Workable solutions to the challenges of patenting an innovative process.

• Author: Hopkins, Jamie
• Position: IV. The Future of Process Patents C. Assessing the Testing Options for Process Patent Claims through VI. Conclusion: Workable Solutions, with footnotes, p. 343-369

3. Assessing the Testing Options for Process Patent Claims

   Although the Patent Law Act has never created a definitive test for determining whether an invention qualifies as a patentable process, over the years the courts have attempted to fill this void with various tests. (167) These tests include the "Freeman-Walter-Abele" test, (168) "useful, concrete and tangible result" test, "machine-or-transformation" test, and the "technological arts" test. (169) While each test provides certain insights into the patentability of a process claim, no single test has "fully and accurately embodied the legislative intent and constitutional mandate." (170) In addition, all judicially created tests have resulted in inconsistent results when applied to diverse and changing technologies. (171) Ultimately, there is no statutorily mandated test for determining the patentability of process patent claims. (172)

   Chumney, Baumer, and Sawyers argue that case law has gone too far in protecting business process patent claims, especially in the area of tax planning patents. (173) They state that of the sixty-two tax-related patents, tax issues are secondary in over half of them. (174) Tax process patents have also drawn strong criticisms from some professional groups, including the American Institute of Certified Public Accountants (AICPA), that have publicly opposed the patenting of tax method strategies. (175) These groups argue that tax strategy patents ("TSPs") "preempt Congress's legislative control over tax policy and deny taxpayers equal and unfettered access to the provisions of the Internal Revenue Code and its interpretations." (176) "They also argue that TSPs make it difficult for tax advisors to render advice to clients, potentially increase the costs of tax advice to clients, and may mislead tax-payers into thinking that a patented tax strategy is valid in the eyes of the IRS." (177)

   The Supreme Court in Bilski II ruled that business processes are patentable. (178) However, the extent to which business process patents are and should be patentable is unclear. (179) Consequently, tests for determining patent eligibility of process claims remain unsettled. (180) While the USTPO and most courts have continued to rely on the MOT test, the Supreme Court specifically held that this is not the sole controlling test. (181) Furthermore, the Supreme Court declined to illuminate any other tests or criteria for determining the patentability of a process claim. (182)

   Despite the prevalent use of the MOT test, it has detractors. (183) The MOT test has been criticized as ineffective, restrictive, and entirely judicially created without any statutory connection. (184) Specifically, the MOT test is criticized as too rigid when applied to life science process claims, especially those pertaining to issues involving diagnostic and screening methods, where the courts should apply the Fundamental Principles Exception as set forth by the Supreme Court. (185) The Fundamental Principles Exception states that a process is not patentable subject matter under 35 U.S.C. [section] 101 if it is an attempt to patent natural laws, natural phenomenon, abstract ideas, or mental processes. (186) The "operative question under the Fundamental Principles Exception is whether the claim defines an application of the principle with sufficient particularity so as not to preempt all uses and implementations of the principle." (187) The Fundamental Principles Exception would encourage innovation through patents while protecting fundamental principles for use by everyone. (188)

   Business processes are far more problematic than traditional patents for machines, drugs, and tangible objects. (189) Process patents are often abstract, overly broad, and difficult to locate because they can apply across a wide range of industries. For example, a patent on managing inventories could apply to many different industries and companies. (190) Business method patents may be dangerous because patent infringement may be innocent and done without knowledge of the patent. (191) The uncertainty surrounding the "scope and validity" of business method patents may also stunt innovation in new technologies. (192) McJohn proposes that Courts use the MOT test loosely in order to deal with changing technologies and patent processes because it provides a useful tool for courts to implement key patent law policies, without preempting fundamental principles. (193)

   However, the strict reliance on the MOT test illustrates that patent law has failed to produce a "viable standard for adaptation to relevant technological changes." (194) As new inventions are created, there are new subject matter patent claims. (195) A reliance on the rigid MOT test will continue to define these new inventions by old standards and terms and forces all process claims to one small subset of technology. (196) Instead, patent law should adopt a more flexible and adaptive stance toward patentable subject matter. (197)

   The judicial approach to business process patent claims and the MOT test have been criticized as too rigid and formulaic. (198) Cotter argues that with respect to patentable subject matter, the risk is that courts and other policymakers will settle on formalistic approaches that blindly adhere to the form of traditional doctrines while ignoring those doctrines' underlying rationales. (199) He states that patent eligibility should reflect the wisdom embodied in patent law traditions while being flexible enough to accommodate new innovative technologies and advances in technology. (200) Cotter proposes three screening tests that would help determine patent eligibility. (201) The three proposed screens are Technological Arts, Noninvasiveness, and Minimal Physicality, and they are argued to be based on long standing legal policies surrounding patent eligibility. (202) These screens would invalidate purely intangible process patent claims. (203) However, the screens would not disqualify patents on claims that are tied to a machine or apparatus (for example a general computer). (204)

   Under the Technological Arts screen, a "claimed invention must in some meaningful sense (1) harness the forces of nature (2) in some stable, predictable, and reproducible manner (3) to achieve a practical end result." (205) These requirements would preclude attempts to patent laws of nature, natural phenomena, abstract ideas, and aesthetic creations." (206) This patent eligibility screen would further patent law standards such as "utility, inherency, non-obviousness, claim definiteness, and enablement." (207)

   The Noninvasiveness screen which would not allow an invention to be patent eligible if its "enforcement would unduly interfere with fundamental liberty interests or with the domain of copyright law." (208) Cotter acknowledges this test would be a controversial screen because it addresses only a few of the problems associated with granting wide ranging patents, and because defining the word "invention" could be problematic. (209)

   The Minimal Physicality screen would require that a process method claim either "(1) effect a physical transformation, external to the human actor, of matter or energy from one state to another, or (2) be tied to some tangible thing (but not necessarily a "particular machine")." (210) The Minimal Physicality screen test is in essence a more flexible version of the MOT test. (211) This screen would not invalidate any process patent claim that would have traditionally passed the MOT test. (212) However, it would not open the flood gates to all process claims. (213) Instead, the Minimal Physicality screen test would require that a patentable process transform something from one state to another or be tied to a tangible thing. (214) Its adoption would redefine 'machine' and 'transformation' in broader terms to expand the scope of the MOT test. (215) However, this screen would still provide limitations on process claims and would not allow the patentability of mere abstract ideas. (216) At the same time, the Minimal Physicality screen would be more consistent with the general U.S. patent history of recognizing a wide range of patent eligible subject matter. (217)

4. How Applicable is the Useful, Concrete, and Tangible Results Test?

   Besides the MOT test, the only test recently used by courts to determine the patent eligibility of a process claim was the useful, concrete, and tangible test employed in State Street. (218) In State Street, the court stated that an invention that represented nothing more than an abstract idea was not patentable. (219) However, if that abstract idea was reduced to an application or process that produced a useful, concrete, and tangible result, the invention could be patentable. (220) The court stated that the focus should not be on whether or not an invention was a process, machine, or composition of matter but rather on the invention's practical utility. (221)

   Judge Rader's dissent in Bilski I commented on the "useful, concrete, and tangible test" in light of Metabolite Labs. v. Lab. Corp., a case where the United States Court of Appeals for the Federal Circuit upheld a jury finding that LabCorp infringed on Metabolite's patent. (222) The patent infringed upon was a method for detecting B12 and folic acid deficiencies in humans by "assaying a body fluid for an elevated level of total homocysteine; and correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate." (223) The Supreme Court granted the case a writ of certiorari and then dismissed it as improvidently granted. (224) However, Justices Breyer, Stevens, and Souter joined in a dissent stating that the Supreme Court should have determined whether or not the patent claim was an invalid attempt to create a monopoly over a basic scientific relationship. (225)

   The dissent stated that allowing patents for fundamental scientific principles would "severely interfere with...