Patentable Subject Matter35 USC §101

Kristine H. JohnsonMacMillan Sobanski & Todd, LLC

johnson@mstfirm.com

What Can Be Patented?

35 U.S.C. §101: Inventions Patentable

new and useful

“whoever invents or discovers any

process, machine, manufacture or composition of matter,

or any new and useful improvements thereof,

may obtain a patent.”

What Can Be Patented?• Process: One or more steps performed on a

material, a composition, or an article to produce a change in its nature or characteristics

• Machine: Various mechanical devices; group of elements or parts that interact to produce an intended effect or result

• Manufacture: An article of manufacture. Includes practically anything made by humans

• Composition of Matter: Either a chemical compound or a mixture of ingredients, such as a formulation

Some Examples

• Process– Methods of making a stuffed crust pizza– “One-click” method

• Machine– Internal combustion machine

• Composition of Matter– Gadgets, Devices– Chemical Compositions– Genes, genetically engineered animals

• Manufacture– “Catch all”

• “Anything under the sun that is made by man”

Non-Patentable Subject MatterLaws of Nature and Scientific Principles

Discovery of new principle, force or law of operating on matter

However, their application usually is patentable

Abstract Ideas or Theories

Policy Behind Utility Requirement

• Dangers of overly broad or imprecisely defined claims

• Without a specific and substantial utility, there is no reason to grant a patent

• “A patent is not a hunting license. It is not a reward for the search, but compensation for its successful conclusion” (Brenner v. Mason)

The Utility Standard

• An invention has utility if– a person of ordinary skill in the art would immediately

appreciate why the invention is useful based on the characteristics of the invention, and

– the utility is specific, substantial, and credible.

• Requires specific and substantial utility

– This requirement excludes "throw-away," "insubstantial," or "nonspecific" utilities

– need only provide one credible assertion of specific and substantial utility for each claimed invention to satisfy the utility requirement.

Abstract Idea v. Applied Idea

• State Street Bank Case (but see, Bilski)– A process, machine, manufacture, or composition of matter

employing a law of nature, natural phenomenon, or abstract idea may be patentable subject matter even though a law of nature, natural phenomenon, or

abstract idea would not, by itself, be entitled to such protection.

• In re Alappat– When an abstract idea is reduced to a practical application,

the abstract idea no longer stands alone if…the practical application of the abstract idea produces a useful, concrete and tangible result (In re Alappat)

“Utility” is ordinarily easy to assert

• Utility need not be expressly recited in claims, it may be inferred

• If the utility is not asserted in the written

description, then it must be well established

• A specific, substantial, and credible utility must be accomplished

• But, Examiners sometimes think they work at the US Food & Drug Administration

Hand-waving not acceptable to prove utility

• Brenner v. Manson– Claim

• “Novel process for making certain known steroids…..”– Disclosure

• “The products of the process….have a useful, high anabolic androgenic ratio” and are useful for increasing the ratio.

– Holding• Rejected argument that prior art established utility by reporting

that a homologue adjacent to the steroid produced by the claimed process had a tumor-inhibiting effect in mice.

– Laid the foundation for the utility requirement as applied to pharmaceutical inventions

Sufficient Utility

• Nelson v. Bowler– Showed practical utility by establishing a

correlation between test results and pharmacological activities

• Cross v. Iizuka– Satisfied practical utility requirement by disclosing

an in vitro utility that was “supplemented by the similar in vitro and in vivo pharmacological activity of structurally similar compounds

Sufficient Utility

• In re Brana– Claimed compounds “exhibited significant

antitumor activity against the L1210 standard tumor model in vivo” was sufficient to satisfy practical utility requirement

• Fujikawa v. Wattanasin– Implied “that compounds which are active in vitro

will normally exhibit some in vivo activity” supports Board finding that “in vitro tests established a practical utility”

Insufficient Utility

• In re Kirk– A compound cannot “be presumed” to be useful

“simply because it is closely related…to other steroid compounds known to be useful”

• Kawai v. Metlesics– Prior art showing similar compounds having anti-

convulsant activity held by court as insufficient to satisfy how to use requirement

U.S. Supreme Court 35 USC §101

Bilski v. Kappos, No. 08-964, 561 U.S. ___ (2010)

Bilski - Procedural History

• Bilski filed a patent application directed to a method of hedging risk in the field of commodities trading seeking patent protection under a business methods patent.

• USPTO examiner rejected the claims based on ineligible subject matter.

• Board of Patent Appeals and Interferences upheld the determination of the examiner.

• Federal Circuit affirmed the decision of the BPAI.

• Federal Circuit further concluded that the Machine-or-Transformation test was the exclusive test for §101 patentability.

Bilski Ruling of the Supreme Court

• Bilski’s claims directed to a method of managing risk in connection with commodity hedging is not eligible for patenting under §101 (9 Justices concurred)

• Machine and Transformation test was not intended to be the sole test for patentability under §101 (9 Justices concurred)

• Business methods are simply one kind of method that is at least in some circumstances eligible for patenting under §101 (5 Justices concurred)

Bilski - Majority Opinion

• Justice Kennedy wrote the opinion of the Court which was joined by Roberts, Thomas, Alito, and Scalia

• The Court found that Bilski’s claims were related to an abstract idea, not a process

• The Court re-emphasized the §101 categories of inventions: (1) processes, (2) machines, (3) manufactures, and (4) compositions of matter

• Court cited Diamond v Chakrabarty stating that “Congress plainly contemplated that the patent laws would be given wide scope” including eligibility under §101

• Three specific exceptions to §101 elegibility: “laws of nature, physical phenomena, and abstract ideas”

• §101 is only a threshold test and that claims must also satisty the requirements of §102 (novelty), §103 (nonobviousness), and §112 (full description)

Bilski “Machine or Transformation” Test

• The Court then focused on two categorical limitations for process patents: (1) Machine-or-Translation test, and (2) exclusion of business method patents

• Machine-or-Transformation test rejected as the sole test for method claims

• Machine-or-Transformation test as the sole test for what constitutes a process violates the statutory interpretation principles

• Cochrane v Deener (1877) described a process in similar terms as the Machine-or-Transformation, the Court viewed this as a mere dictum; recent cases have rejected the broad implications of this description (See Benson, Flook, and Diehr)

• Machine-or-Transformation test is not an exclusive/sole test but rather a useful and important clue for determining whether some claimed inventions are processes under §101.

• Court also looked to earlier eras specifically, the Industrial Age v Information Age (software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and manipulation of digital signals)

Bilski “Machine-or-Transformation” Test

• The court noted that it was once forcefully argued that until recent times, well established principles of patent law would probably have prevented the issuance of a valid patent on almost any conceivable computer program

• The Machine-or-Transformation test may well provide a sufficient basis for evaluating processes similar to those in the Industrial Age (i.e., in a physical or tangible form), but there are reasons to doubt whether the test should be the sole criterion for determining patentability of inventions in the Information Age

• Machine-or-Transformation test would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and manipulation of digital signals

• Court emphasized that they are not commenting on patentability of any particular invention, let alone holding that any of the above-mentioned technologies from the Information Age should or should not receive patent protection

Bilski on Business Methods

• §101 precludes the broad contention that the term “process” categorically excludes business methods

• Court found nothing supporting this preclusion as a matter of textual interpretation

• The term “method” which is within §100(b)’s definition of “process” may include at least some methods of doing business

• Patent Act leaves open the possibility that there are at least some processes that can be fairly described as business methods that are within the patentable subject matter of §101

• Under the 1999 addition of statutory defense to infringement in §273, federal law explicitly contemplates the existence of at least some business method patents

• A business method that fits into the statutory definition of a “process” must still satisfy §102, §103, and §112 requirements

Bilski – Justice Kennedy’s Opinion

• Industrial Age v Information Age

• Kennedy suggested that a categorical approach to ineligibility might succeed by “defining a narrower category or class of patent applications that claim to instruct how business should be conducted”

Bilski – Justice Stevens’ Opinion

• Concurred that machine-or-transformation test is not the exclusive test for finding a process claim patentable

• Business methods should not be patentable subject matter under §101

• Backed his opinion with English law and 18th century US law

Bilski - Justice Breyer’s Opinion

• Concurred with Justice Stevens regarding business methods

• Text, history, and purposes of the Patent Act make clear they are not patentable subject matter

• Federal Circuit erred in treating the Machine-or-Transformation test as the exclusive test

• A “useful, concrete, and tangible result” has never been endorsed by the court as a test for §101 “for method claims” (State Street Bank & Trust Co).

Bilski - USPTO Memo to Examiners

• Examiners should continue to examine patent applications using the Machine-or-Transformation test as a tool for determining whether the claimed invention is a process under §101

• If a claimed method meets the Machine-or-Transformation test, the method is likely patent eligible under §101 unless there is a clear indication that the method is directed to an abstract idea

• If a claimed method does not meet the Machine-or-Transformation test, the examiner should reject the claim under §101 unless there is a clear indication that the method is not directed to an abstract idea

• If a claim is rejected under section §101 on the basis that it is drawn to an abstract idea, the applicant then has to the opportunity to explain why the claimed method is not drawn to an abstract idea

Time for Questions

Please ask!

Thank you to Ms. Jenna Cogswell at MST who helped prepare these slides!

Contact us at johnson@mstfirm.com or 419.255.5900 for permission to use these slides, or to ask questions. We are happy to let others use these slides, but we would like to know who they helped.