Defining patent eligibility by extrapolating the judicial outlook of software onto biotechnology patents.

• Author: Grigas, Joanna M.

Who in the rainbow can draw the line where the violet tint ends and the orange tint begins? Distinctly we see the difference of the colors, but where exactly does the one first blendingly enter into the other? So with sanity and insanity. (1)

1. INTRODUCTION

   The U.S. Patent Act delineates whether an invention can receive a patent in the United States by analyzing patent eligibility--whether the invention fits into a patent-protected group--and patentability--whether the statutory provisions pertinent to that specific invention are satisfied. (2) Section 101 operates as a coarse filter for patent eligibility by examining the subject matter and the utility of the claimed invention. (3) Suitable subject matter for patent eligibility includes processes, machines, manufactures, and compositions of matter. (4) Congress encourages the U.S. Patent and Trademark Office ("USPTO") to examine patent eligibility liberally because "anything under the sun that is made by man" is admissible for the subject matter of a patent. (5) The only exceptions to patent-eligible subject matter are laws of nature, physical phenomena, and abstract ideas; even if one of these exceptions falls into a patent-eligible category (process, machine, manufacture, or composition of matter), it will not be patent eligible. (6) While [section] 101 prescribes whether claims are patent eligible, the courts have struggled to determine an appropriate test or standard to analyze whether the patent claim is a law of nature, physical phenomenon, or an abstract idea, especially in the software and biotechnology industries. (7)

   U.S. patent law aims to "promote the [p]rogress of [s]cience and useful [a]rts" by giving inventors exclusive rights to their inventions for a limited period of time. (8) Major advances in biotechnology and software challenge the patent system because these industries have increasingly flooded the USPTO with patent applications. (9) In response, the USPTO has issued patents that may be considered more upstream in the patenteligibility continuum by allowing patents on inventions that are closer to the exceptions: laws of nature, physical phenomena, and abstract ideas. (10) In Association for Molecular Pathology v. Myriad Genetics, Inc. ("AMP"), (11) the U.S. Court of Appeals for the Federal Circuit ("CAFC") determined that isolated DNA was patentable subject matter, though the Supreme Court has granted this matter certiorari to evaluate this evolution in biotechnology. (12) Conversely, in Cybersource Corp. v. Retail Decisions, Inc., (13) the CAFC held that a credit card fraud invention was too broad to satisfy the patent-eligibility requirement of [section] 101. (14) While the rules to determine patent eligibility have changed with time, they have never allowed patents to cover fundamental ideas, phenomena, or laws of nature. (15) Otherwise, these patents could lead to a tragedy of the anticommons--where broad, upstream patents block experimentation from occurring downstream--by allowing people who own upstream patents to force downstream investigators to seek licensing or attempt to research ways around the patents. (16)

   This Note compares the courts' interpretation of biotechnology compositions of matter patents in AMP to the software business method patents in CyberSource. (17) This Note will specifically examine these underlying inventions to show that a workable rule for determining patentability under [section] 101 needs to be determined. (18) Part II discusses the history and progress of relevant case law surrounding patent eligibility for software and biotech patent claims. (19) Part III analyzes the distinctions the court made between the claims in AMP and Cybersource (20) Part IV examines how innovators should use claim construction to ensure their claims are sufficiently downstream to avoid the [section] 101 exceptions. (21) Finally, Part V details how Congress, the courts, the USPTO, and innovation ideology should help create a better structure for [section] 101 by allowing more researchers to work in their fields of interest. (22)

2. GENERAL HISTORY OF PATENT CLAIMS

   1. Congress's Role in the Patent System

      Congress has modified the Patent Act several times since its enactment in 1790. (23) The Patent Act of 1793 expanded patentable subject matter to include additional categories of patent-eligible subject matter. (24) Yet, the most significant change affecting patent eligibility in the Patent Act took place in 1952, when Congress clarified terms to help determine whether a patent claim falls into a patent-eligible category. (25)

   2. The Supreme Court's Landmark Cases

      The Supreme Court attempted to further delineate the boundaries of patent eligibility in three landmark cases by examining patent claims related to abstract ideas, which are exceptions to [section] 101. (26) In the 1972 Gottschalk v. Benson (27) decision, the Court held that a patent claim for a process of changing a numbering format was too abstract because it required only mental steps and could be used in any desired field without limits. (28) Six years later, in Parker v. Flook (29) the Court held that a method claim was unpatentable even though the claim limited the algorithm to only a portion of potential algorithm uses. (30) The Court declared that limiting a formula's use to one area was a post-solution activity that did not transform an unpatentable claim into a patentable claim. (31) Finally, in the 1981 Diamond v. Diehr (32) decision, the Court created a consistent standard for courts and the USPTO to view patent claims; the Court determined that patent claims should be reviewed "as a whole," rather than by review after splitting up the claims into separate pieces. (33) The Court decided that a patent claim that used a mathematical formula to calculate correct timing for processing rubber was patent eligible because the formula's application transformed the article. (34) The Diehr decision loosened the restriction on the use of the [section] 101 exceptions in a patent claim by showing a context where a claim that included an abstract idea could be patent eligible. (35)

   3. Fluctuation in the Judicial Branch to Create Proper [section] 101 Test

      In the early 1980s, the Court of Customs and Patent Appeals established a two-part test to determine patent eligibility called the Freeman-Walter-Abele test. (36) The Freeman-Walter-Abele test first asked whether the claim included an algorithm, and if so, whether the claim, in its entirety, preempted the algorithm. (37) Although this test was utilized for some time, the CAFC altered the patent-eligibility standard in 1998 in State Street Bank & Trust Co. v. Signature Financial Group, Inc. ("State Street" (38) by requiring that patent claims produce a "useful, concrete, and tangible result." (39) The State Street decision changed the threshold of patent eligibility and permitted business method patents to be patent eligible for the first time. (40)

      The Supreme Court, in turn, questioned the State Street test and opined that the "useful, concrete, and tangible result" requirement should not be part of the patent-eligibility analysis. (41) The CAFC responded to this request by establishing the machine-or-transformation test, which acknowledges patent eligibility when the claim is connected to a specific machine or transforms an object into a separate state or item. (42) The Supreme Court responded to the latest CAFC attempt at solidifying a patent-eligibility test by explaining that the machine-or-transformation test is not the sole test for determining patent eligibility, but rather a useful tool to be used in evaluation. (43) Instead, the Court urged lower courts to follow the Court's precedents, like Benson, Flook, and Diehr (44) While new technological changes require [section] 101 to dynamically include novel inventions, the lower courts are encouraged to formulate further criteria for patent eligibility. (45)

   4. USPTO Responds to the Supreme Court's View of [section] 101

      The USPTO responded to the Supreme Court's revisions of patent eligibility by changing its examination guidelines in 2001, 2009, 2010, and 2012. (46) The revised Utility Examination Guidelines ("Guidelines"), drafted in 2001, required the patentee to disclose at least one practical benefit of the invention that is "specific, substantial, and credible," which implies that the invention is downstream of the exceptions to [section] 101. (47) In 2009, the USPTO restructured the guidelines by issuing the New Interim Patent Subject Matter Eligibility Examination Instructions to patent examiners. (48) These instructions required that patent claims have tangible limitations so that not all acceptable applications are covered by the patent claim. (49) In 2010, the USPTO responded to the Supreme Court's view of the machine-or-transformation test by encouraging examiners to continue the test's usage as a tool to determine if the patent claims appear to be patent eligible under [section] 101. (50) In 2012, the USPTO issued the 2012 Interim Procedure for process claims that involve laws of nature after the Court issued its most recent [section] 101 case. (51)

3. PATENT PROGRESSION IN INDIVIDUAL INNOVATION FIELDS

   1. Evolution of Software Patents

      1. The Supreme Court's Early Precedential Decisions Regarding Software Patents

         As innovations in the high-tech field continue to develop, the influx of software patent applications encourages the patent system to become more accepting of new software inventions. (52) Initially, the Supreme Court in Flook and Benson viewed software patents unfavorably because software often relies on algorithms. (53) The Diehr decision in 1981, however, lowered the threshold for software patents, as the Court allowed a patent claiming an improved process of molding rubber, even though the claim utilized an algorithm. (54) As a result of these Court rulings, a software patent could only satisfy [section] 101 by using an...