Patent Eligible Subject Matter: Where Are We Now?

A Presentation to CPTCLA

September 23, 2011

Mike Connor

Alston & Bird LLPAtlanta | Brussels | Charlotte | Dallas | Los Angeles | New York

Research Triangle | Silicon Valley | Ventura County | Washington D.C.

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Presentation Outline

Patent Statutes

In re Bilski in the Federal Circuit

In re Bilski in the United States Supreme Court

Treatment of Process (and other) Claims After Bilski

Questions

What is Patentable? 35 U.S.C. § 101

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. § 100(b) Definitions The term “process” means process, art or method, and includes a new use of a known

process, machine, manufacture, composition of matter, or material.

Statutory subject matter “may include anything under the sun that is made by man” S.R. REP. NO. 82-1979 (1952), reprinted in 1952 U.S.C.C.A.N. 2394, 2399.

Exceptions: laws of nature, natural phenomena, and abstract ideas

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Federal Circuit- Bilski v. Kappos

Bernard Bilski and Rand Warsaw appealed PTO’s rejection of their claim for a method for handling energy hedge funds Patent examiner held that invention was not patentable subject matter under § 101 B.P.A.I. affirms

In 2008, the Federal Circuit affirmed rejection of patent claims Federal Circuit reiterated the machine-or-transformation test as the test for patent

eligible subject matter “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a

particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”

The machine or transformation “must impose meaningful limits on the claim’s scope . . . .” The machine or transformation “must not merely be insignificant extra-solution activity.”

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Supreme Court – Bilski v. Kappos

In June 28, 2010 opinion, SCOTUS held: Bilski’s claims are not patentable “abstract ideas” are not patentable “machine or transformation test” –

while useful – is not the exclusive test for determining whether a business method is patentable

declined to adopt a test to determine patentability of a business method

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Bilski-related Financial cases

Graff/Ross Holdings LLP v. Federal Home Loan Mort. Corp., (D.D.C. Aug. 27, 2010) (Process for generating a purchase price for at least one component of property using a computer)

Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada, (E.D.Mo. Feb. 14, 2011) (A system for administering and tracking the value of separate account life insurance policies)

CLS Bank Intern. v. Alice Corp. Pty. Ltd., (D.D.C. Mar. 9, 2011) (Patents directed to help reduce the settlement risk of trades of financial instruments using a computer system)

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Bilski-related Financial cases continued…

Accenture Global Services, GmbH v. Guidewire Software, Inc., (D.Del. May 31, 2011)(Software capable of performing tasks relating to insurance transactions)

CyberSource Corp. v. Retail Decisions, Inc., (Fed. Cir. (Cal.) Aug. 16, 2011) (Method and system for detecting fraud in credit card transaction between consumer and merchant over the Internet)

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Bilski-related Cases: Medical The Ass'n For Molecular Pathology v. U.S. Patent and Trademark Office,

(Fed.Cir.(N.Y.) Jul 29, 2011) (Patents for isolated DNA sequences, methods for identifying mutations)

Prometheus Laboratories, Inc. v. Mayo Collaborative Services, (Fed.Cir. (Ca.) Dec 17, 2010) (Methods for calibrating proper dosage of drugs)

Intervet Inc. v. Merial Ltd., (Fed.Cir.(Dist.Col.) Aug 04, 2010) (DNA encoding of a type of porcine circovirus)

King Pharmaceuticals, Inc. v. Eon Labs, Inc., (Fed.Cir.(N.Y.) Aug 02, 2010) (Methods of informing patients about and administering muscle relaxant)

Classen Immunotherapies Inc. v. Biogen Idec et al., (Fed. Cir. (Md.) Aug. 31, 2011) (Evaluating a vaccine immunization schedule)

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Bilski-related Computer cases Research Corp. Technologies, Inc. v.

Microsoft Corp., (Fed.Cir.(Ariz.) Dec 08, 2010) (Method/apparatus for rendering a half-tone digital image)

Ultramercial, LLC v. Hulu, LLC, (C.D.Cal. Aug 13, 2010) (Distributing copyrighted material over the Internet)

Glory Licensing LLC v. Toys R Us, (D.N.J. May 16, 2011) (A system for processing information from a template file to an application)

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Bilski Take Aways

M-O-T test is still the principal test for patent eligibility of processes “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or

(2) it transforms a particular article into a different state or thing.” The machine or transformation “must impose meaningful limits on the claim’s scope . . . .” The machine or transformation “must not merely be insignificant extra-solution activity.”

Courts then look at whether the claimed subject matter is drawn to unpatentable subject matter “laws of nature, physical phenomena, and abstract ideas” are not patentable Mental Processes are considered abstract ideas Mental Processes, performed in the human mind or with pen and paper, are abstract ideas

(Cybersource)

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Machine Prong

a machine “must play a significant part in permitting the claimed method to be performed” CyberSource Corp. v. Retail Decisions, Inc., (Fed.Cir.(Cal.) Aug 16, 2011) (citing

SiRF Tech., Inc. v. Int’l Trad. Comm’n)

A “facilitator” is too broad of a term; “Internet” is not a machine Ultramercial, LLC v. Hulu, LLC, (C.D.Cal. Aug 13, 2010) (Distributing copyrighted

material over the Internet)

If the machine is merely an object where the method operates, then that will weigh against patentability Graff/Ross Holdings LLP v. Federal Home Loan Mortg. Corp., (D.D.C. Aug 27, 2010)

(Process for generating a purchase price for at least one component of property using a computer)

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Machine Prong continued…

Simply reciting the use of a programmed computer does not satisfy the machine prong since it adds nothing more than a general purpose computer that has been programmed in an unspecified manner to implement functional steps in the claim Glory Licensing LLC v. Toys R Us, (D.N.J. May 16, 2011) (A system for

processing information from a template file to an application)

Coupling of an unpatentable mental process with a machine or manufacture does not make the invention patentable CyberSource Corp. v. Retail Decisions, Inc., (Fed.Cir.(Cal.) Aug 16, 2011)

(Method and system for detecting fraud in credit card transaction between consumer and merchant over the Internet)

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Transformation Prong

“analyzing” and “comparing” two gene sequences were abstract ideas; Steps of “growing cells” were deemed transformative The Ass'n For Molecular Pathology v. U.S. Patent and Trademark Office (Fed.Cir.

(N.Y.) Jul 29, 2011) (Patents for isolated DNA sequences, methods for identifying mutations)

“administering” drugs is a transformative; “determining” the levels of drugs in a subject also involves transformation since the step involves a manipulation of the bodily sample Prometheus Laboratories, Inc. v. Mayo Collaborative Services, (Fed.Cir.

(C.A.) Dec 17, 2010) King Pharmaceuticals, Inc. v. Eon Labs, Inc., (Fed.Cir.(N.Y.) Aug 02, 2010)

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Transformation Prong continued… Claim directed at variations in immunization schedules does not include a

transformation, however including the subsequent act of immunization is a transformation Classen Immunotherapies Inc. v. Biogen Idec et al., (Fed. Cir. (Md.) Aug. 31, 2011)

(Evaluating a vaccine immunization schedule)

Transferring of data between computers is not transformative Ultramercial, LLC v. Hulu, LLC, (C.D.Cal. Aug 13, 2010) Glory Licensing LLC v. Toys R Us, (D.N.J. May 16, 2011)

Gathering data is not transformative Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada, (E.D.Mo. Feb 14, 2011) 

Collection and organization of data is not transformative CyberSource Corp. v. Retail Decisions, Inc., (Fed.Cir.(Cal.) Aug 16, 2011)

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Abstract Ideas

Mental processes, processes that can be done without the aid of a machine and can be done in the human mind, are considered abstract ideas

Example from CyberSource Mental processes include (1) obtaining information

about transactions which can be done by a human reading records; (2) constructing a map of the records can be done by hand; and (3) using the map to determine whether the credit card is valid can also be done by a person (CyberSource Corp. v. Retail Decisions, Inc., (Fed.Cir.(Cal.) Aug 16, 2011)

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Abstract Ideas continued…

Method reciting “computing a price” was held to be abstract Graff/Ross Holdings LLP v. Federal Home

Loan Mortg. Corp., (D.D.C. Aug 27, 2010)

Inventions with specific applications or improvements in technology “are not likely to be so abstract…” Research Corp. Technologies, Inc. v. Microsoft

Corp., (Fed.Cir.(Ariz.) Dec 08, 2010) (stating the patent made it more efficient to render half-tone images using a computer)

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Questions

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THE END