilski portend, now that the CAFC has told stare decisis to kiss its ass? From here, right now, it looks like pure chaos to me.

Full post as published by The Patent Prospector on November 04, 2008 (boomark / email).