From Bilski back to Benson: preemption, inventing around, and the case of genetic diagnostics.

• Author: Dreyfuss, Rochelle Cooper
• Position: Symposium

INTRODUCTION I. PREEMPTION A. The "Whether" Inquiry B. The "How" Inquiry II. GENETIC DIAGNOSTICS A. The Science of Genetics B. The Effect of Patenting III. LESSONS A. The Ability to Invent Around B. Interoperability C. Breadth of Prospects D. The Identity of the Inventor CONCLUSION INTRODUCTION

This was supposed to be the end of an era. After prolonged uncertainty regarding the patentability of claims drawn to business methods, Bilski v. Kappos (1) was expected to provide guidance on when they constituted patentable subject matter. But while the Court explicitly laid to rest both the Federal Circuit's broad approach in State Street Bank & Trust Co. v. Signature Financial Group (2) and its narrow approach in In re Bilski, (3) the Justices otherwise provided little information on how to determine whether particular subject matter is statutory. In a fractured set of decisions, the Court appeared to do no more than state the obvious. The Patent Act should be read broadly, but "laws of nature, physical phenomena, and abstract ideas" are not within the ambit of protection. (4)

The Justices' opinions featured a series of anomalies. The majority insisted on strict construction of the statute. (5) However, the three exceptions the majority recognized--laws of nature, physical phenomena, and abstract ideas--had all been imposed judicially. State Street, the case approving business method patents, was deemed bad law, but it was impossible to attract five votes for the proposition that business methods are not patentable. (6) And even though business methods are, apparently, patentable, the hedging claims at issue in Bilski were all held invalid--not just the broadest claim, but even the narrow ones. (7) The Court held that the Federal Circuit's "machine-or-transformation" test--under which inventions are unpatentable unless they are tied to a machine, or they transform an article into a different state or thing--is a mere "clue" to patentability; (8) but the Court never indicated how that clue should be used. It is clear that a claim that fails the test is not necessarily invalid, but it remains uncertain whether a claim that passes the test is necessarily valid. Nor did the Court indicate what other clues might be relevant. Amici suggested a "technical effect" test, (9) a "technological arts" doctrine, (10) greater attention to the usefulness of the art, (11) or a return to the "mental steps" doctrine. (12) But aside from references to the "technological arts" in Justice Stevens's concurrence, none of these approaches were discussed. As Justice Stevens put it, "The Court ... never provides a satisfying account of what constitutes an unpatentable abstract idea." (13) In fact, the Court seemingly went out of its way to say nothing. Justice Kennedy's plurality opinion emphasized that "the Court today is not commenting on the patentability of any particular invention." (14)

The Justices did, however, agree on one thing: a patent that "preempts" something (e.g., a mathematical formula, an approach, a commonly used idea, a wide swath of technological developments, the public's access) is very bad indeed. "Preempt" is used in each of the Bilski opinions. (15) Convergence on the term could provide an important hint to the Court's concerns--if, that is, the term had a meaning within scientific and technological discourse. Instead, its use is entirely within the legal domain, where it most often describes the displacement of one law (such as state law) by another (federal law); (16) in an earlier time, it was also used to describe various technical issues arising in claim drafting and prosecution. (17) Justice Douglas elevated the concept to center stage in Gottschalk v. Benson when the issue of protecting computer programs first reached the Supreme Court. (18) Since then, it has caused endless confusion. (19)

Nonetheless, we are apparently now back to Benson; and with the return of preemption, it is time to operationalize the concept. Part I briefly recounts the Supreme Court's attempts to define patentable subject matter, with the aim of identifying the concerns that led the Bilski Court to invoke the language of preemption. It concludes that the real question is not whether an advance is in a field where patenting is appropriate, but how claims are drafted. Claims that "preempt" competitive development--that cover prospects that cannot be efficiently mined by individual right holders--are barred. Part II moves on to consider, as a case study, the field of genetic diagnostics. This is an area particularly ripe for attention. Justice Breyer's dissent from the dismissal of certiorari in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., (20) which ignited the debate over the patents issuing under State Street, was a medical diagnostics case. Considerable empirical work on the effect of patenting has been done in this area; (21) there are cases waiting in the wings, (22) and promising medical and scientific advances are on the horizon. (23) The case study suggests that, at its core, the preemption problem arises when an advance cannot be invented around. When such advances cover broad prospects, patenting would, as Justice Breyer suggested in Metabolite, "impede rather than 'promote ... [p]rogress.'" (24) Part III concludes with thoughts about other indicia for determining when a claim is preempted.

1. PREEMPTION

   It is not especially surprising that this has been an era of uncertainty in patent law. As new technological opportunities emerge, it is inevitable that there will be questions about how the law applies. It happened when the power of steam was first exploited, (25) when the effects of oxygen were discovered, (26) when it became possible to manipulate electric current, (27) and when differential solubility was understood. (28) The recent rapid development of new sciences--such as molecular biology, genomics, electrical engineering, (29) and information and communication technology (30)--creates many fresh challenges. In theory, each technology raises two categories of questions. The first is "whether"--whether existing patent law is appropriate to the new field, or a different (or entirely novel) intellectual property system is necessary. The second is "how"--how the requirements of the system should be applied to the new technology.

   1. The "Whether" Inquiry

      One might have thought that the "whether" inquiry would be labeled the "statutory subject matter question," and the "how" inquiry would be conceived of as addressing issues on the interpretation and application of other provisions of patent law. (31) And indeed, lawmakers have ostensibly followed that approach. Thus, advances in computer science initially raised the question whether software should be considered a literary work for copyright purposes. A national commission was appointed. After it answered in the affirmative, copyright law was amended to deal with foreseeable problems. (32) As it became clear that copyright protection for software would be highly limited, (33) the action moved to patenting--leading to a large number of cases on whether software fit within that realm. (34) Similarly, in State Street, the Federal Circuit was confronted with the question whether business methods are patentable. Taking its cue, perhaps, from Diamond v. Chakrabarty's hospitality to patenting in emerging technologies, (35) the court answered with a broad holding: anything that achieves "a useful, concrete and tangible result" is patentable. (36)

      Because State Street led to the patenting of highly diverse advances--from medical diagnostics to tax-minimization strategies (37) to methods for training janitors to dust (38)--the Supreme Court used the dismissal of certiorari in Metabolite to signal a need to reevaluate. In a series of cases, the Federal Circuit considered a variety of formulations. (39) Eventually, In re Bilski was taken en banc. (40) In that decision, the Federal Circuit narrowed the criteria for patent eligibility. Adopting a test that it thought derived from the Supreme Court's software cases, the court held that a process is statutory subject matter when it is tied to a machine or transforms materials to a different state or thing (the machine-or-transformation test). (41)

      The Supreme Court granted certiorari in Bilski, and at oral argument the Justices pursued the same analytical framework, searching for categorical limits to patentable subject matter. Thus, the Justices asked questions about whether specific enterprises--speed dating, training horses, and teaching students--were patentable subject matter. (42) The Court's decision, however, deviated substantially from the categorical approach. Beyond a firm rejection of State Street, (43) the Supreme Court provided little concrete guidance on what endeavors were eligible for patenting. It held that the machine-or-transformation test was overly restrictive, but nonetheless considered it a "clue" to patentability. (44) It did not, however, indicate how the clue should be used. The main limit the Court identified was an old one--that "laws of nature, physical phenomena, and abstract ideas" are not protectable. (45) In addition, the Court resurrected the preemption trope developed in Benson, the first case on the patentability of a computer method. But while every Justice who wrote an opinion used the term "preempt," no one explained what it meant. (46) Instead, the Court appeared to rely on the "nutshell" with which Justice Douglas summed up Benson:

      The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself. (47) After Bilski, the question is thus what the Court means by "preemption." The law subsequent to Benson had not been a model of...