A Liberal Encouragement: Patentable Subject Matter After Bilski
| Publication year | 2011 |
| Pages | 55 |
2011, January, Pg. 55. A Liberal Encouragement: Patentable Subject Matter After Bilski
January 2011
Vol. 40, No. 1 [Page 55]
Intellectual Property Law articles are sponsoredby the CBA Intellectual Property Section. They provide information of interest to intellectual property and technology attorneys who advise clients on protecting and exploiting various forms of intellectual property in the marketplace.
Coordinating Editor
William F. Vobach, Littleton, of Swanson and Bratschun, L.L.C.-(303) 268-0066, bvobach@sbiplaw.com
About the Author
Kenneth J. Shakeshaft is an attorney practicing in Denver and Colorado Springs. His practice emphasizes workers' compensation, personal injury, dog bites, and disability claims. He is editor of the Workers' Compensation section of Trial Talk-(800) 383-5886, office@shakeshaftlawfirm.com.
In re Bilski, decidedby the U.S. Supreme Court in June 2010, maintains a flexible approach to determining what subject matter is potentially patentable. This article reviews the case, the history of subject-matter patentability, and the potential impact of Bilski.
Thomas Jefferson is often credited with being the first patent examiner in the United States, although more precisely, he was one of a panel of three-with Henry Knox and Edmond Randolph-who collectively performed the functions of both examiner and commissioner.(fn1) In that role, Jefferson developed principles that continue to form the basis of how patents are examined. Much of his thinking survives in his correspondence with inventors and others as he grappled to develop a coherent patent system for a fledgling country.
One of his more interesting series of correspondence was with Oliver Evans, a prolific inventor who not only sought patents in a variety of areas, most notably in milling and steam-engine technologies, but also enforced those patents. In a quaint twist of irony, Jefferson was among those who grudgingly paid royalties to Evans on a patent for "elevators, conveyors and hopper boys."(fn2) In a letter to Evans written in 1807, Jefferson famously commented that "[n]obody wishes more than I do that ingenuity should receive a liberal encouragement."(fn3)
It is a phrase that has been quoted often, and one that has influenced the U.S. Supreme Court in its interpretation and construction of patent law. For example, the Court cited it in 1980 when it acknowledged that manmade life forms can be patented.(fn4) In 2010, the Court cited it in Bilski v. Kappos(fn5) when it held that the Patent Act (Act) "precludes the broad contention that the term 'process' categorically excludes business methods,"(fn6) meaning that at least some business methods are patentable. Ever since the Court of Appeals for the Federal Circuit (CAFC) asserted in 1999 in State Street Bank v. Signature Financial Group that "business methods have been, and should have been, subject to the same legal requirements for patentability as applied to any other process or method,"(fn7) businesses and inventors have awaited clear guidance from the Supreme Court on the issue.
This article considers the effect and influence of Bilski on the scope of patentable subject matter, particularly as it relates to business-method and software patents. It begins with a general overview of the kinds of tests that have been appliedby the courts at different times. It then provides a historical review of the development of the dominant "machine-or-transformation" test, focusing primarily on the Supreme Court's jurisprudence in that area. The article next analyzes Bilski and reviews the Interim Guidelines developedby the U.S. Patent and Trademark Office (USPTO) in response to Bilski. Finally, it offers some practical pointers for patent practitioners.
Subject-Matter Tests Before Bilski
State Street resulted in a sharp increase in the number of applications filed with the USPTO that embraced "business methods." Despite this increase, parties involved with the prosecution of business-method applications-applicants, practitioners, examiners, and judges-have continued to struggle with which test to apply to ensure their applications comport with 35 U.S.C. § 101, the statute defining what subject matter is patentable.
At first blush, § 101 is relatively simple and plainly intended to be broad, embracing Congress's memorably poetic desire to include "anything under the sun that is madeby man":(fn8)
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.
Of the four specified categories of patentable subject matter, only "process" is further defined in the Act, perhaps reflecting the difficulty courts have had in circumscribing the scope of what is included: "The term 'process' means process, art, or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material."(fn9)
There are three exceptions to the broad sweep of patent eligibility: "laws of nature, physical phenomena, and abstract ideas."(fn10) Though these principles are easy to state, there can be considerable difficulty identifying when a recited process is nothing more than an unpatentable abstract idea. To constrain the concept to be more amenable to practical application, courts have applied a number of tests. In 2008, the CAFC ultimately settled on the machine-or-transformation test in In re Bilski.(fn11) However, it is worth commenting briefly on the principal earlier tests to provide context for the more flexible approach adoptedby the Supreme Court in Bilski.
Freeman-Walker-Abele Test
The Freeman-Walker-Abele test had its genesis in a trio of decisions(fn12)by the Court of Customs and Patent Appeals (CCPA), the precursor to the CAFC. It was developed in the context of software claims, and predates State Street. In its final form, it was expressed as a two-part test:
1. Does the claim recite an algorithm?
Although this test was widely applied for many years, it was ultimately rejectedby the CAFC when it held that a claim was in compliance with the subject-matter provisions of § 101 even though it failed the test.(fn13)2. If so, is that algorithm applied in any manner to physical elements or process steps?
Useful, Concrete, and Tangible Result Test
The focus on a result that is "useful, concrete, and tangible" is usually associated with State Street, but actually has its origins in the earlier CAFC case of In re Alappat.(fn14) The test was developed as an attempt to comply with the Supreme Court's directive to distinguish between "disembodied mathematical concepts" that may be characterized as abstract ideas and those that have been reduced to some practical application. The test would find a claim to be directed to statutory subject matter only if it produced such a result; however, as noted below, the Supreme Court views this test with disfavor.
Technological Arts Test
The technological arts test was used for a timeby the USPTO to reject claims lacking a "technological basis," particularly claims embracing an algorithm without being linked with some kind of electronic device. The test has its foundation in In re Musgrave,(fn15) but was ultimately rejectedby the USPTO in Ex Parte Lundgren.(fn16) Although several amici continued to advocate adoption of the test, the CAFC determined that it involves too much ambiguity because the term "technological arts" is not only cryptic but also tends to change over time.(fn17)
Mental Processes Test
In In re Bilski, the CAFC noted concern that its decision in In re Comiskey(fn18) might be viewed as articulating something reminiscent of the technological arts test in the form of a "mental processes" test that would bar claims reciting mental processes without sufficient "physical steps." The CAFC has indicated that this understanding of Comiskey is inaccurate.(fn19)
Status After Bilski
Part of the CAFC's objective in In re Bilski appears to have been a desire to simplify a proliferation of subject-matter testsby distilling its prior holdings to a single test, namely the machine-or-transformation test. It accordingly gave explicit consideration to each of the tests described above, either rejecting aspects that did not comport with the machine-or-transformation test or explaining how aspects are merely specific manifestations of that test.
However, the Supreme Court stated in Bilski v. Kappos that the machine-or-transformation test is "a useful and important clue [but not] the sole test."(fn20) As a result, it is possible that renewed life could be breathed into some aspects of these rejected tests, particularly if the CAFC responds to an apparent invitationby the Supreme Court to "develop[] other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text."(fn21)
Machine-or-Transformation Test: Historical Review
The principal test for evaluating software and business-method applications today is derived from an 1877 case involving a process for manufacturing flour. In Cochrane v. Deener,(fn22)theSupreme Courtconsidered an invention in which ground meal was passed through a series of bolting reels clothed with progressively finer meshes while subjecting the meal to air blasts so that particles of different sizes would be separated in producing the flour. The process was not limited to any particular arrangement of machinery, prompting the Court to note that
a process may be patentable, irrespective of the...
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