BPAI ‘Informative’ Opinion on Business Method Patents

I commented earlier on the continued transformation of the Board of Patent Appeals & Interferences (BPAI) from a somewhat secret organization to one that is engaging with and accountable to the public.

With the advent of publication of applications, the BPAI has become a more public body and continues to move toward the goal of providing sound decisions that both adjudicate the particular issues in question and provide further guidance to other applicants and examiners. [LINK].

Now, the Board has begun a new initiative publishing “informative opinions.” While not precedential, these opinions are selected because they are thought to provide useful guidance to both Patent Examiners and Practitioners. BPAI Informative Opinions;

Ex Parte Bilski (BPAI 2006).

The only 2006 opinion on the informative opinion list is Ex Parte Bilski. Bilski is a business method patentable subject matter decision that again flips Ex Parte Lundgren

The Board held in Lundgren that the “technical arts” test is not a separate and distinct test for statutory subject matter. Although commentators have read this as eliminating a “technology” requirement for patents, this is not what was stated or intended.

Bilski’s patent is directed at a method of managing risk at a reduced cost. The claims at issue are not tied to any physical structure; do not recite a physical transformation or any electrical, chemical, or mechanical act; and could be performed entirely by human beings without any outside aid. In its 71 page opinion, the board determined that the method was not statutory subject matter under Section 101, and prepared for a CAFC hearing:

In questionable cases, we feel that the public interest is best served by making a rejection. The Federal Circuit cannot address rejections that it does not see. . . . It would be helpful if the Federal Circuit would address this question directly.

(1) Mental Steps and Transformation: According to the Board, not every series of steps fit within the process requirement of section 101.  A section 101 process necessarily transforms some physical subject matter to a different state or thing.  A claim which can be entirely performed by a human can “be statutory subject matter if there is a transformation of physical subject matter from one state to another.” The claims here did not, however, provide any transformation of matter. Since the claim does not require a computer, there is not even an “implicit transformation of electrical signals from one state to another.”  The claims do recite a transformation “risk position” — but a non-physical transformation does not count.

(2) Abstract Idea: The Board considers the ‘abstract idea test’ to be a ‘backup’ to the transformation test — noting that “[t]here may be times where it is easier to analyze the subject matter as an abstract idea”  In this case, Bilski’s claims are both non-transformative and abstract.

Claim 1 describes a plan or scheme for managing consumption risk cost in terms of a method. It is nothing but an disembodied “abstract idea” until it is instantiated in some physical way so as to become a practical application of the idea.

Furthermore, the claim is also abstract because it covers “any and every possible manner of performing the [conceptual] steps. Thus, it can also be said that the claims ‘preempts’ the concept in the claimed methods.”

(3) Result that is Useful and Concrete and Tangible: If a method is abstract, it cannot have a concrete and tangible result because they are opposites. Concrete and tangible require “some sort of physical instantiation” that is not found here.  Likewise, although the claimed method may be useful in the business sense, “a method that has not been implemented in some specific way is not considered practically useful in a patentability sense.”

Concurrence by McQuade:

The quest for a bright line test for determining whether a claimed invention embodies statutory subject matter under 35 U.S.C. § 101 is an exercise in futility. . . . Per se rules or tests, while arguably easy to apply, simply do not afford the flexibility needed to keep pace with new developments in technology and the law.

Considered collectively, these are powerfully persuasive factual indicators (not tests) that the method recited in claim 1 is, at its core, a disembodied business concept representing nothing more than a non-statutory abstract idea. That the “initiating” and “identifying steps recited in the claim are drafted as acts required to be performed is of no moment. Given the full context of the claim, these acts are nominal in nature and merely serve to superficially couch the appellants’ abstract
idea in a method or process format.

Rejection affirmed.

Notes:

29 thoughts on “BPAI ‘Informative’ Opinion on Business Method Patents

  1. Look at the bottom of page 35 of the Bilski opinion:

    /media/docs/2008/02/fd022257.pdf

    I didn’t know anyone on the Board had a sense of humor!

  2. I agree with zed.
    No matter how horrendous the examiner is, you need to establish a “record” for appeal. The futility comes when you do not establish an adminstrative record and then you run to the Board (or the Fed. Cir.) asking them to reverse on the basis of a non-existing adminstrative record.

  3. zed

    I agree that there are some good examiners out there, and when you find them, it makes prosecution a joy.

    I cite case law because I am setting the application up for appeal. These days, about half of my workload is appeal-related (i.e., filing an appeal brief, a reply brief, or a response to an examiner reopening prosecution).

  4. pds,

    While a good portion of the patent attorneys with whom I have worked know patent law fairly well, they realize that it is often worthless in prosecution as the examiners refuse to adhere to the law. Sometimes examiners will listen to the MPEP when it is quoted back to them, but more than should be the case I have seen examiners make up their own law. Thus, citing the law is often an exercise in futility.

    Note that not all examiners are like this, some are quite good, but some are horrendous.

  5. NYC lawyer … all very good points. I wish I had time today to fully address them.

    The issues you raised address, in part, the basis of my (extensively expressed on this board) fears in giving the PTO wide leeway in making obviousness determinations. I have little faith that the whatever SCOTUS comes down with in KSR will be properly applied by the PTO.

    To properly apply the law as it applies to patent prosecution takes more knowledge of the law than what nearly all patent examiner and a good majority of patent attorneys/agents currently possess. I hear too many patent attorneys say they don’t practice law (and I cringe when I hear it) because they practice patent prosecution. As a result, they don’t take the time to familiarize themselves with the law, and since they don’t know the law, they don’t know enough to correct and examiner when the examiner improperly applies the law. This cycle continues because neither party (the attorney or the examiner) understands the law enough to correct the other.

  6. Wow NYC lawyer.

    That is a pretty “heavy” duty charge.

    Do you have a citation to the alleged admission by a top USPTO official that they intentionally violate the APA?

    (That’s Title 5 of the USC, sections 500-etc. for those who read Patently-O and believe 35 USC is the “only” law. Pay attention to how often the Fed. Cir. cites 5 USC 706. Wake up people. You’re unwittingly blowing your client’s legal rights away if you don’t understand what 5 USC 706 means, if you don’t know what Meade deference is. That especially means you patent agents out there although I’d say 75% of patent prosecuting attorneys are no better.)

  7. Bilski is a stark display of much that is rotten at the Patent Office, and particularly rotten in Tech Center 3600 (business methods, the Center out of which Bilski arises).

    The most striking thing in the Bilski opinion is the scant citation to *majority* opinions or holdings of any court. Cite after cite is to the Lundgren *dissent* (the portion of Barret’s opinion that is a clear dissent, not the concurring portion), the LabCorp *dissent*, overruled cases, or the MPEP (which states over and over again that it only applies to examiners, and has neither “force of law” against applicants nor guidance for the Board. E.g., Sehgal v Revel, 81 USPQ2d 1181, 1186-87 (BPAI 2005)). The Bilski decision does the totally unheard-of: it cites as authority *questions* asked by Judge Breyer at the oral argument of LabCorp. Supreme Court questions are famously non-indicative of the Court’s final view, and especially so in LabCorp, where Justice Breyer was one of the *dissenters*.

    What we have here, on bold display, is the Patent Office’s general attitude of disrespect for the rule of law, especially for administrative procedure, due process, or legal process. The general attitude thoughout the Office, and the Bilski opinion in particular, is that of a vigilante posse – procedure, correctness and the rules by which legal determinations are made be damned. The scofflawry operates from the top of the Office to the bottom:

    (a) A written, on-the-record statement by a top-ten official of the Office states that the Office has “no responsibilities” under the Administrative Procedure Act.

    (b) A Technology Center Director states on the record that prior decisions of the Director himself are not “helpful” and will not even be read; instead this T.C. Director states on the record that he makes up the law on a case-by-case basis at his personal whim.

    (c) Examiners regularly tell me that “I don’t have to follow the MPEP,” even where the MPEP uses the word “must.” Examiners are very good at making up on the spot excuses for themselves – almost as if it were part of the formal training. The reason is almost always as insubstantial as “I’ve never seen that before” (surprisingly, I get that excuse a LOT.)

    (d) In an interview, a primary examiner refused to consider the applicability of Lundgren to my claims (my claims used the relevant claim language of Lundgren almost verbatim) – instead he threatened to end the interview.

    (e) Bilski. The dissenters in Lundgren won’t accept that they lost, even though they lost to the full en banc authority of the Board, so they insist on a “do over.” Hoping to hide their mutiny against the Board’s Standard Operating Procedures VI(A)(4) (en banc precedential Board decisions are binding authority, link to uspto.gov), they do so in an “unpublished” opinion. But seeking to have their cakes and eat it too, they then publish it as “instructive.”

    The reason that the PTO has to do so much “rework” is very simple – attorneys can read, and too many people at the PTO won’t. We know what the PTO is required to give our clients, and we won’t let examiners steal from them by ignoring the law and acting on personal whim of the moment, like common street hoodlums. Applicants will keep coming back to ask for what the law says the Office is obligated to give our clients, until we get it.

    Here are a couple action items for you, Director Dudas and Commissioner Doll. These are things that (a) are obligations, pursuant to your oaths to “take care that the laws are faithfully executed,” and to “provide management and direction for all aspects … relating to … patents”, and (b) make sense to improve efficiency – these steps will clear up your “rework” backlog in two quarters by stopping the issuance of “junk work product” from your employees that requires correction, and getting everybody back on the same legal wavelength.

    (1) Make clear to all employees that the Office’s job is to apply the law. In order to do that, each employee has to make an effort to look up what the law is. The law is what is written down, not what you think it is, not what you think might be right or ought to be. Your opinion must be left out in the parking lot. If you have a seat on the Board, once you’re out-voted, your dissent is a statement of what the law is *not.* Make clear that it is not acceptable for APJ’s to “expressly incorporate by reference the legal analysis” from that dissent. Bilski, slip op. at 11.

    (2) The law is not just §§ 101, 102, 103, and 112; the *procedural* law is just as important, just as binding – and your oaths require you to see that it will be “faithfully executed.” Vitarelli v. Seaton, 359 U.S. 535, 546-47 (1959) (Frankfurter, J., concurring) (“procedure must be scrupulously observed.”); Reuters v. F.C.C., 781 F.2d 946, 950-51 (D.C. Cir. 1986) (“Ad hoc departures from [an agency’s] rules, even to achieve laudable aims, cannot be sanctioned”). Constitutional due process requires either the grant of the right, or a reasonably complete, procedurally-adequate explanation of denial. Regents v. Roth, 408 U.S. 564, 576 n.15 (1972)

    Here are two examples:

    (2)(a) If the MPEP requires showings (a) (b) and (c) for a particular type of rejection, then you should make clear to every PTO employee that no paper carries your authority and may not leave the Office until (a) (b) and (c) are set out on paper. Counts for past papers will be revoked if there is a material omission.

    (2)(b) 5 U.S.C. § 555(b) (the Administrative Procedure Act) requires agencies, including the Board of Appeals, to “conclude matters presented,” not delay them. For example, the Board frequently remands with a mere suggestion of a new reference for application, without an actual rejection, transparently for the purpose of bouncing the application back down to the examiner (the very one who was just determined to be wrong on other issues) to avoid working to conclude the matter. This strips the appellant of the protections of 37 CFR 41.77(b)(2). This is illegal. E.g., McDonnell Douglas Corp. v. National Aeronautics and Space Admin., 895 F.Supp. 316, 319 (D.D.C. 1995) (condemning “second bites” and an agency’s “never ending loops”).

    (3) Appoint members of the Board who are “of competent legal knowledge”: at the very least they should be able to Shepardize (or KeyCite) to avoid citing overruled propositions, and should be able to tell the difference between a holding and a dissent. What’s all this citing of the LabCorp and Lundgren dissents? Why is Bilski relying on the “nutshell holding” of Gottschalk v. Benson, when the Supreme Court expressly disowned that analysis? Diamond v. Diehr, 450 U.S. 175, 185 (1981) (Benson and Flook “stand for _no more_ than [the] long-established principles” that abstract ideas and natural phenomena are not patentable). The Federal Circuit has expressly recognized Diehr’s erasing of all but a few lines of Benson, State Street v. Signature, 149 F.3d 1368, 1374 n.7, 47 USPQ2d 1596, 1602 n.7 (Fed. Cir. 1998), why does the Board not accept the self-correction made by both courts?

    (4) More applicable to examiners than the Board: Examiners have to be taught that they are obligated to learn their subject matter areas. The attitude among too many examiners is that “I already know everything about this stuff, don’t bother me with the facts.” Examiners regularly redefine basic terms of art, and get really huffy if you ask them to look in a technical dictionary or treatise from the relevant art. Too many examiners refuse to learn from treatises – instead, you have to spend $7-20K on an affidavit of an independent expert or an appeal. Examiners’ refusal to learn costs everybody a lot of money.

    (5) Examiners and the Bilksi Board members: You have to look up the law, you can’t make it up. Until you are appointed to an Article III court (or work for an agency with substantive rule making authority), the law exists only in what others have written, not in your personal opinion. The PTO spends a lot of money every year putting nice copies of the MPEP and the electronic USPQ within easy reach; too many examiners think that what they maybe remember that they thought they learned years ago controls. A clear majority of examiners get REALLY huffy – e.g., by threatening to end an interview – if an applicant requests that an examiner exert the immense physical effort required to lift that heavy book down off the shelf.

    Issues (4) and (5) exist throughout the Office, the striking thing is that these abuses occur almost as the rule rather than the exception in Tech Center 3600 (business methods). That’s why the pendency time, and reversal rate at the Board, are so much higher in 3600 than anywhere else in the Office.

    If Bilski was selected by the Board as an “instructive opinion,” what is the “instruction” that the Board is trying to provide to the bar? What impression are we to draw of the Board’s view of its own role, its respect for the rule of procedural law, and its view of the quality of its own work?

  8. This is not the article I was thinking of, but all the same …

    “The Patent Act of 1793 was a reaction to perceived problems with the Patent Act of 1790. The Act of 1790 made the Department of State responsible for the issuance of patents. It obligated a patent board consisting of the Secretary of State, the Secretary for the Department of War, and the Attorney General to examine patent petitions to ascertain whether the invention was “sufficiently useful and important” to authorize the issuance of a patent, although it provided absolutely no guidance for determining what constituted sufficient usefulness and importance. If two members of the board found the invention to meet this criterion, and if the ministerial requirements were met and the appropriate fees paid, the patent would issue.

    It quickly became evident that neither inventors nor the high government officials who comprised the patent board were happy with the Act of 1790. The delays in obtaining patents must have been highly frustrating to inventors as were the demands for information placed on them by the board.8 Moreover, inventors found themselves disputing the descriptions set forth in the issued patents,9 most often on the ground that the description too narrowly described the invention and thereby restricted the scope of the patent. Finally, inventors were concerned that less than half of the patent petitions filed were resulting in issued patents.10

    But it was the dawning recognition by the members of the patent board, and particularly by Jefferson, that they simply had insufficient time to properly carry out the tasks assigned to them under the Act, that more than anything else soon produced an understanding in the Congress that the Act of 1790 had to be amended or in some manner changed to avoid having high government officials responsible for the issuance of patents.11 Thus, on December 9, 1790, only seven months after Congress had passed the Act of 1790, the House appointed a committee to bring in a bill or bills to amend the Act.”
    from: link to etext.virginia.edu

  9. step back, it is interesting you brought up a registration system. I’ve been thinking about such a system lately. I believe everything the PTO has been promoting, perhaps unknowingly, is leading in this direction. That is, as a result of PTO problems, for example, bad decisions regarding things like classification, examiner retention, inadequate searching and/or expertise in various arts, more and more of the examination burden is being shifted to the applicants. For instance, take a look at the proposed IDS rule changes.

    I envision a possible future system including a post-grant opposition period that would lend some kind of presumption of validity to an issued patent. But, the applicants would be responsible for searching and initial “examination.” For example, competent searchers (former examiners?) could register with the PTO and become members of a pool. These individuals could be hired from the pool, blindly, as “approved” searchers that would perform patentability searches. Thereafter, applicants can draft claims and rely on a previously filed provisional for the filing date. Maybe some kind of statement regarding the search would be required upon filing.

    Very radical and world changing, I know, but it seems like this is where we are possibly heading. It also would create a load of new business :)

  10. Interesting thought StepBack. Can’t help you on the scholarly piece, but UK had this quaint idea (till EPC harmonisation in 1978) that non-examination is bad, but so too is obviousness examination (PTO not up to it) so the fairest is to examine for novelty prior to issue and let obviousness wait for the patent owner’s “day in court”. With arrival of EPC in 1978, and the obligation on the EPO to examine for the presence of an inventive step before issuing any patent, all UK predicted doom and disaster in the EPO. It didn’t happen, thanks to the invention within the EPO of the notorious “Problem and Solution Approach”. I’m proud that it was an Englishman, Cadman, that fathered PSA. I’m sad that the world away from the EPO dismisses PSA from serious consideration. There is no obligation on any judge outside the EPO to understand PSA (as the Approach wasn’t laid down in his court, but only by the lower species of Patent Office Examiner, why should he make any effort to understand it).

    What is striking about PSA is that, while some commentators lament that it is too harsh on Aplicants, others whinge that it is not severe enough. Usually these commentators aren’t working the Approach correctly. The magic of PSA is that, in opposition, both Patentee and Opponent think it will favour them in their efforts to “win” the opposition. There must be some merit in it then, no? The merits multiply, when we find in “oral proceedings”, to determine oppositions at the EPO, inventive step often takes relatively little time to settle. Typically, more time is consumed on other matters, like “novelty” and “added subject matter”. That statistic would be striking, for anybody who remembers obviousness in UK, prior to the EPO.

  11. I wanted add one more thought on this concept of post-grant opposition. Unfortunately I don’t have my memory ducks in a row at the moment. I recall reading a scholarly piece about the initial debates in the USA regarding whether the fledgling patent system of Jefferson’s times should be a simple registration one (no examination whatsoever) or one of initial but not thorough examination or one of thorough and exhausting examination.

    My recollection is that they settled on the middle ground as a compromise between exhausting start-up inventors of their financial resources via exhaustive examination versus letting all manner of junk invention claims out into the wild via the pure registration system. Does anyone recall the paper I’m talking about?

  12. Max,

    Fair enough.
    I wasn’t trying to insult anyone or trying to suggest that Americans somehow have a monopoly on grey matter. I was trying to get some readers to think a little more about their blind acceptance of social rapture words like “harmonization”.

  13. Thanks both. I am from England (Remember English common law? Prior to 1945, yes?) and share with StepBack some of his criticisms of civil (Roman) legal systems. If he can expose them more persuasively than me, all power to his elbow. I agree with him that “harmonisation” between USA and ROW patent law is a futile quest. Alien playing fields can be exquisite when you win on them and of course you can’t play all patent litigation games on your home pitch. The EPC is a mongrel but in rude health and, despite what StepBack asserts, it works well also for my US clients. I mind if my clients are dissatisfied but I don’t mind being laughed at by StepBack. I haven’t laughed yet. One of us will have the last laugh. At the moment it seems as if the US litigator is intent on borrowing juicy ideas out of the EPO candy store. That’s what prompted me to use the word “nudging”. But StepBack you’re going to tell me it was a US inventor that thought up the idea of post-issue opposition, are you?

    As to the surprising vehemence of your reaction to the innocuous word “nudging”. I wasn’t aiming to step on anybody, just alluding to the soft power of ideas.

  14. Dear Max,

    This going to come as a bit of surprise to you, but the reason we Yanks don’t enjoy getting “nudged” toward the European way of justice is because you people are still in the Dark Ages. Thank goodness you don’t enagage in “trial by jousting” anymore. Indeed we Americans understand because we had our era of Gunfights at the OK Corral from the time of the Wild West. Our system of jurisprudence has “evolved” over the past 230 years (2007-1776= 231) and we hope that the relatively primitive European system of jurisprudence (2007-1945= 52 years) will also evolve. One day you people will have weird notions like that of allowing “discovery” during litigation and of preventing bureaucrats from engaging in “arbitrary and capricious” decision-making.

    Until that day of enlightenment comes to Europe, I suppose we will continue to hear from you about how you think that words like “technical effect” have meaning, or how “business methods” can be rationally distinguished from methods having nothing to do with “business” or how software “as such” is different from hardware. We in the States have already been there and done that. We hope that you will soon pass through you teenage years and experience the joys of the “stroke of genius” test for obviousness (inventive step) and of the “synergy” test for analyzing combinations of known things. It will be fun to watch you going through your growing pains (as such).

    Then when you are finally all grown up, we can discuss the patentability of “business methods” and “software” and “genes” at a mature level. Regretably, as you may have noticed, there are some back-to-the-Dark Age wanna-be’s here in the States who want to prohibit the patenting of “genes” as such, the patenting of “business methods” as such and the patenting of “software” as such. If they have their way, then indeed we may find ourselves “harmonized” with your way of thinking and we may be well on our way to becoming “harmonized” with caliphate way of life too. I have already filed my patent application for “Internet Connected Burkah”. However, the mullah at my local madrassah says the church is entitled to 51% of whatever royalties I collect. He says I need to “harmonize” my way of thinking with his.

    I guess it’s just one more “nudge” on the road toward enlightenment (as such). :-)
    Cheers.

  15. If we are on the subject of “flipping” can I through these columns ask for helpful comment on the argument on patentability of business methods that is just beginning in Europe. In England, the Court of Appeal has finally handed down a seminal decision (Aerotel/Macrossan) and leave to appeal to the House of Lords has been denied. No flipping in England, just dogged persistence with the line there has been, since the European Patent Convention got going in 1978. By contrast, the EPO flip-flopped all over the place (Merrill Lynch, our “Pension Benefits”, being one of many tipping points), but settled on the following:

    Art 52 (your 101) if the claim recites some hardware, you escape exclusion from patentability

    Art 56 (your 103) non-obvious doesn’t mean non-obvious (echoes here of 112 means plus function) It means “non-obvious only when we are thinking exclusively about technical things”.

    Some think the EPO line is clever because we can say to the Americans that business methods are patentable, but then we kick out their claims because they are “obvious”. Trouble is, some people can see through that scam.

    I know that TRIPS says that patents are to be had in all fields of technology, but that is not the same as saying “If it’s not technology, it is not patentable”

    I think the UK needs support in its position, that kicks into the long grass the concept of “technical” as the clear line between patentable and not. Art 52,EPC contains an explicit bar to patenting “methods of doing business” so, for as long as that is the case, we in Europe must examine subject matter put forward in a patent application, we in Europe must set aside from consideration that which is a business method per se, and apply the further provisions of the EPC only to that which remains.

    Continental Europe sees UK as an offshore island whose views count for little. But the UK Court of Appeal has asked the EPO Enlarged Board of Appeal to look at Aerotel and see if it offers anything for the EPO. Can readers support that initiative? Nobody likes to admit that an idea from “outside” might have merit, neither the Board of Appeal community at the EPO, nor the community in USA that is trying to remove problems in the US patent system. Sometimes a nudge from outside the system can get the system back on the right lines.

  16. For the posters to this blog who disagree with this- can you give an example of a method of conducting yourself towards a useful result which should NOT be patentable?

  17. Thanks Mark. We learn something every day.
    The space after the last slash is important.
    Here is my first run:
    link to google.com

    That one resulted from inputting this into Google:
    site:www.uspto.gov/go/dcom/bpai/decisions/ 101 statutory

    One interesting find:
    “[A] signal claim directed to a practical application of
    electromagnetic energy is statutory regardless of its transitory nature. See O’Reilly, 56 U.S. at 114-19; In re Breslow, 616 F.2d 516, 519-21, 205 USPQ 221, 225-26 (CCPA 1980).” from:
    link to uspto.gov

  18. It’s fairly easy to search BPAI decisions from Google. Put in the search phrase:

    site:www.uspto.gov/go/dcom/bpai/decisions/ [SUBJECT OF INTEREST]

    For example, if you want to see what the BPAI has said about applicants being their own lexicographer, you can put in

    site:www.uspto.gov/go/dcom/bpai/decisions/ lexicographer

    The decisions may not be precedential, but their guidance is useful.

  19. I wonder if the BPAI is reading the patent and trademark office journal, see the October issue with an article, Silence Is Not Always Golden: Why Decisions of the Board of Patent Appeals and Interferences Should be Precedential. Too bad they only went for “informative” and did not go all the way to “precedential”.

  20. The posting of “informative opinions” by the BPAI could be very helpful, particularly if they had some clear cut weight (and thus, for example, could be cited either by an applicant or an examiner during prosecution to bolster a rejection or argument). However, I’m not seeing anything on the BPAI or PTO site about this program, or what it means for an opinion to be “informative” (except that it is clearly not “precedential”)–does anyone know more about this, or have a link?

  21. “If I write a claim to “a method of performing step A, step B, and step C” versus a claim of “a machine implemented method of performing step A, step B, and step C,” are not both claims directed to the same invention?”

    No.

    This has been another installment of simple answers to simple questions.

  22. It would be nice of the BPAI could make a decision and live with it.

    On page 6 of the decision, I was particularly intrigued by the following statement:

    We do not believe the outcome in this case is controlled by the Federal Circuit decisions in State St. Bank & Trust Co. v. Signature Fin. Group, Inc., 149 F.3d 1368, 47 USPQ2d 1596 (Fed. Cir. 1998) and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352, 50 USPQ2d 1447 (Fed. Cir. 1999) because we interpret those cases to involve the “special case” of transformation of data by a machine.

    Perhaps it is only me, but I didn’t catch where the Federal Circuit in State Street or AT&T limited their decision to the “special case” of transformation of data by a machine.

    I also found this statement found on page 28 to be very interesting:

    (21) Although this question does not appear to have been formally decided by the Federal Circuit, we are of the opinion that claims that read on statutory and nonstatutory subject matter should be rejected as unpatentable. Id. at 1417-24.

    I would certainly like the opinion of this message board on this one, but it seems to me that very many claims to otherwise statutory subject matter also read on nonstatutory subject matter.

    For example, consider the claim of: A method of performing step A, step B, and step C. In the specification, it states that by performing steps A, B, and C in succession, then a useful result will occur. However, this claimed method also covers the method of performing step A, the step of undoing step A, step B, the step of undoing step B, and step C. This process doesn’t do anything (i.e., no concrete, useful, tangible result), so should the method of performing step A, step B, and step C also be considered nonstatutory subject matter? A claim to an engine block is the following: an engine block defining eight cylinders, pistons positioned in the cylinders (bad claim language, I know). However, this claim also covers the same engine with the cylinders partially filled with cement or a pin welded within the cylinders, which prevent the cylinders from moving.

    Basically, for most claims to devices or processes, I could argue that the claim would cover non-functional embodiments of the claimed device or processes. If the device or process is non-functional (i.e., not useful), then it cannot be statutory subject matter. Is this a fair reading?

    On pages 28 and 29, the BPAI writes:
    The USPTO rejects method claims when they are interpreted to be so broad that they are directed to the abstract idea itself, rather than a practical implementation thereof; e.g., a series of steps without any recitation of how the steps are performed might be rejected as nonstatutory subject matter as an “abstract idea, “ whereas the same series of steps, if performed by a machine, might be statutory as a practical application of the abstract idea.

    If I write a claim to “a method of performing step A, step B, and step C” versus a claim of “a machine implemented method of performing step A, step B, and step C,” are not both claims directed to the same invention? If both claims are directed to the same invention, how can one be statutory and the other not be statutory?

    Page 35 cites a portion of the script of the “Pirates of the Caribbean,” I kid you not.

    I could comment further, but I have work to do today. Essentially, this is an end run by the dissent in Ex Parte Lundgren . I am very, very glad this is being appealed to the Federal Circuit, who I hope will clarify these issues.

    I make no comments about the claims themselves.

  23. p.s. You know I can’t restrain myself. I’ve already irreverently mocked APLJ McQuade’s “well founded” logic at my own little blog spot (link to patentu.blogspot.com )

    BTW, have you had any success in OCR’ing the tilted PDF pages of the Bilski opinion or are you re-typing them by hand?

  24. Hi Dennis,

    You should mention for those that don’t routinely follow these matters that Lundgern was a split 3-2 “precedential” decision by a first panel of 5 Administrative Patent Law Judges (APLJ’s).

    Ex parte Bliski is decided by a second panel of 5 APLJ’s including the losers from the Lundgren panel.

    Bernie Bliski has already lodged his appeal with the Federal Circuit Court of Appeals (Bilski, Bernard L.” 2007-1130 PTO “08/833,892″ 1/11/2007 as reported on link to fedcir.gov)

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