Recent Cases on Patentable Recent Cases on Patentable Subject MatterSubject Matter

Mojdeh Bahar, J.D., M.A.Mojdeh Bahar, J.D., M.A.Chief, Cancer Branch Chief, Cancer Branch Office of Technology TransferOffice of Technology TransferNational Institutes of HealthNational Institutes of HealthU.S. Department of Health & Human U.S. Department of Health & Human ServicesServicesPLCW & NVPLC MeetingPLCW & NVPLC MeetingOct. 2, 2008Oct. 2, 2008

Curse or Challenge?Curse or Challenge?

““May You Live in Interesting TimesMay You Live in Interesting Times””

Disclaimer: All views or opinions Disclaimer: All views or opinions presented herein are those of the presented herein are those of the presenter and do not reflect the presenter and do not reflect the policy or position of the United States policy or position of the United States Government, the Department of Government, the Department of Health and Human Services, the Health and Human Services, the National Institutes of Health, or the National Institutes of Health, or the Office of Technology Transfer.Office of Technology Transfer.

Origin of the LawOrigin of the Law

Article I section 8 of the ConstitutionArticle I section 8 of the Constitution

““Congress shall have power... to promote the Congress shall have power... to promote the progress of science & the progress of science & the useful artsuseful arts by by securing for limited times to authors and securing for limited times to authors and inventors the exclusive right to their respective inventors the exclusive right to their respective writings and discoveries.writings and discoveries.

Patent Act of 1793Patent Act of 1793

Defined patentable subject matter as “any new Defined patentable subject matter as “any new and and useful artuseful art, machine, manufacture, or , machine, manufacture, or composition of matter, or any new and useful composition of matter, or any new and useful improvement [thereof]”improvement [thereof]”

This Definition remained unchanged until This Definition remained unchanged until 1952.1952.

Patent Act of 1952Patent Act of 1952

Replaced “art” with “process”Replaced “art” with “process” Defined patentable subject matter as “any new Defined patentable subject matter as “any new

and and useful useful processprocess, machine, manufacture, or , machine, manufacture, or composition of matter, or any new and useful composition of matter, or any new and useful improvement [thereof]”improvement [thereof]”

35 USC 10135 USC 101

Inventions patentable-- Whoever invents or Inventions patentable-- Whoever invents or discovers any discovers any new and useful processnew and useful process, , machine, manufacture, or composition of machine, manufacture, or composition of matter, or any new and useful improvement matter, or any new and useful improvement thereof, may obtain a patent therefor, subject thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. to the conditions and requirements of this title.

Case LawCase Law

Cochrane v. Deener, 1877Cochrane v. Deener, 1877• Defined a Process as “a mode of treatment of Defined a Process as “a mode of treatment of

certain certain materialmaterial to produce a given result. It is an to produce a given result. It is an act or a series of acts, performed upon the subject act or a series of acts, performed upon the subject matter to be transformed and reduced to a different matter to be transformed and reduced to a different state or thing”.state or thing”.

• Can be construed as the origin of the Can be construed as the origin of the “transformation” test.“transformation” test.

Some Basic PrinciplesSome Basic Principles

““Everything under the sun made by man” is patentable. However the S. Ct. has Everything under the sun made by man” is patentable. However the S. Ct. has made clear that this statement does not suggest that 101 embraces every discovery made clear that this statement does not suggest that 101 embraces every discovery or that it has no limits.or that it has no limits.

Phenomena of naturePhenomena of nature Mental processesMental processes Abstract intellectual conceptsAbstract intellectual concepts are are not patentable subject matternot patentable subject matter..

This has been consistently reiterated by the Courts, seeThis has been consistently reiterated by the Courts, seee.g., e.g., Diamond v. ChakrabartyDiamond v. Chakrabarty 447 U.S. 303 (1980); 447 U.S. 303 (1980); Diamond v. DiehrDiamond v. Diehr 45 U.S. 175 (1981); 45 U.S. 175 (1981); In re AlappatIn re Alappat 33 F. 33 F. 3d 1526 (Fed. Cir. 1994); 3d 1526 (Fed. Cir. 1994); State Street Bank and Trust Co. v. State Street Bank and Trust Co. v. Signature Trust Fin. GroupSignature Trust Fin. Group 149 F. 3d 1368 (Fed. Cir. 1998); 149 F. 3d 1368 (Fed. Cir. 1998); AT AT & T Corp. v. Excel Communications, Inc.& T Corp. v. Excel Communications, Inc. 172 F. 3d 1352 (1999) 172 F. 3d 1352 (1999)

Business Method PatentsBusiness Method Patents

Cases claiming a method of doing business, E-Cases claiming a method of doing business, E-CommerceCommerce

State Street BankState Street Bank v. Signature Fin. Group, Inc.v. Signature Fin. Group, Inc. stands stands for the proposition that patentability does not turn on for the proposition that patentability does not turn on whether the claimed subject matter does “business” whether the claimed subject matter does “business” instead of something else (149 F. 3d 1368, Fed. Cir instead of something else (149 F. 3d 1368, Fed. Cir 1998)1998)

Provided the Provided the “useful, concrete, and tangible”“useful, concrete, and tangible” test. test. Classification: 705; TC 3600Classification: 705; TC 3600

In re Stephen W. ComiskeyIn re Stephen W. Comiskey

Applicant’s claims were rejected as Applicant’s claims were rejected as obvious over the prior art.obvious over the prior art.

Applicant appealed to the BPAI, and BPAI Applicant appealed to the BPAI, and BPAI affirmed the Examiner’s rejection affirmed the Examiner’s rejection

Applicant appealed to Fed. Cir. Applicant appealed to Fed. Cir. Federal Circuit held that the claims were Federal Circuit held that the claims were

not statutory subject matter and as such not statutory subject matter and as such affirmed-in-part, vacated in part and affirmed-in-part, vacated in part and remanded. (September 20, 2007)remanded. (September 20, 2007)

In re Stephen W. ComiskeyIn re Stephen W. Comiskey

Claim 1 states in full: Claim 1 states in full: A method for mandatory arbitration resolution regarding one or more unilateral A method for mandatory arbitration resolution regarding one or more unilateral documents comprising the steps of: documents comprising the steps of: enrolling a person and one or more unilateral documents associated with the person in enrolling a person and one or more unilateral documents associated with the person in a mandatory arbitration system at a time prior to or as of the time of creation of ora mandatory arbitration system at a time prior to or as of the time of creation of orexecution of the one or more unilateral documents; execution of the one or more unilateral documents; incorporating arbitration language, that is specific to the enrolled person, in the incorporating arbitration language, that is specific to the enrolled person, in the previously enrolled unilateral document wherein the arbitration language provides that previously enrolled unilateral document wherein the arbitration language provides that any contested issue related to the unilateral document must be presented to the any contested issue related to the unilateral document must be presented to the mandatory arbitration system, in which the person and the one or more unilateral mandatory arbitration system, in which the person and the one or more unilateral documents are enrolled, for binding arbitration wherein the contested issue comprises documents are enrolled, for binding arbitration wherein the contested issue comprises one or more of a challenge to the documents, interpretation of the documents, one or more of a challenge to the documents, interpretation of the documents, interpretation or application of terms of the documents and execution of the documents interpretation or application of terms of the documents and execution of the documents or terms of the documents; or terms of the documents; requiring a complainant to submit a request for arbitration resolution to the mandatory arbitrationrequiring a complainant to submit a request for arbitration resolution to the mandatory arbitrationsystem wherein the request is directed to the contested issue related to the system wherein the request is directed to the contested issue related to the unilateral document containing the arbitration language; unilateral document containing the arbitration language; conducting arbitration resolution for the contested issue related to the unilateral conducting arbitration resolution for the contested issue related to the unilateral document in response to the request for arbitration resolution; document in response to the request for arbitration resolution; providing support to the arbitration resolution; and determining an award or a decision for theproviding support to the arbitration resolution; and determining an award or a decision for thecontested issue related to the unilateral contested issue related to the unilateral document in accordance with the incorporated arbitration language, wherein the award document in accordance with the incorporated arbitration language, wherein the award or the decision is final and binding with respect to the complainantor the decision is final and binding with respect to the complainant

In re Stephen W. ComiskeyIn re Stephen W. Comiskey

• Claims drawn to a method of mandatory arbitration for Claims drawn to a method of mandatory arbitration for unilateral and contractual documentsunilateral and contractual documents

• Fed. Cir. raised the 101 issue Fed. Cir. raised the 101 issue sua spontesua sponte

• Fed. Cir. held that the claims are drawn to a mental processFed. Cir. held that the claims are drawn to a mental process

• Fed. Cir. held that the claims depend for their operation on Fed. Cir. held that the claims depend for their operation on human intelligence alone; in other words, the application of human intelligence alone; in other words, the application of human intelligence to the solution of practical problems in human intelligence to the solution of practical problems in not in and of itself patentable.not in and of itself patentable.

In re Bilski (Fed. Cir. 2008)In re Bilski (Fed. Cir. 2008)

Claims were rejected under 35 USC 101 by the Claims were rejected under 35 USC 101 by the ExaminerExaminer

BPAI affirmed the rejection, but questioned and BPAI affirmed the rejection, but questioned and analyzed the basis of the Examiner’s reasoning and analyzed the basis of the Examiner’s reasoning and use of case lawuse of case law

On Feb. 15, 2008 CAFC issued an order granting On Feb. 15, 2008 CAFC issued an order granting rehearingrehearing

35 amicus briefs were submitted 35 amicus briefs were submitted Case was heard by the Fed. Cir on May 8, 2008Case was heard by the Fed. Cir on May 8, 2008 The Opinion has not yet been rendered The Opinion has not yet been rendered

In re Bilski…cont’dIn re Bilski…cont’d

A method for managing the consumption risk costs of A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price a commodity sold by a commodity provider at a fixed price comprising the steps of: comprising the steps of: (a) initiating a series of transactions between said (a) initiating a series of transactions between said commodity provider and consumers of said commodity commodity provider and consumers of said commodity wherein said consumers purchase said commodity at wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of fixed rate corresponding to a risk position of said consumer; said consumer; (b) identifying market participants for said commodity (b) identifying market participants for said commodity having a counter-risk position to said consumers; having a counter-risk position to said consumers; and and (c) initiating a series of transactions between said (c) initiating a series of transactions between said commodity provider and said market participants at commodity provider and said market participants at a second fixed rate such that said series of a second fixed rate such that said series of market participant transactions balances the risk market participant transactions balances the risk position of said series of consumer transactions. position of said series of consumer transactions.

In re Bilski…cont’dIn re Bilski…cont’d

• Claims drawn to a method of managing the risk of bad Claims drawn to a method of managing the risk of bad whether through commodities tradingwhether through commodities trading

• In its analysis BPAI held that the recited steps do not In its analysis BPAI held that the recited steps do not transform any physical subject matter into a different state transform any physical subject matter into a different state or thing, i.e., the claims fail the “transformation” test.or thing, i.e., the claims fail the “transformation” test.

• BPAI further stated that the claims are “abstract ideas”, and BPAI further stated that the claims are “abstract ideas”, and as such non-statutory subject matter.as such non-statutory subject matter.

• BPAI further stated that the claims do not recite a BPAI further stated that the claims do not recite a “practical application” or a “concrete and tangible result” “practical application” or a “concrete and tangible result” under State Street, and as such are non-statutory subject under State Street, and as such are non-statutory subject matter.matter.

BPAI’s DecisionBPAI’s Decision

• BPAI turned to USPTO’s Intrim Guidelines on BPAI turned to USPTO’s Intrim Guidelines on 101 analysis, and yet again stated that the claims 101 analysis, and yet again stated that the claims were non-statutory subject matter.were non-statutory subject matter.

• BPAI rejected all of the appellants’ argument BPAI rejected all of the appellants’ argument regarding patentability.regarding patentability.

• BPAI emphasized that State Street and AT&T are BPAI emphasized that State Street and AT&T are not entirely applicable to the case at hand because not entirely applicable to the case at hand because unlike these cases, the instant case is based on unlike these cases, the instant case is based on “non-machine implemented” methods.“non-machine implemented” methods.

BPAI”s RecommendationsBPAI”s Recommendations

It would be more convenient if USPTO did not It would be more convenient if USPTO did not have to examine cases for 101 issues.have to examine cases for 101 issues.

Claims reading on both statutory an non-Claims reading on both statutory an non-statutory subject matters should be rejected statutory subject matters should be rejected under 101!under 101!

BPAI has asked CAFC for guidance on 101 BPAI has asked CAFC for guidance on 101 issues (not limited to this case)issues (not limited to this case)

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QuestionsQuestions