Source: https://www.filewrapper.com/bilski-no-machine-or-transformation-no-patentable-method-at-least-for-now/?A=WebApp&CCID=26884&Page=4&Items=3
Timestamp: 2020-08-12 13:00:01
Document Index: 494272207

Matched Legal Cases: ['§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101']

Bilski: No machine or transformation, no patentable method, at least for now « Filewrapper
Bilski: No machine or transformation, no patentable method, at least for nowNovember 3, 2008
As we reported Thursday, the Federal Circuit has decided In re Bilski, an en banc decision regarding the scope of patentable subject matter. Specifically, the court addressed what is necessary for a method to fall within the scope of patentable subject matter under § 101.
The court, after examining the relevant Supreme Court cases on the subject (such as Diehr, Benson, and Flook), the court adopted the "machine-or-transformation" test as the applicable test for patent-eligible methods. In so doing, the court rejected the Freeman-Walter-Abele test (regarding algorithms), the "useful, concrete, and tangible result" test articulated in State Street, and the "technological arts" test described in, for example, Ex parte Lundgren.
The machine-or-transformation test is a two-branched inquiry; an applicant may show that a process claim satisfies § 101 either by showing that his claim is tied to a particular machine, or by showing that his claim transforms an article.
The machine or transformation must also "impose meaningful limits on the claim's scope" and "must not merely be insignificant extra-solution activity."
The final vote was 9-3, with Judge Dyk writing a concurrence joined by Judge Linn, and Judges Newman, Mayer, and Rader authoring separate dissents.
The claim at issue on appeal was claim 1 of Bilski's application. That claim is reproduced below:
1. A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of: (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer; (b) identifying market participants for said commodity having a counter-risk position to said consumers; and (c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions
The examiner rejected the claim as "not implemented on a specific apparatus and merely manipulates [an] abstract idea and solves a purely mathematical problem without any limitation to a practical application, therefore, the invention is not directed to the technological arts." The Board of Patent Appeals and Interferences held the examiner improperly relied on a "technological arts" test, but affirmed the rejections as not tied to an apparatus and involving no physical transformation of matter, and that it did not produce a "useful, concrete, and tangible" result. Bilski appealed. The Federal Circuit sua sponte ordered the case to be heard en banc, and requested briefing on five issues:
Numerous amici filed briefs on the issues, and oral argument was held in May.
The en banc court affirmed the rejection. The nine-judge majority also delved into the proper test for a patentable method. The court examined the various tests that have been applied in Supreme Court and previous Federal Circuit cases. In the end, the court adopted the "machine-or-transformation" test from Supreme Court jurisprudence, which, for a method to be patent-eligible under § 101, requires either a showing that the claim is "tied to a particular machine," or that the claim "transforms an article." The court did leave an opening for "refinement" of the test in the future to accomodate new technologies:
Thus, we recognize that the Supreme Court may ultimately decide to alter or perhaps even set aside this test to accommodate emerging technologies. And we certainly do not rule out the possibility that this court may in the future refine or augment the test or how it is applied. At present, however, and certainly for the present case, we see no need for such a departure and reaffirm that the machine-or-transformation test, properly applied, is the governing test for determining patent eligibility of a process under § 101.
The court also considered other tests that have been applied over the years, and ended their continued applicability. Among these are the Freeman-Walter-Abele test, which, in its two steps, required:
(1) determining whether the claim recites an "algorithm" within the meaning of Benson, then (2) determining whether that algorithm is "applied in any manner to physical elements or process steps."
The court held this test was "inadequate" in light of the opinion in this case, noting that in other cases, claims failing the test have been held to be drawn to statutory subject matter.
The court next turned to the "useful, concrete, and tangible result" test from State Street. As with the Freeman-Walter-Abele test, the court found this test inadequate:
To be sure, a process tied to a particular machine, or transforming or reducing a particular article into a different state or thing, will generally produce a "concrete" and "tangible" result as those terms were used in our prior decisions. But while looking for "a useful, concrete and tangible result" may in many instances provide useful indications of whether a claim is drawn to a fundamental principle or a practical application of such a principle, that inquiry is insufficient to determine whether a claim is patent-eligible under § 101. And it was certainly never intended to supplant the Supreme Court's test. Therefore, we also conclude that the "useful, concrete and tangible result" inquiry is inadequate and reaffirm that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply.
Finally, the court addressed the "technological arts" test applied by the examiner and mentioned by several amici. The problem with this test, according to the court, is that the meaning of the terms "technological" and "technology" are not static, making this test difficult to apply consistently.
Having determined the "machine-or-transformation" test is the applicable test, the court then examined its prior precedent for guidance on its application. The court held certain principles applicable to both the "machine" and "transformation" branches of the test, noting in either case the machine or transformation must "impose meaningful limits on the claim's scope" and "must not merely be insignificant extra-solution activity." Because the claim at issue admittedly did not involve machine implementation, the court left additional definition of that prong of the test for future decisions.
Regarding the "transformation" prong, however, the court offered additional guidance as to what things constitute "articles" that can be "transformed" to make a claim patent-eligible under § 101. Chemical or physical transformations certainly satisfy this requirement, as noted in Benson. The court used a CCPA decision to illustrate the boundary (internal citations omitted):
Our predecessor court's mixed result in Abele illustrates t