Source: https://patentlyo.com/jobs/2010/06/guest-post-on-bilski-throwing-back-the-gauntlet.html
Timestamp: 2019-04-21 16:59:19+00:00

Document:
A year and a half ago, the Federal Circuit threw down a gauntlet in its Bilski opinion, extensively citing Supreme Court precedent to come up with the “machine or transformation test” to determine when a process constitutes patentable subject matter. Now the Supreme Court has rejected the Federal Circuit’s conclusion that “machine or transformation” is the only test to use and provided an additional basis for why Bilski’s patent for a method of hedging risk is not patentable. In doing so, the Supreme Court has thrown back the gauntlet, leaving scholars and the Patent Bar to speculate on where the USPTO and the Federal Circuit might go with using patentable subject matter as a limit on patentability. When the smoke clears, the Bilski opinion will appear a lot like the KSR decision from 2007 and that should not be surprising since Justice Kennedy authored both.
Here are the highlights of Bilski v. Kappos.Justice Kennedy‘s opinion of the court unanimously affirmed the Federal Circuit’s ruling that Bilski’s patent should be rejected. Where the nine justices agree is that the Federal Circuit erred in distilling from precedents the “machine or transformation” test as the sole one to determine when a process is patentable subject matter. The Court based this ruling on the definition of process in Section 100 of the Patent Act and its own precedents (from the 1970’s and 1981) in Gottschalk v Benson, Parker v Flook, and Diamond v Diehr. There also was agreement that patentable subject matter is broad with limits that are finite and discernible, rather than open ended. One of these limits is no patents for abstract ideas, and there is unanimity that Bilski’s claims for methods of hedging were too abstract, describing a general process well established in the field. In short, there was unanimity in rejecting the “machine or transformation” test as the sole test for identifying a patentable process and affirming the well known exceptions from patentable subject matter: laws of nature, physical phenomenon, and abstract ideas.
In terms of method, Bilski v. Kappos reminds me of the Canadian Supreme Court’s 2002 decision in Harvard College v. Canada (Commissioner of Patents), which rejected a patent on a multicellular living organism. Both decisions relied heavily on a strict reading of the statute with the Canadian Supreme Court ruling that the word “invention” in the Canadian patent statute did not include living organisms. The Canadian Supreme Court decision, however, seemed to be sending a clear message to the Canadian Parliament to amend the statute if necessary. By contrast, it is not clear what the U.S. Supreme Court’s message is in Bilski. The opinion was a response to the Federal Circuit’s mischaracterization of Supreme Court precedent as a “machine or transformation” test. But at a deeper level, one is left wondering what guidance the Supreme Court is providing for practitioners, scholars, and policymakers. The Court throws the gauntlet back to the Federal Circuit, and presumably they will now take the new precedent and use it to mold patent practice.
The lack of clarity is reflected in part in the Justice Breyer concurrence, joined by Justice Scalia, providing four guiding principles for how to determine whether a process is patentable subject matter. The four principles are: (i) there are limits on patentable subject matter; (ii) transformation is an important “clue” to when a process is patentable subject matter: (iii) machine or transformation is not the sole test for determining when a process is patentable subject matter; and (iv) the “useful, concrete, tangible” test does not describe the full scope of what constitutes patentable subject matter. These four distill down to the principle that limits on patentable subject matter have something to do with transformation to a physical state, but that usefulness, concreteness, and tangibility do not describe the extent of patentable subject matter. Justice Breyer’s principles imply that there are limitations on “dubious” patents, such as those for “exercising a cat with a laser pointer” that have nothing to do with machine or transformation. The problem is we have no sense of what those additional limitations are.
Undoubtedly, more litigation is on the way, and perhaps the Court will hear another case involving either a medical diagnostic patent or a “dubious” patent. But the Bilski case will have immediate impact on how patents are prosecuted. After the Supreme Court’s 2007 KSR decision, patent examiners latched onto the Supreme Court’s language about “common sense” to issue obviousness rejections because a claimed combination was deemed “common sensical.” We can predict similar responses post-Bilski. The Court did not kill machine or transformation; it is now just one test. Patent examiners can still use the test as a basis for rejection. In addition, the Court’s emphasis on abstract ideas creates another basis for rejecting patents for lack of patentable subject matter.
Specifically, the Court has now revived the Gottschalk-Parker-Diehr line of cases, which were established before the creation of the Federal Circuit and which the Federal Circuit had distilled over time into the expansive “useful-concrete-tangible” approach to patentable subject matter and then into the “machine or transformation test.” In effect, the Supreme Court by reviving its precedent has negated over twenty-five years of the Federal Circuit’s attempts at doctrine. This revival opens up possibilities for examiners to rethink the relationships among process, machine, and the physical world. “Dubious” patents may be rejected because the physical phenomenon is trivial or too preemptive of the field. Patent claims might require closer connection to a machine embodiment as opposed to an abstracted, disembodied form. An interesting question to ask is whether the patent at issue in State Street would survive the analysis proposed by Bilski. On the one hand, the asset allocation method at issue is arguably as abstract as the hedging method. On the other hand, the method seems closely tied to a machine to give the process some specific limits.
Ultimately, Bilski v Kappos says more about how patent law is made in the United States than about patentable subject matter. By setting the clock back to 1982, the Supreme Court is telling the Federal Circuit to try again in devising workable rules for patent law. The Federal Circuit wrote an opinion that was goading the Supreme Court to address the issue of patentable subject matter after nearly three decades. The resulting opinion raises some fundamental and unsettled questions and, unfortunately, gives us the same, old answers.
You may call it “throwing back the gauntlet” – I call it “passing the buck.” I agree that it’s hard to feel as if one has taken away anything from the Bilski decision. At least it made some patent law practitioners happy.
In Justice Stevens’ §101 test, any mathematical calculation or algorithm, not only principles, would be assumed as –OLD– (not “new”).
discovered, without any inventive efforts.
Supreme Court appears to have struggled with that question.
discovery is in fact novel — the §102 issue.
matter … may in fact be novel.
directly adapts a newly discovered principle without any inventive effort.
well-known process would be insignificant post-solution activities.
for a curing process in Diehr would also be assumed as well-known.
a method of converting signals from binary coded decimal form into binary.
decimal form and binary form.
a way to convert from one to the other.
have always been there, whether Benson discovered or not.
correlations simply because he is the first to discover them.
to determine the variables. See, Flook; Diehr (esp.
400(1-0.8)+425(0.8) and then using the result to set the alarm limit.
Stewart wrote the opinion for the majority in Diehr.
case, refined their dissent theory in Flook.
temperature inside a rubber molding press.
a created blueprint to be adapted in the curing process.
cure time and end point for press closure.
dependent upon the geometry of the particular mold of the press.
Flook, teaches how to determine those variables.
industrial process. The method used to adapt to that process (e.g.
measurements of the batch) is not a principle. It is a created blueprint.
C, as “old” in applying its rationale.
As I said before, ping, and as you continue to ignore, it is easy to hide behind anonymity so a client or an employer cannot see how you replace any intelligent legal analysis with name calling and slurs.
My idol is 100% correct.
The key is to know which side is playing the fool.
@IANAE: You are correct. The majority of comments I have received both off-line and here have been positive, providing me with constructive criticism as I try to sort out the implications of Bilski along with the rest of us. If ping has an issue with me, I do encourage him or her to contact me via email.
Ping, if you have the courage to not hide behind anonymity, you can email me separately to have this out.
With all due respect, I think you might care to temper your expectations of civilized academic discourse when guest-posting on an essentially unmoderated blog that encourages anonymous and pseudonymous comments.
The thing about arguing with fools is that they drag you down to their level, and then beat you with experience.
Wow, ping. If you are going to call someone incompetent, why don’t you have the intelligence to not hide behind anonymity? What are you hiding? Worried a client or an employer might find out about you. I know Hal Wegner, and he has more professionalism than someone like you has shown. As for rolling back 30 years of jurisprudence, I didn’t write Bilski. My sense still is that it is an open field with the Court’s opinion leaning towards broad patentable subject matter but with avenues for the USPTO and the Federal Circuit to go off on its own track.
I would expect the Court to interpret what a process is and what a process is not, because that is what the statute provides. They have done so here (abstract ideas are not processes, for purposes of 101).
I worry when we expect our courts to make policy decisions, such as where to “strike the balance” between inventor protection vs. unfair monopoly. Our courts indulge in policy-making far too much as it is. That’s my point here.
Going beyond that in “striking the balance”, is not the Court’s task, because the statute doesn’t indicate that any other such balance ought to be struck.
On the contrary. Striking the balance is the court’s task, precisely because the statute provides no guidance. Once the court hears a case that is near the boundary, it will have no choice but to strike that balance. Would you expect the court to dismiss that case because it’s up to Congress to decide?
Striking the balance in Bilski was not the court’s job, because Bilski was so far from the balancing point that the question was not properly before the court. But once the time comes to strike that balance, that responsibility can only fall to the courts.
And I’m saying they did. The Court held (again) that abstract ideas are not processes within 101, and that Bilski attempted to patent an abstract idea. Going beyond that in “striking the balance”, is not the Court’s task, because the statute doesn’t indicate that any other such balance ought to be struck. The FedCir has now been told that they too should beware striking the balance. If the balance is to be struck somewhere finer than “abstract idea”, Congress is the body that should say so.
@Shubha Ghosh — I think we are back to the broader analysis of “What did Applicants invent?” (I forget the cite). IOW, we will be viewing FedCir holdings, one at a time, to get a sense from the result in each case regarding what is an “abstract idea” (as opposed to broader tests that try to extend beyond the specific holdings). And I do not think that to be a bad result — despite the absence of a bright line.
P.S. Seems to this casual observer that what the applicant invented in Prometheus is to make sure one doses the patient to a level between 230 and 400 whatevers. Arguing whether a “transformation” is taking place in doing so is utterly beside the point, and points out the weakness in the “bright line” of MOT.
The Bilski claims sucked. The Fed Cir should be ashamed they did not toss the case out on mental steps and be done with it. The patentee even admitted no computer was required for the claims.
klan? Shubha – you mistake my slurs – they were of general incompetence and had absolutely nothing to do with anything else. You be too sensitive, besides being generally incompetent.
As to p_ssing match between the Supreme and CAFC, that’s been noted here for awhile, and is definitely llinked to the Legislature creating a lesser court to do something the major court views as their domain.
My Pal Hal Wegner has also pointed out that the Prometheus GVR may follow the path as that led to Chakarbaty – which did not follow the Supreme’s initial direction from Flook and Benson.
Also Shooby, Bilski purposely held that its reading was narrow, yet like a typical academic, you wanted to roll away completely thirty years of jurisprudence – that aint narrow.
Nice point, pikkumatti, to the extent that you read Bilksi as a case about institutional competence. I compared the decision with the Canadian Supreme Court’s decision about patentable subjct matter from 2002. That case was pretty clearly aimed at the legislative branch if for no other reason than there is no equivalent of the Federal Circuit in Canada. Bilksi is a case about an interpretative battle between the Supreme Court and the Federal Circuit (with the USPTO unmentioned very much in the background). With the remand of Prometheus, the ball is in the Federal Circuit’s court especially after their attempt to put together a test based on Supreme Court precedent with MORT. I think it is interesting that the Court did not engage with the various Federal Circuit tests more except for rejecting MORT and for an aside on “useful, concrete, tangible.” I am interpreting that virtual silence as the Court not thinking much of the Federal Circuit’s jurisprudence on PSM.
I am surprised ping has not rung in after his slurs from a few days back. Perhaps he is busy a a Klan meeting. It must be nice to hide behind anonymity so that clients or employers can’t see his or her competence.
The case is one about statutory interpretation.
Statutory interpretation is very much the court’s job. The reason the Supremes didn’t decide the question is that the question was not before them. They attempted to decide too many questions that were not properly before them as it is.
Surely you agree that even if Congress does not amend the statute, which they most likely won’t, the PTO and Federal Circuit will eventually be called upon to strike the appropriate balance under the current statute.
The main article states: By setting the clock back to 1982, the Supreme Court is telling the Federal Circuit to try again in devising workable rules for patent law.
With ever more people trying to innovate and thus seeking patent protections fortheir inventions, the patent law faces a great challenge instriking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of generalprinciples. Nothing in this opinion should be read to take a position on where that balance ought to be struck. Slip op. at 10.
The case is one about statutory interpretation. And the Court declines to make the policy decision about where the “balance ought to be struck”, as well it should. It is up to Congress to strike that balance. Not the SuprCt, and not the FedCir (by way of MOT or otherwise).
IMO, the majority in Bilski did exactly what they should have done in this case. Want something more precise? Ask your Congressman.
I just want to express my appreciation to Shubha Gosh for sharing his thoughtful perspective on the Bilski decision. I came away from reading the Bilski decision with similar feelings of dissatisfaction. It should be the Supreme Court’s job to provide a “clear articulation” (to borrow a phrase from KSR) of the rationale for deciding a case one way or another. Here, the Supreme Court articulated why the Federal Circuit was wrong in its reasoning, but did not articulate exactly what it is about Bilski’s invention that makes it too abstract to be patentable (not that I disagree with the conclusion). I’m very tired of the “I know it when I see it” posture taken by the Court. Where are the great Justices like Justice Story that wrote, “All that the law requires is, that the invention should not be frivolous or injurious to the well-being, good policy, or sound morals of society”? Where are the thought leaders in the law that could answer any simple yes or no question in such a manner that once you read it, it instantly became apparent why they answered it the way they did, and the logic can be repeatably applied to future similar questions.
One thing I appreciate about this opinion: at least they didn’t (by a slim margin) hold business method patents (whatever they are) as per se unpatentable. Thank God for small favors.
To RWA, good point. And what the Court did in Bilksi is effectively sign on to Judge Rader’s opinion in the Federal Circuit decisio in Bilski.
Gottshalk and Diehr were never in need of “revival.” As then Judge Rader pointed out in the Bilski dissent, they have always formed an important part of subject matter jurisprudence.
The bottom line is, the world was watching for SC(R)OTUS to give some “wise” guidance on this matter and, predictably, they failed. It shouldn’t have taken until now for an opinion of this caliber.
This is not a bad thing however. For patentees and applicants the message is that the door to subject matter eligibility is a wide one.
My analysis re: Alappat rests in part on the Court saying nothing specific itself on what the test should be. The majority opinion supports broad subject matter with limited exceptions (laws of nature, physical phenomenon, and abstract ideas). Nothing speaks to requiring a specific machine for a process claim to be valid. I would go so far as to say that the Court’s rejection of MORT as the only test would include rejections of tests that focus on the nature of the machine. So the Court leaves the field open as its precedents were in 1982 after Diehr and as the Federal Circuit was formed. That point is what strikes me the most about Bilski: the Court seems to be rejecting any attempt by the Federal Circuit to establish a hard rule about what is or isn’t patentable subject matter. That would include Alappat.
As for the thing that calls itself ping: the opinion clearly deals with process claims. To the extent software claims are a subset of process claims, then the analysis in Bilski applies. The Court avoids categorical exclusion and starts from the premise that patentable subject matter is broad. So perhaps software claims are not in any trouble. But that depends on how the USPTO and the Federal Circuit runs with the abstract idea limitation.
Is the Bilski test: “preempts an abstract idea or algorithm”?
That depends on how you claimed it. But yes, it can be patentable subject matter.
Maybe I didn’t write this down for you properly. So here, let me try in big letters.
THE “EQUIVALENCE” TO WHICH YOU ARE REFERRING IS IRRELEVANT.
You’re starting to catch on bucko. If the CLAIM (as opposed to the actual irl machine) is equivalent in subject matter covered as a claim that fails 101 because it preempts an abstract idea or algorithm then yes, it too will die so long as the person reviewing the claim manages to figure out that such a thing happened. Reviewing such a claim could very well be tricky and someone might miss that it indeed preempts all uses of an algorithm or abstract idea.
BTW a “digitial microprocessor executing code” is also HARDWARE unless you’re trying to say “a method specifying what a digitial microprocessor executing code does”.
But look man, I wish you gl and can’t wait to see an appeal from you.
a digitial microprocessor executing code for the SAME task is NOT patentable???
That’s absurd since they are equivalent.
Or maybe you are saying the neither is patentable – that’s less absurd, but THEN let’s be honest and say that we are throwing out HARDWARE claims as well.
Moshe, you (and likely Ping) don’t seem to have either read the Bilski decision, or have understood it. It deals with method claims but what is held will likely affect other statutory classes as it reiterates the holding from Flook. It also relies heavily on Benson/Flook/Diehr, see page 14 for instance. It relies on B/F/D for the proposition that attempts to patent an abstract idea are not patentable. If all one has done in a claim is implement an abstract idea on a general purpose computer (iirc this is what was admitted in Alappat) then you will likely get MoT’d. Good luck getting around it with either a product/apparatus or a method claim.
Alappat, in so far as I can tell, was based on simply repudiating the argument that simply being a programmed general purpose computer was enough in and of itself to reject the claim. They based that decision on their prior decisions to allow such claims, although their prior decision did no such thing. That is all fine and dandy, after all a computer is an apparatus. But you’re not going to get around MoT or “attempting to patent an abstract idea” (aka your algorithm that you just put on a general purpose computer) so easily and that will take care of the most egregious of the claims relying solely on Alappat to be valid.
Gl to you and I look forward to seeing your cases at the CAFC. So far I’ve noticed a few cases like the one you described above that the Board has put an end to before this Bilski decision based on the post solution activity doctrine and they were never appealed so far as I can tell.
I want to get around potential 101 problems for SW patents by tying an apparatus (or method claim) to a particular machine – i.e. a digital computing system including a microprocessor and volatile memory for storing code where execution of the code by the microprocessor is operative to carry out A, B, C, etc.
Ah. Well then, I might refer you to this blog’s various past discussions on the validity of Beauregard claims.
IANAE – the MOT of CAFC Bilski has TWO prongs.
Bilski’s claim was a method claim.
Based upon Alappat, this appears like a useful way to avoid 101 problems based on the SECOND prong.
Today’s USPTO routinely allows such claims.
I am not sure what the situation is at the CAFC (or higher) level.
Prof. Ghosh attempted to answer my question without citing anything SPECIFIC.
Shubha is a professor o law and posts the above?
O that is just too sad.
I pity the students that learn at the feet of that one.
As an electrical engineer, it is quite evident to me that a ‘customized circuit’ configured to perform a task is completely equivalent to a ‘general microprocessor’ executing computer code stored in memory configured to perform the same task – this is what Alappat teaches us.
I would argue that it’s more pertinent to focus on the task itself. That’s the real invention, right? One way or another, you’re claiming the steps of performing that task. It doesn’t matter (or shouldn’t, anyway) whether you have a general computer or a hard-wired circuit performing the task. If the task is tied to a machine or effects a transformation, you’ve got yourself a statutory claim.
Prof. Ghosh — your analysis indicated that the clock is turned back to 1982 – can you point to something SPECIFIC in the SCOTUS decision and/or in Federal Circuit that overrode the teaching from Alappat that I quoted ??? Alappat seems to cite Benson, Flook and Diehr extensively.
The cited teaching from Alappat is NOT equivalent to the “useful-concrete-tangible” doctrine of State Street that was probably overridden by SCOTUS yesterday. As an electrical engineer, it is quite evident to me that a ‘customized circuit’ configured to perform a task is completely equivalent to a ‘general microprocessor’ executing computer code stored in memory configured to perform the same task – this is what Alappat teaches us.
Therefore, I would appreciate some guidance as to what SPECIFIC supreme-court (for CAFC) holding has overridden this teaching.
Thanks for your thoughtful post, and thanks for taking the time to respond to my previous commment.
BTW – included in 6’s “those that misconstrue” is the USPTO itself.
Moshe – Alappat is 6’s ultimate favorite legal work. The thrashings 6 has received on account o’ that decision are legendary.
As far as Bilski goes though – nothing in Bilski impacts the legality of software cause Bilski did not have, nor did it address, software. What the Supremes had to say, then didn’t talk to software.
As far as “overruling”, my guess would be that your legal knowledge is minimal, else you would realize that a case in case law can have many holdings and one aspect being overuled does not mean every other aspect is overruled.
Sorry for the initial use of agent rather than examiner. It seems to have slipped by two sets of eyes, but is now corrected. In any case, the bottom line in my analysis is that the Court has turned the clock back to 1982, and so In re Alappat is irrelevant (if it were ever the opposite). What strikes me about the Court’s decision is how much the Court seems to view the issue as a battle with the Federal Circuit, ignoring the role of the USPTO and examiners in administering the standard. It will be interesting to see how Commissioner Kappos responds and how much patent examiners view the opinion as a carte blanche for rejecting on Section 101 as opposed to a wide open ruling that section 101 does not have much teeth beyond the traditional three exclusions. On this last point, the Court should have issued an opinion that MORT is not the test and the exclusions are limited to the three.
It was never good law in the US so no, it does not “remain” good law in so far as many people will misconstrue what was held.
But you’re welcome to rely on its reasoning and get you a big ol’ MoT.
The CRUCIAL question for patenting software – Assuming that State Street has been overruled (there is some debate about this, but let’s assume so for now), does “In Re Alappat” remain good law in the US today?
Many believe that “In Re Alappat” is the precursor to State Street – to the best of my knowledge, Alappat was NOT addressed in either the CAFC Bilski opinion from 10/08 or in yesterday’s SCOTUS opinion.
….What is the sound of one patent clapping?
There’s a subtle difference. Just compare Moonbeam’s vibrant, witty, always well-informed comments with the demented, diarrheal, deranged posts of IQ=6.
It’s nice to see all the guest posters volunteering their perspectives on Bilski.
In terms of method, Bilski v. Kappos reminds me of the Canadian Supreme Court’s 2002 decision in Harvard College v. Canada (Commissioner of Patents), which rejected a patent on a multicellular living organism. Both decisions relied heavily on a strict reading of the statute with the Canadian Supreme Court ruling that the word “invention” in the Canadian patent statute did not include living organisms. The Canadian Supreme Court decision, however, seemed to be sending a clear message to the Canadian Parliament to amend the statute if necessary.
Actually, the Canadian Harvard decision was only about higher life forms. Lower life forms (bacteria and such) are still patentable in Canada, and apparently you can still enforce Canadian gene patents against genetically-modified canola (an unpatentable higher life form).
I think Bilski tends in the opposite direction. The holding in Harvard was that if inventions included higher life forms the definition of “invention” would have been explicit to that effect. Bilski takes a much more expansive view of the (strikingly similar) statutory definition of “invention” unless and until Congress specifically limits that definition, but erects the barrier where it belongs – to block undue abstraction rather than a particular field of technology.
The only real problem is that they didn’t say how abstract is too abstract. We know we have to claim better than Bilski did, but that’s about it. In that sense, the decision is somewhat reminiscent of Harvard. They left it to the patent office to draw the line between abstract and concrete, and we all know which way that’s going to go, until something in between gets litigated.
It’s not _that_ interesting, or that much of a question. Bilski proposes no analysis. Thus, more of a zen riddle, rather than a question.
I’m not familiar with the terminology/jargon in other countries, but doesn’t this repeated use of “patent agent” where the author should mean “patent examiner” a little odd?
It is an interesting question. Unfortunately, Bilski contains almost no analysis geared toward answering the question. Pretty much just a conclusory statement that Bilski’s claims were too abstract.

References: v. 
 v. 
 v. 
 §101
 §102
 v. 
 v.