One claim, one statutory class of invention: how the machine-or-transformation test impacts indefinite analysis.

• Author: LaForgia, Christian

Patent claims define the scope of an inventor's rights under the patent. (1) "A single patent may include claims directed to one or more of the classes of patentable subject matter, but no single claim may cover more than one subject matter class." (2) This is done to apprise one of ordinary skill in the art of the claim's scope, thereby putting others on notice of the patent owner's rights. (3)

Intellectual property law is constantly evolving with technological developments and advancements; (4) patent law is no exception. (5) An example of the evolving concept of what constitutes patentable subject matter can be seen in the recent Bilski v. Kappos decision, where the Supreme Court held that 1) business method claims were patentable under 35 U.S.C. [section] 101 (6) and 2) the machine-or-transformation test was not the sole test for determining the patent-eligibility of a process, but "a useful and important clue, [and] an investigative tool" for making such determinations. (7)

The Court of Appeals for the Federal Circuit attempted to clarify matters with the machine-or-transformation test by stating that a process is patentable only if "(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing." (8) While the Supreme Court cautioned against courts taking the liberty of reading limitations and conditions into patent law that Congress has not expressed, (9) the recent decision raises the question of how to reconcile the machine-or-transformation test with the Federal Circuit and United States Patent and Trademark Office's (USPTO) position that "no single claim may cover more than one subject matter class." (10)

This Note will examine the impact of the Supreme Court's recent decision in Bilski on 35 U.S.C. [section] 112 analysis. Part one will detail the evolution of patentability analysis leading up to the Bilski decision, and how these cases lead to both the Federal Circuit and the Supreme Court's decisions in the Bilski matter. Part two will examine the impact of the Bilski decision, including the guidelines set forth by the USPTO and recent district court decisions applying the Bilski holding. In part three, background information on 35 U.S.C. [section] 112, [paragraph] 2 and indefinite analysis will be provided; specifically, when claims appear to encroach on more than one statutory class of invention. Finally, this Note will address how these two apparently contradictory holdings can co-exist.

1. 35 U.S.C. [section] 101 AND A HISTORY OF PROCESS CLAIMS

   1. The Evolution of Process Claims

      The term process was not part of the original Patent Act and was not codified in federal patent law until 1952. (11) The Patent Act of 1793 provided patent protection to anyone that invented "any new and useful art, machine, manufacture or composition of matter, or any new and useful improvement [thereof]." (12) However, process patents were historically afforded patent protection. (13)

      In 1853, the Supreme Court deemed that process claims fell under the "useful art" statutory class of invention, thereby ensuring patent protection for these types of claims. (14) The Reconstruction Era Court took things further and defined process as:

      [A] mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing. If new and useful, it is just as patentable as is a piece of machinery. In the language of the patent law, it is an art. The machinery pointed out as suitable to perform the process may or may not be new or patentable; whilst the process itself may be altogether new, and produce an entirely new result. The process requires that certain things should be done with certain substances, and in a certain order; but the tools to be used in doing this may be of secondary consequence. (15) This definition of process appears to have laid the groundwork for future decisions, eventually leading up to the Supreme Court's annunciation of the machine-or-transformation test. (16)

      Patentability analysis of process claims was fairly straightforward and simple under the requirement that the claimed process perform some type of transformation; that is until the advent of the digital computer. (17)

      As reliance on computing grew during the 1970s, patent applicants first sought patent protection for computer programs. The USPTO rejected software patent applications as being a combination of unpatentable algorithms. (18) In Gottschalk v. Benson, one of the more prominent cases from that period, the inventor-applicant sought a patent on a method for converting binary-coded decimal into pure binary. (19) The Court regarded the claimed method as a mathematical algorithm, which would have no application except in connection with a computer and would therefore be a patent granted on an abstract idea. (20) Patent rights have continuously been denied to the discovery of novel and useful phenomena of nature, mental processes, and abstract intellectual concepts. (21)

      However, the application of newly discovered phenomena of nature, mental processes, or abstract intellectual concepts have been held to be eligible for patent protection under 35 U.S.C. [section] 101. (22) Most notable is Diamond v. Diehr, which opened the door for software patents when the Supreme Court ruled that implementing a process that continuously monitored the curing temperature of rubber products using a computer was eligible for patent protection. (23) This idea that programs tied to a machine were patent-eligible became known as the Freeman-Walter-Abele test, which rendered statutory any process claim that included a physical element or step. (24)

      The idea of patenting software grew throughout the 1980s and 1990s. (25) The state of software patents remained in flux until a series of decisions in the mid-1990s. In 1994, the Federal Circuit's decision in In re Alappat established that a general-purpose computer "operating pursuant to software may represent patentable subject matter...." (26) After Alappat, practitioners were left to claim computer programs that were implemented on a machine or system, not the actual program itself. (27)

      Claiming programs implemented on machines did not last long. (28) In 1995, the Federal Circuit changed course and determined that computer programs implemented in a tangible medium constituted subject matter that was eligible for patent protection under 35 U.S.C. [section] 101. (29) However, programs embodied as printed matter would not be eligible for patent protection. (30)

      In early 1996, the U.S. Patent and Trademark Office published Examination Guidelines for Computer-Related Inventions (Examination Guidelines) in the Federal Register to inform patent practitioners how office personnel would be examining applications drawn to computer-related inventions. (31) The Examination Guidelines did not constitute rulemaking under the Administrative Procedure Act. These guidelines served as the USPTO's summation of applicable substantive law and how it would be applied to computer-related inventions. (32) It is important to note, the Examination Guidelines stated that claims directed toward methods of doing business (33) should be treated like any other process claims. (34)

      The Federal Circuit addressed the patentability of business method claims in 1998 in State Street Bank & Trust v. Signature Financial Group. (35) In that case, the court found that a software-implemented process for automatically calculating and allocating profits from a mutual fund was eligible for patent protection under 35 U.S.C. [section] 101. (36) In making its finding, the court stated that a machine that transforms data by performing a series of mathematical calculations constitutes an application of an algorithm since it produces "'a useful, concrete, and tangible result.'" (37) This reasoning appeared to do away with the need for the physical structure required by the Freeman-Walter-Abele test. (38)

      The "useful, concrete, and tangible result" test was applied for a number of years, and was made applicable to all process claims in AT&T v. Excel Communications. (39) However, it was not long before this test came under fire from the Supreme Court, (40) and the Federal Circuit backed away from it first in 2007, and then again during a rehearing of the same case in 2009. (41)

      In re Comiskey dealt with the delicate subject of determining when business method claims constituted patentable subject matter. (42) The claims at issue in the Comiskey application were directed toward a method for performing mandatory arbitration involving legal documents. (43) The Federal Circuit's analysis began with recognizing that the claimed process was directed to an abstract idea; specifically, a "method of doing business." (44) The court found that an abstract idea without a practical application is not eligible for patent protection. (45) The Federal Circuit also stated that if the abstract concept has a practical application, the test for determining whether it constitutes patentable subject matter is if it "(1) is tied to a machine or (2) creates or involves a composition of matter or manufacture." (46) Since the inventor admitted that the claims did not require a machine and the claims did not transform matter, the Federal Circuit found the method claims to be unpatentable because the claim limitations could be performed using mental steps. (47)

      The Federal Circuit's conflicting holdings in State Street/AT&T and Comiskey raised two questions. First, whether business method claims were eligible for patent protection under 35 U.S.C. [section] 101? Second, if such claims were patentable, what was the appropriate test for determining whether those claims met the threshold requirement of patentability as defined in 35 U.S.C. [section] 101?

   2. Bilski (48)

      Bilski arrived at the Federal Circuit on...