Source: https://elman.com/bilskireport-elman-smith/
Timestamp: 2019-04-21 18:45:26+00:00

Document:
What Kinds of Inventive Processes Are Patentable?
by Gerry J. Elman and Jerome R. Smith, Jr.
On June 28, 2010, the U.S. Supreme Court issued its long-awaited decision in Bilski v. Kappos. The case was expected to resolve the hotly contested question of whether business methods could be protected by the claims of a U.S. patent, and there was some trepidation that the decision might adversely impact at least some patents for computer software as well. Because the majority of the Court rested their decision on narrow grounds, they left intact much of the body of case law on patent eligibility, though hitting reset by disavowing a legal test known for short as machine-or-transformation. Many unresolved issues live on, to be addressed another day.
In a decision written by Justice Kennedy, the Court voted unanimously to affirm the en banc judgment by the U.S. Court of Appeals for the Federal Circuit (“CAFC”) that the claims of Bilski and Warsaw’s patent application are not patent-eligible under 35 USC § 101. The majority opinion rests this affirmance on narrow grounds. Yet a minority of three other Justices joined a separate opinion by retiring Justice Stevens that decries the patentability of “business methods” in general, recognizing that significant factions disfavor such protection.
By this decision, issued on the last opinion day of the Supreme Court’s 2009-2010 term, thus concluded the saga of the most closely-watched patent appeal in history.
The Legal Framework – We start by pointing to the provision in the U.S. Constitution (Article 1, section 8, clause 8 ) that grants Congress the power: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” In exercise of that power, Congress has enacted laws providing for copyrights and patents.
The patent statute, Title 35 of the United States Code [“35 U.S.C.”], provides that “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. § 101. Some of the conditions stated in 35 U.S.C. are that the claimed invention be novel (as compared to the “prior art,” generally the information publicly available at the time the invention was made) and that it not have been obvious at that time to a person having ordinary skill in the art. The statute also requires that the applicant disclose the subject matter clearly and completely enough to enable the invention to be made and used by others.
The owner of a patent has the exclusive right to make, use, sell or import the invention as defined by any of its valid claims. The patent’s term is 20 years from the date the first regular patent application disclosing the invention was filed, subject to adjustment in certain situations and to the payment of a maintenance fee every few years.
If an applicant believes that a rejection by a Patent Examiner was improper, he may appeal within the Patent and Trademark Office (“USPTO”) to the Board of Appeals and Interferences (“Board”). Failing to obtain satisfaction there, such an applicant may appeal to the CAFC. Most appeals end there, but a still-dissatisfied applicant might also seek a further appeal to the Supreme Court, and sometimes, as in Bilski, the Supreme Court chooses to accept the case.
Background – Before 1998, it had been unclear whether an inventive process reciting a method of doing business could be the subject of a patent claim. But that year the CAFC decided in State Street Bank v. Signature Financial Group that a claim to an apparatus that implements a business method is not for that reason unpatentable. News of the State Street Bank decision led some to find opportunity to obtain protection for inventive business methods hitherto considered outside the scope of patenting. Others were shocked to find that the kinds of things they were doing in their offices might infringe a patent granted to another company.
Appeal to the Supreme Court – After an oral argument November 9, 2009, the Supreme Court waited almost eight months to issue the Bilski decision. There is speculation that the opinion had originally been assigned to retiring Justice Stevens, but that the condemnation of business method patents included in the opinion he wrote led to the majority opinion being reassigned to centrist Justice Kennedy.
Justice Kennedy’s opinion of the Court pretty much follows the pattern suggested by CAFC Judge Rader’s dissent (and the Government’s brief). Bilski’s claims were held unpatentable, as they were drawn to an “abstract idea,” which, like laws of nature and physical phenomena, was previously recognized by the Supreme Court as being outside of statutory subject matter under 35 USC § 101.
We read this as a sort of “safe harbor,” meaning that a claim that satisfies the machine-or-transformation test is almost certainly patent-eligible, but that if a claim doesn’t meet that test, it isn’t automatically unpatentable for not reciting statutory subject matter.
What does this mean for computerized methods and software? This subject matter remains patentable, provided it does not fall within any of the exceptions to statutory subject matter for processes, e.g., laws of nature, physical phenomena, and abstract ideas. However, further examples of these exceptions were left open for the CAFC to determine in future decisions.
What about computerized components and systems? These components and systems remain patentable as apparatus, as has always been the case under the patent law.
What about business methods? Business methods are not excluded as a class from patent-eligible subject matter. However, this opinion doesn’t give additional guidance about how to meet the requirement for claiming statutory subject matter, beyond reciting the aforementioned exceptions (e.g., laws of nature, physical phenomena, and abstract ideas).
What about medical diagnostic methods? On June 29th, the Supreme Court issued a GVR in the cases of Mayo v. Prometheus Labs and Classen Immunotherapies v. Biogen IDEC. This means that they granted certiorari to accept the appeals from the CAFC, then vacated the CAFC’s decisions and remanded the cases for further consideration in light of the Supreme Coourt’s Bilski decision. The CAFC will soon have the opportunity to address whether a patent may validly claim a process that involves injecting a subject with a drug or immunogen and then comparing certain results. Because real substances move in the world, the claims in Prometheus Labs appear to meet the transformation prong of the machine-or-transformation test. So it seems likely that the CAFC will continue to find statutory subject matter in these claims. The opposite result was obtained in the Classen case. Let’s see what happens when the CAFC catches the baton and runs with it. Stay tuned.
What about other methods? Methods that are determined to fall outside the aforementioned exceptions to statutory subject matter remain proper subject matter for U.S. patents.
The U.S. Department of Justice filed an amicus brief yesterday stating that isolated genetic sequences should no longer be considered to be patent-eligible. Stay tuned.
WASHINGTON, DC October 29, 2010 – The U.S. Department of Justice has filed an amicus brief in the Court of Appeals for the Federal Circuit. Noting that its position contradicts prior caselaw, the brief says that isolated genetic sequences aren’t patent-eligible because they haven’t been materially altered from products of nature. Stay tuned.
The U.S. Patent and Trademark Office issued on July 27, 2010, a new guidance to patent examiners for determining when a proposed claim to a invented process is patent-ineligible as reciting a mere abstract idea, per the Supreme Court decision of June 28 in Bilski v. Kappos. The PTO invites comment from the public as to its proposed interpretation of patent law.

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