CAFC Hears En Banc Bilski Case

May 8th’s en banc oral arguments in Ex parte Bilski reveal a court clearly grappling with the difficult problem of defining the scope of patentable subject matter in a way that is both administratively workable and supportive of future innovation and technology surges.  The Federal Circuit’s leeway is limited by Supreme Court precedent. The en banc panel notably focused on Diamond v. Diehr, 450 U.S. 175 (1981), and the meaning of “transformation.” 

Hitting upon an argument found in several amici briefs, the court questioned whether the statutory limits of Section 101 are necessary at all — given the administrability of Sections 102, 103 and 112. No counsel presented clear “harms” of an overbroad interpretation of a statutory “process.” (The potential issues were best described in Prof Sarnoff’s brief.)

Notes:

Tea leaves (FWIW):

  • PTO’s decision will be affirmed by shaping the facts (e.g., by calling the invention an abstract idea).
  • State Street will not be overruled.
  • The court will not implement a “machine test.”

102 thoughts on “CAFC Hears En Banc Bilski Case

  1. At the annual PTO program this afternoon on Business Methods, we received the attached May 15, 2008 memo to Examiners to ensure that examination of process claims is consistent with the Solicitor’s position at argument in Bilski on May 8. The memo will be available on the PTO website in a day or so. I’ve also posted it on my website and sent it to Professor Crouch.

    During questions and answers, someone asked TC 3600 Director (Ms.) Wynn Coggins if there “needs to be a device” to tie (or “tether” as British courts say) the process to an apparatus, and she said “yes”. Later, when the memo’s author Deputy Commissioner for Patent Examination Policy John Love was asked whether a “device need not be included” in the claim, he did not answer with an unequivocal “no”.

    To be honest, I’m not sure what his exact answer was (other than unclear to me), but he said the required “transformation” of the underlying subject matter would “usually” involve technology. I have the impression that the PTO is maintaining a “technological arts” requirement for process claims.

    Hope this is of interest.

  2. I find the Sarnosky brief to be the most intellectually dishonest and
    disingenuous, of all the briefs arguing to narrow101.

    His entire argument is predicated on the fallacious tying of Flook-Diehr
    together as the same standard. When in fact Flook sets one standard and Diehr sets
    another, with binding precedent that overruled much of Flook. Sarnosky keeps
    the old precedent set by Flook while conveniently leaving out the new
    standards set by Diehr.

    Most notably, Flooks standard for the point of novelty as a use for claim
    dissection is effectively overruled by Diehrs ruling to evaluate claims as a
    whole. Sarnosky’s convoluted logic for a so-called combined Flook-Diehr standard
    when analyzing claims for patentable subject matter goes like this:

    We can’t ignore it, and we can’t dissect it, so we dissect it!

    Like they say in Texas, that dog dont bark! And Diehr set the new standard
    and binding precedent for deciding 101 subject matter eligibility by ruling
    that:

    “It is now commonplace that an application of a law of nature or mathematical
    formula to a known structure or process may well be deserving of patent
    protection.”

    And while Diehr does clearly support Flook and earlier precedent that
    inventions that pre-empt the laws of nature, and abstract ideas are ineligible
    subject matter, (which proponents of narrowing 101 love to quote) Diehr goes on to
    say::

    “On the other hand, when a claim containing a mathematical formula implements
    or applies that formula in a structure or process which, when considered as a
    whole, is
    performing a function which the patent laws were designed to protect (e.g.,
    transforming or reducing an article to a different state or thing), then the
    claim satisfies the requirements of §101. ”

    And that my friends is the current binding law until the Supreme Court
    clearly overrules it.

    CASE CLOSED!

  3. “then a judge will eventually order the director to issue a patent on the application (or be held in contempt) because the applicant does not need to show anything and in our hypothetical the office has decided to say nothing.”

    What you are referring to good sir is a different method of having the patent issued, see the section about civil procedure. If you wish to pursue it then so be it. It still will not give you any actual, or presumed rights to the issue of a patent in the absence of the pto’s action. You will notice that in the section on the civil action procedure method of obtaining a patent that it is basically the court issuing you a patent, rather than the examiner, which is permitted, but the process still required a positive action on the part of the gov. You will also notice something strange, you are only permitted to take civil action (at least under Title 35, idk about other ones that you may know of that might allow it) after you have appealed to the board, which of course you can only do after you are twice rejected. Idk, maybe there are other civil remedies that you can tell us about, I for one am interested to hear about it.

    That said, I do not see any place in Title 35 that would allow for a judge to hold the director in contempt. What I do see is a section on civil action that allows a judge to adjudge the applicant entitled to a patent and thus authorize the director to issue a patent on compliance with the requirements of the law. Now, I’m not sure, does the part in 145 authorize the director to issue a patent as being in compliance (as judged by the judge) with the law, or does it merely authorize the Director to issue such patent on compliance with the requirements of the law (as is already the situation?!?!)?

    IRL you think the examiner would be fired. I don’t believe so. I’ll tell you why. I know of some cases that are experiencing the very thing which you are portraying as a situation that could arise (sans the judgement part, yet, because applicant’s rarely wish to forgo the option of the CAFC to instead get a civil action which they must pay for in full, See 145). And of course, all those app in the backlog? They’re just the same as any app that an examiner has done a 99.9% complete examination on but which haven’t been finished, at least in terms of being issued, or having an action rendered therefore. The only difference is workflow/docketing and let’s not even into guys letting cases sit as their oldest new by doing makeup workflow from the amended docket. That’s why they implemented the date case goals I imagine. Still, I haven’t heard about anyone getting fired for not meeting a date goal. They can just say they’re still working on that one and maybe tell the spe what the holdup with completing exam is. Maybe that hold up is that they don’t feel as if it has been searched thoroughly enough, or something else.

    Still waiting to see where or why there is such a presumption or actual right to a patent on their application. Overall, I disagree that any presumption or right exists or is implicitly present, there is merely a willingness on the part of the office to grant them, and that is all.

    I loled Bloom. That is possibly the very best snippets of a paper I’ve read in a while. I’ll read the whole thing tonight sometime. link to bartleby.com

    “It is not seldom the case that when a man is browbeaten in some unprecedented and violently unreasonable way, he begins to stagger in his own plainest faith. He begins, as it were, vaguely to surmise that, wonderful as it may be, all the justice and all the reason is on the other side. Accordingly, if any disinterested persons are present, he turns to them for some reinforcement for his own faltering mind.”

    This happens all too often on these boards amongst you law folk except it is usually happening when the browbeating is not especially violently unreasonable, but is instead more like extemely reasonable.

  4. Malcolm,

    I haete to be the bear er of bad tidings, but the new rule is, no more potty talk. I think he means us.

  5. “1. Is a franchiser a good example for a financial services patentee, or is an NPE a better example?

    2. Do financial services firms worry about long-term revenue, or will they take the money as fast as people will give it to them?

    I would appreciate your views on these two points.”

    RA,

    Gladly.

    1. I think NPE is a better example than franchiser. Most NPEs are research firms that create and license a combination of patent rights, know how, engineering/technical services and documentation. Sarnoff Labs would be an example from the electronics industry. UOP would be an example from the chemical industry. Genentech would be an example from pharmacy. These companies invest heavily in the creation of new intellectual property and earn their revenue through licensing. They don’t however, practice or manufacture their inventions. At present, NPE’s are rare in financial services since prior to State Street there was no effective way to “own” a financial service invention.

    2. Financial service firms worry intensely about long-term return on investment. Consider life insurance companies that have hundreds of billions in assets and liabilities that stretch out up to 100 years in the future. They have to think long term.

    Of course, the financial services industry is extraordinarily diverse. Traders have time horizons measured in fractions of a second. Anyone that files a patent on a financial service invention, however, has to start out with a time horizon measured at least in years given the pace of patent examination.

  6. “the sub-prime mortgage mess is not a very good poster child for your child.”

    Leopold,

    You are right. I was using it merely as a way to explore the fact that patent holders might act as regulators of their patented inventions in more constructive ways than merely demanding license fees. In that sense the conversation has been helpful.

  7. “2. Do financial services firms worry about long-term revenue, or will they take the money as fast as people will give it to them?”

    Interestingly enough, this morning I discovered a bear in my bathroom taking a number two.

  8. On an unrelated note, apparently John Whealen is leaving the PTO for academia.

    link to law.com

    John Whealen would occasionally cover for Judge Rader in my Patent Law class. Judge Rader would often end class late, on Friday nights, ending class after 8:15 (class was scheduled to end at 7:50). John Whealen, on the other hand, when he covered for Judge Rader, would start talking about a new case at 8:25…

  9. Mark,

    This may be the part where my reasoning goes too deeply into the hypothetical example. Also, I think I made some assumptions you aren’t making (possibly b/c of your greater experience in such things) which do affect the outcome. If I’m considering our hypothetical as having too many facts, then call me on it. BTW, I don’t think our thread here will continue past one or two more posts.

    I assumed (and maybe this is the difference in our views) that the patentee was not practicing the patent, but rather licensing it to all who wanted to practice it. In other words, he has no brand or goodwill at stake. (Maybe this is where I’m buying into the NPE / patent troll hype.)

    Thus, I don’t think a franchiser is comparable to our hypothetical patentee here because it is the franchiser’s brand or goodwill that is being put at risk by the franchisee’s actions, i.e. the franchiser has taken on risk by licensing his brand out to someone whose actions he cannot control.

    Second, I assumed (perhaps another important difference) the patentee is looking to earn the money as quickly as possible. The reasoning being the same as that which motivates the lottery winner to take the lump sum rather than the annuity: better a guaranteed small amount than a possibly larger but unguaranteed amount.

    As to future revenue stream, I think we can agree that the subprime mortgage isn’t going to go away; it’s just a matter of how big the market is for it. I don’t think our hypothetical patentee would think their product (the subprime) would be the cause of a future recession. Rather, the patentee might worry about their future revenue stream if a recession happened. Here, the patentee might reasonably believe a recession could help the future revenue stream b/c the borderline people who might previously have qualified for a prime mortgage now cannot. In other words, there is no reason not to take the money early by self-regulating.

    Third, I admit that I am not well versed in the financial services industry. I also assumed that the product lifecycle was very short, more like software patents than drug patents. Thus, future income not necessarily a big priority due to design-around, ease of entry, etc..

    I think it’s the first two assumptions that have the most effect here.

    1. Is a franchiser a good example for a financial services patentee, or is an NPE a better example?

    2. Do financial services firms worry about long-term revenue, or will they take the money as fast as people will give it to them?

    I would appreciate your views on these two points.

    Again, to distinguish Merck / Vioxx, the incentive there is tort law, i.e. the courts holding you responsible, not patent law i.e. the patentee holding himself responsible. If Merck still makes more on Vioxx than it costs them, a cutthroat might say there’s no incentive not to put the possibly harmful drug on the market since you’re going to make the money. And alas, I’ve rarely lost when I bet on peoples’ greed.

  10. “Merck voluntarily withdrew Vioxx from the market when its own studies showed that there was a increased risk of heart attack.”

    You cite Wikipedia for this statement, which in turn cites Merck. Interestingly, Wikipedia continues: “In addition to its own studies, on September 23, 2004 [seven days before the ‘voluntary withdrawal’] Merck apparently received information about new research by the FDA that supported previous findings of increased risk of heart attack among rofecoxib users (Grassley, 2004). FDA analysts estimated that Vioxx caused between 88,000 and 139,000 heart attacks, 30 to 40 percent of which were probably fatal, in the five years the drug was on the market.”

    I suppose it could be considered “voluntary” to withdraw your medication when the FDA is holding the figurative gun to your head. I suppose you could also call that “self-regulation.”

    There’s no question that financial product patentees would invest resources in risk modeling and self-regulation. However, you have to make a lot of assumptions before you can prove that such self-regulation would necessarily be in the public interest, or even often in the public interest.

    I’m not opposed to business method patents, but in my opinion the sub-prime mortgage mess is not a very good poster child for your child.

  11. “Should the hypothetical patentee have expected that his licensing his patent and getting his royalties would lead to these losses IN THE FUTURE?”

    RA

    Absolutely. As a buddy of mine at a major bank observed, you can think of the patentee as a franchiser. It’s in the franchiser’s best interest to set strict regulations for the franchisees to follow to preserve future income. The owner of the hypothetical subprime patent would have been highly motivated to insure that its future revenue stream from its intellectual property was not adversely impacted by a downturn in the economy. The patentee might very well have foreseen its exposure and acted to mitigate it through licensing restrictions imposed on its licensees (e.g. income verification of borrowers)

    As far as the analogy to Vioxx goes, Merck voluntarily withdrew Vioxx from the market when its own studies showed that there was a increased risk of heart attack. (link to en.wikipedia.org) Merck acted before the FDA did and hopefully, the public benefited. If anything, this supports the argument that financial product patentees will invest resources in risk modeling and self regulation for the same reasons that Merck did.

  12. legion writes “I use multiple pseudonyms because I don’t want people to get to know me.”

    For what it’s worth, i think that’s perfectly fine. I know some folks here are big on figuring out one’s “agenda”. Not me.

    All I ask is that commenters don’t use the default “anonymous” because if more than one commenter uses the handle it leads to confusion, which in turn leads to acrimony, which ultimately causes the breakdown of society, which leads to increased interest in violent video games which is the worst thing ever.

  13. Dear i am legion ,

    Thank you for your comment.
    I wrote, “It is primarily by this latter means c)…”

    You obviously are among the exceptions.

  14. JAOI,

    I use multiple pseudonyms because I don’t want people to get to know me. I don’t think my comments are chickensheet or dimwitted, though I have lately realized that my posts responding to e6k are useless. You’ll have to take my word when I say that you’ve explicitly agreed with my posts more than once. I am quite far down on the totem pole here at my law firm and would like to work my way up without this stuff coming back to haunt me. To paraphrase Alan Dershowitz, I want to be able to deny, deny, deny. If it makes me cowardly (perhaps an adverb that should be in your list), so be it.

  15. –“Is there some incentive to regulate volume that I’m not seeing?”
    How about over $200 billion in losses and counting?–

    Mark,

    Should the hypothetical patentee have expected that his licensing his patent and getting his royalties would lead to these losses IN THE FUTURE? You can’t ding the patentee in hindsight.

    In addition, this isn’t incentive for the patentee to regulate volume; he still gets paid when the mortgage issues.

    If you can hold the patentee liable in hindsight, maybe that’s an incentive to self-regulate. But I don’t know enough about the economics of such things. Did Merck make more off Vioxx than it’s costing them now? Plus, this incentive is through tort law, not through patent law.

  16. This is Part I of a multi part miniseries of comments. Part I is an observation follow up to Malcolm’s and curious’s comments posted last Friday.

    Various means of signing a comment on a blog are comprised of:

    a) Sign your comments with real name, thus allowing other commenters to, for example, email you directly.

    b) Sign your comments with a chosen pseudonym, thus allowing other commenters to get to know you and/or your opinions and agenda, i.e., e.g., whether you are for horsesheet onerous patent reform or against it.

    c) Sign your comments with a generic pseudonym, e.g., “anonymous,” thus joining a pool of others who also sign their comments with the same “anonymous,” thus not allowing other commenters to get to know you and/or your opinions and agenda, i.e., e.g., whether you are for onerous horsesheet patent reform today and against it tomorrow.

    It is primarily by this latter means c) of signing a comment that commenters sometimes post chickensheet, dim-witted or otherwise useless and/or offensive comments.

    This is Jaoi™ and I approved this message, and I’ll have more to say in Part II on Wednesday, coming up. Each Part thereafter will be increasingly more meaningful to IP professionals and inventors, as it Tracks Down scandalous Patent Pirates.

  17. Black Scholes is one thing. Another is “method” acting or the “focussing” methods that sports practitioners perform prior to performing. In their day, these things were “new” (102), and more recently they have been rigorously and systematically taught from textbooks, in places like schools(112). Surprisingly, they have proved to be enormously successful (103). So, they could have been “patented” right? But, I have difficulty with the law inviting people to lie to the court. Depose an alumnus of the Lee Strasberg school and ask what he was thinking. Is he to tell the truth and be found to infringe? Or should he better act out a lie? Or is there still nothing wrong with patents on mental acts?

  18. Mr. Large Hirsute Rodent,

    “Section 101 requires that an invention be new and useful. In my view for process claims it impliedly requires a sufficient description of every step of the process claimed.”

    “Sufficient description” sounds to me like 112.

    “The rhetorical question for you is:

    The Black Scholes formula encapsulates a process for calculating the price of an option given certain data. Do you think that the Black Scholes formula should have been patentable as a process?”

    Yes, I believe it should have been (assuming, of course, that it otherwise passed the tests under 102, 103 and 112).

  19. “Do you think that the Black Scholes formula should have been patentable as a process?”

    That’s an easy one. Of course it should. (e.g. A method for pricing an option comprising the steps of….) Why shouldn’t it? It’s quite common to have equations recited in claims for inventions in a wide variety of arts.

  20. No need to get excited about defining “obvious”. It’s Latin for “lying in the road”. Fits to fundamental patent law principles, because no patent should stop the PHOSITA from practising in a particular technical field what was already lying in that road of technical progress which that PHOSITA was already travelling along. As to mental acts, I put my faith in the collective common sense of the CAFC, to draw back from announcing as patentable the wildest extremities of “everything under the sun contemplated by man”. Not sure that recognising the patentability of methods of doing business will further the national interests of USA, Inc. Manufacturing is increasingly done outside USA already. What’s next? Services. Out of London, England perhaps? Particularly if no new service product can be introduced in USA until an exhaustive patent infringement clearance study has first been performed. There might just be a sensible reason, why ROW doesn’t do patents on methods of doing business. But take no notice of me, all you readers with a vested interest in having everything under the sun draftable, fileable, prosecutable and assertable. I might be just another Brer Rabbit afraid of the thorn bush.

  21. “Do you think that the Black Scholes formula should have been patentable as a process?”

    I presume that process could be performed by hand with pen and paper or even more rudimentarily, in your head. If so, under the proposal I make above since all of the steps could be done as a mental process then the claim is rejected (also note that all of the limitations would be disregarded in terms of contributing to patentability).

    I would also say that is reasonable.

  22. “The word “obvious” under its “literal reading” is a somewhat more difficult threshhold to meet.”

    I can’t decide if you mean it’s more difficult for the examiner/defendant to meet the threshold of showing the invention is obvious or if it’s harder for the applicant/plantif to meet the threshold to get over obviousness.

    I would only agree with the later. The literal reading of 103 involves any one of these:
    1. easily seen, recognized, or understood; open to view or knowledge; evident: an obvious advantage.
    2. lacking in subtlety.
    3. Obsolete. being or standing in the way.

    Now, considering that I can easily see, recognize, and/or understand most of the inventions put before me based on nothing but a clear couple of references and my current knowledge guess what that would make them? Perhaps you prefer Mirriam web?

    easily seen, discovered, or understood; specifically : readily apparent to a person of ordinary skill in a particular art considering the scope and content of the prior art —see also PATENT

    Basically, the courts have made up their own definition of obvious just for patents which is fine since congress doesn’t feel like getting off it’s duff. I take notice of the “easily … discovered” part especially in regards to literal meaning and what impact that meaning would have on the implementation of 103 rejections.

  23. Funny you guys should be wondering about it, my dictionary just happens to have a definition:

    abstract:
    1. thought of apart from concrete realities, specific objects, or actual instances: an abstract idea.

    That would mean that it is an idea thought of apart from concrete realities, specific objects, or actual instances. Not too hard, I don’t see why everyone is having such a problem.

    mental process
    noun
    (psychology) the performance of some composite cognitive activity; an operation that affects mental contents; “the process of thinking”; “the cognitive operation of remembering”

    mental
    4. performed by or existing in the mind: mental arithmetic; a mental note.

    Now, I would say that it’s fair to see that everyone can see what the two terms “mean”, and that the only legal question for “mental process” which is then before us is: Do we want to disallow people from claims that MAY be only performed in the mind, only disallow people from claims that MUST be only performed in the mind, or only disallow people from claims that involve mental steps (or make that mental step portion not be contributory to patentability).

    Imo, it would make for clearer policy if we could just go with the former and have all claims clearly directed towards the concrete. And, at the same time have the mental process portions not be contributory to patentability.

    Then, we turn to “abstract ideas” and a closely analogous situation arises, the meaning of the terms is clear, then the legal question is: do we disallow claims to things that are ONLY abstract ideas, that MAY be a completely abstract idea, or ones that simply involve an abstract idea somewhere in the claim.

    Again I would say go with the option of MAY and make the whole thing a lot clearer for everyone, surely if you have an invention that is not purely an abstract idea, and you had claimed it such that the claim could be construed as a purely abstract idea then you could simply amend the claim so that it captured the non abstract portion as well. And, of course, at the same time, having any purely abstract idea portions of a claim with nonabstract portions not contribute to patentability.

    I would venture to say that this is in the original spirit of the patent clause as well as the recent Act, even within current general understanding rather than my wild ideas about them. Further, it would make for a very much simplified system and economically benefit the country by providing clear guidance to all.

  24. “I would simply declare the 101 door be flung wide open as long as an invention produced a useful result.”

    Section 101 requires that an invention be new and useful. In my view for process claims it impliedly requires a sufficient description of every step of the process claimed.

    The rhetorical question for you is:

    The Black Scholes formula encapsulates a process for calculating the price of an option given certain data. Do you think that the Black Scholes formula should have been patentable as a process?

  25. Mr. Bloom,

    Your comments fairly point out the problem. What is and what is not a “mental process”? What is and what is not an “abstract idea”? Reasonable minds can differ, as I believe our respective readings of the Bilski Claim 1 illustrate.

    Absent a definite and understandable definition of these two terms (and perhaps some of the other terms that have cropped up in 101 jurisprudence), all I can see is a series of future ad hoc determinations that continue the current state of affairs. Pesonally, were I the “Supreme Justice for a Day” I would likely punt this issue back to where it really belongs…Congress. If for some reason it refused to act, then I would simply declare the 101 door be flung wide open as long as an invention produced a useful result. At least this approach would start to create an evidentiary record of sorts informing Congress of subject matter being presented to the PTO. Using Comiskey as an example, and assuming it eventually got past the 102, 103, 112 gauntlet, one would then have to ask do we really want to afford patent protection for subject matter relating to the an important part of our legal system, i.e., the promotion of alternative methods for resolving legal disputes? A somewhat similar subject matter question was previously addressed by Congress when it considered surgical methods. It likewise addressed a subject matter question when it enacted the Atomic Energy Act (or at least this is my recollection).

  26. I think I’m with Malcolm on this one – in this context, “initiate” and “identify” seem pretty abstract to me. How do I know when I’ve initiated a series of transactions? Do we have to wait until a second transaction is initiated before we know that a series has been initiated? What does it mean to initiate a single transaction, much less a series of transactions? To think about doing it? To write it in my daily planner? To send an e-mail to my assistant to set up an appointment? When do I infringe this claim – the instant that I plan to initiate that second series of transactions.

    Similarly, what does it mean to “identify market participants having a counter-risk position”? Do I have to know that they have a counter-risk position to identify them? Do I even have to know that they’re market participants? Do I have to put them on a list titled “market participants?” Or is it enough to simply say “Hey, there are Bill and Fred?”

    There is certainly something (probably several things) about this claim that makes it awfully difficult to imagine that it could ever have clearly-defined limits, even assuming that it is read “in light of the specification.” I haven’t decided yet whether it’s a Section 112 problem or a Section 101.

    Perhaps a “mental steps” approach makes sense. Here, the entire claim can apparently be performed in your head, since nothing ever has to actually happen. I wouldn’t have any problem with a decision that says the claim is therefore abstract and unpatentable.

  27. Michael Valentine Smith wrote: So, which way is it? On one hand we get a lot of these attorneys (rightfully so, in my opinion) complaining that all the office will do is reject things and will never allow anything without it almost being a picture claim (again that $tup1d idea of reject = quality). Then, on the other hand we get ones like you that complain the office issues too much and that “90%” of the things we issue are invalid because there is prior art.

    The answer is both, right?

    The office writes rejections to reject broad claims even when the office did not find the prior art to support the rejection.

    The office does not have the resources to do a proper search (typically assigning a single examiner to spend minutes or a few hours on a search when a litigation team would spend weeks researching the prior art), so the claims that eventually issue may well read on the prior art.

  28. “KSR helped but didn’t come close to a literal reading of 103″

    I’m wandering far from the initial post topic and replying to one of the most unhelpful posters here, but…

    The word “obvious” under its “literal reading” is a somewhat more difficult threshhold to meet. A dictionary definition of the word informs that something must be clear, easily understood, or apparent to be obvious (the term also has widespread use as a light insult). Under this definition, something literally “obvious” would be very quickly comprehended/envisioned by those skilled in a relevant art, based on thier existing knowledge. If anything, the courts have made the “obvious” threshold slightly easier to meet for invalidating patents, by changing the word to mean something closer to “routine,” “predictable,” or “motivated.” None of these terms appear in the “literal reading” of “obvious.”

  29. “I did an evaluation on patents from the PTO.GOV database, and more than 90% of them should have been ruled invalid for reasons of prior art.”

    Maybe Wayne selected from that set of 140,000 patents that Sloney was referring to.

  30. “They are not to me in any way abstract,”

    I guess it depends on how you define ‘abstract.’

    “the claims of about 140K issued patents employing one or both of these terms ”

    As the only steps? Identifying and initating? As the only steps? 140,000 issued patents?

    I don’t think so, Slonebaby.

  31. Wayne….

    Wayne…

    You still out there??

    Above (@ May 09, 2008 at 10:03 PM) you stated “Because I did an evaluation on patents from the PTO.GOV database, and more than 90% of them should have been ruled invalid for reasons of prior art.”

    Well, we are STILL waiting for some FACTS OR EVIDENCE of this a$$inine assertion. Or are you just another one of these bitter 1d10t$ that love to bash the office about allowing garbage without ever presenting a shred of evidence other than to say “It’s out there” and “There is prior art that shows that” without ever having to actually SHOW the prior art??

    My guess is that you & yours are complaining that all patents are obvious, unless they are yours and then you complain that the office won’t ever issue anything.

    So, which way is it? On one hand we get a lot of these attorneys (rightfully so, in my opinion) complaining that all the office will do is reject things and will never allow anything without it almost being a picture claim (again that $tup1d idea of reject = quality). Then, on the other hand we get ones like you that complain the office issues too much and that “90%” of the things we issue are invalid because there is prior art.

    One of you HAS to be wrong. Which is it? I am betting on Wayne & his like until I see some evidence. And, personally, based on all the cases I see, it is not those in Wayne’s camp.

    Thanks for putting up with the rant. But, I get sick of these types.

    MVS

  32. Per Mr. Mooney:

    “I have [a] difficult time discerning anything concrete in the terms “identifying” or “initiating.””

    Which, of course, suggests that the claims of about 140K issued patents employing one or both of these terms are either “abstract” or fail to fulfill the requirements of 112 because the terms are not “concrete”.

    Certainly my comment here is a trivial attempt at wordplay, but despite Mr. Mooney’s comment I do have a fair idea what the two words he notes each mean in the context of Bilski’s Claim 1. They are not to me in any way abstract, though it may later prove through examination that they fall short of the requirements set forth in 112.

  33. Wayne is sitting next to me at the mental facility. He didn’t score as well on his last head examination as I did.

    Hey guys, guess what I did this afternoon? I looked over the last million patents that were issued, and you know what? They were all invalid on grounds of prior art! Why doesn’t the office know this?!?!?!

    “Indeed a good argument could be made that the current operations of the Patent Office are unconstitutional.”

    I agree but most likely for different reasons. In the meantime the office does the best it can.

    In all fairness though, you’ve got to admit that it’s not the office’s fault if 103 is so narrowly interpreted (KSR helped but didn’t come close to a literal reading of 103), a mockery is made of 112, and the statutory classes of invention are regularly abused, amongst many other things. You have to lay that at the feet of the courts, and you have to lay the putting up with the courts interpreting things like that at the feet of congress. As with pretty much everything wrong in the US gov. it stems from congress’s inaction. But hey, they have a lot on their plate you have to admit.

  34. Wayne wrote: I did an evaluation on patents from the PTO.GOV database, and more than 90% of them should have been ruled invalid for reasons of prior art.

    Assuming you were looking at the Business Methods art unit, this statistic should not be a surprise.

    The issue is, however, that it takes 5 million dollars to litigate a patent. With the presumption of validity being intepreted to require Clear and Convincing evidence, even 5 million dollars may not be enough to persuade a jury that an allegedly invalid patent is clearly and convincingly invalid.

    If you can license an allegedly invalid patent for 50k, the prudent business person will license an allegedly invalid patent for 50k rather than risk the massive costs of litigation.

  35. I agree with Mr. Slonecker, 102, 103 and 112 can handle these claims.

    And Mr. Mooney, where in Title 35 are the “concrete” and “real word problem” tests which you allude to?

  36. “At one point in the proceedings it was proferred that Claim 1 was nothing more than an abstract idea. I have a difficult time discerning the abstraction.”

    I have difficult time discerning anything concrete in the terms “identifying” or “initiating.”

    “Anything less invites ad hoc decision making that may stymie innovative and useful approaches to solve real world problems.”

    LOL. Is making money a “real world problem”?

  37. Bilski Claim 1:

    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.

    It is against the above backdrop that Bilski was argued. Having listened to the proceedings I am more firmly convinced than ever that the patent no-no’s of “mental processes” and “abstract ideas” are terms that at this point in time are totally devoid of meaning. Neither the applicant’s counsel nor the solicitor proferred any insight into what these terms mean or should mean. The court seemed equally ill at ease with the terms. Yet, out of this morass of what I view as largely meaningless input the court is somehow supposed to provide “divine guidance”.

    At one point in the proceedings it was proferred that Claim 1 was nothing more than an abstract idea. I have a difficult time discerning the abstraction. At another point it was proferred that the claim was no more than a mental process. I have the same difficulty discerning how this is a mental process.

    Unfortunately, the audio file did not include the arguments presented by the two amici. Since no mention of 102, 103 and 112 is contained in the audio file, I assume that it arose at some point during the amici presentations.

    Until such time as someone, anyone, can present a coherent definition of what the two terms mean, I am inclined to leave the 101 door wide open and use the tried and true 102, 103, 112 methodology to ascertain what is and what is not patentable. Anything less invites ad hoc decision making that may stymie innovative and useful approaches to solve real world problems.

  38. –well-served by the incentives of patenting because patents would encourage earlier disclosure to the public and more cooperation in introducing new securities in the industry.–

    –Sharp observation. If subprime mortages had been patented and if the patent holder had regulated their growth to temper the irrational exuberance of the market, would the crisis have been averted?–

    To the latter, I think the answer is no. The patentee only makes $$ if a subprime mortgage is issued, so his incentive is to flood the market with them, not prevent people from getting them. Mark, it looks like you’re discussing profit margin per sale vs. volume, and in mortgages I am guessing you would want big volume, not big profit per sale, because the purchaser (the subprime guy) can’t give you a big profit margin. Is there some incentive to regulate volume that I’m not seeing?

    To the former, I’m not familiar with the way financial services work. Why is cooperation needed? I don’t see lots of problems with securities being introduced already. The example you gave (bundling property with insurance) sounds more like a question of justice (making sure the profit and the risk stay together), but much of the financial services industry is based on separating risk and profit.

  39. “This last subprime collapse could be characterized as an example of ‘competitive destruction’”

    Michael,

    Sharp observation. If subprime mortages had been patented and if the patent holder had regulated their growth to temper the irrational exuberance of the market, would the crisis have been averted?

    This alone could justify business method patents.

  40. A method comprising:
    logging into a commenting field of a blog;
    posting a retarded comment in said commenting field; and
    repeating said posting until said blog is ruined.

  41. Wayne, I invite you to take this link to a decision of the English Court of Appeal, Servier v Apotex, published yesterday. It is only 6 pages and explains why it is that examination in the Patent Office isn’t the cure you (and others in the USA) fondly suppose it to be. With parameter claims, for example, it takes an opponent to reveal to the tribunal that the claimed subject matter is spurious.

    link to bailii.org

    Readers might enjoy the forthright language employed by the court, for example at para 9. Reading the decision with the German litigation system in mind (no cross-examination there, for example, and a court-appointed “expert” finds the facts) is also educational. Currently, the waiting list for the German appeal court on patent validity (BGH) is five full years. In this English appeal case, the first instance decision issued at the end of last year. Less than a year from issuing proceedings to first instance closure, and again in the appeal instance (end of the road) is standard, these days, at least in London.

  42. Wayne:

    Please post a link to your study.

    Were these patents some of the early business method patents?

    Where and how did you locate this prior art? Was it non-U.S. patent prior art?

  43. I think that this case will settle very little. Why do I think that? Because I did an evaluation on patents from the PTO.GOV database, and more than 90% of them should have been ruled invalid for reasons of prior art. Whether or not this case makes changes on what is or is not patentable, it doesn’t address the prior art issue, and the Patent Office’s inability to to determine what is prior art. Until this is addressed, the system is not going to work in the way intended by the Founding Fathers.

    Indeed a good argument could be made that the current operations of the Patent Office are unconstitutional.

  44. Further to Malcolm’s e-mail, I believe that all of the following names are still available to PatentlyO posters: Weasel, Mothball, Pinto, and Flounder.

  45. Sorry guys, these are process claims at issue here. All this printed material discussion will have to wait until someone appeals a nonfunctional descriptive material rejection.

  46. I’ll never quite understand the “anonymous” commenters who can’t find the 1.5 seconds it takes to come up with a signature other than “anonymous”. It doesn’t even have to be clever. You don’t need to stick with the same signature every time. Even typing in some random letters is an improvement.

    We’re supposed to be creative professionals here.

  47. amen, well ././.

    or why economics *should* be driven by law, not creators & inventors & innovators – legal questions? what did we do before all of this theory? … with the timing of the PTO appeal, no doubt the American system has been weakened by all of this puffery …

    if you *knew* the hits, we wouldn’t need a system “to promote the progress”!

    “The pertinent question to be asked in those cases is what goal is achieved by allowing the patenting of information per se? Let’s not restrict the consideration to novels of merely entertainment value – extend it to technical and non-technical writing, as well as other forms of un/entertaining information (pictures, video, etc.). In all cases, where is the actual novelty? What policy objective is served by allowing a monopoly on that novelty?

    I don’t consider copyright law to be a ‘distraction’ here, as it could very well be the main policy reason for excluding novels, pictures, etc. from patent protection. The question of why copyrighted material should also be protected under patent law is anything but irrelevant here.”

  48. Dear “anonymous”:

    Since you have been reading Patently-O for a long time, please allow me to ask a serious question:

    Why do you read my comments?

    Why don’t you simply scroll past all stuff you don’t like? I scroll past some stuff I’m not interesting in, and it is easy to do?

    Why do you read my comments?

    Why don’t you ask Professor Crouch to post the poster’s name on top of the comment and then it would even be easier to skip them. And why didn’t you think of that recommendation if you are so troubled?

    I’ll tell you why; you are being disingenuous – you have disparate views to mine, nothing more. You speak your piece and I’ll speak mine. This is America.

    I forbid you to read any more of my comments. There, problem solved.

    PS:
    FYI, I guarantee you I have as much serious interest in patent law as you do.

  49. Nope. No Cisco affiliation. Just a longtime reader who’s interested in patent law and tired of seeing 2 posters ruin the best patent law blog’s comments section by vomiting up whatever the voices in their head happen to be telling them that day. Take your comedy act elsewhere. Please.

  50. Mr. CliveFenster,

    Lucky you – you didn’t have to wait for next week for more info about America’s blasphemous anti-American patent system conspirator.

  51. Dear “anonymous”:

    Let me guess, hmmmmm, could you, maybe, work for CISCO? Is your name Tricky Ricky Frenkel?, NO, NO, its coming to me — is your name maybe CISCO GENERAL COUNSEL MARK CHANDLER, who, according to the March 27, 2008 “businessweek” article I read said this:

    “Cisco General Counsel Mark Chandler even cited the [scandalous Cisco Patent Troll Tracker] blog as a good independent source of information while in Washington lobbying for changes to patent law that would rein in trolls, unaware he was plugging the work of a Cisco employee.” [insert added]

    Please see. “Busting a Rogue Blogger”:
    link to businessweek.com

  52. Je sus, if this is intellectual dribble about books being patentable is the “high quality” discussion you’re referring to then we’d be better off if I hijack the thread. No, things are not patentable ONLY because they are a manufacture, novel and non-obvious. It’s as if in the current day people turn their back on the statutory and/or constitutional limitations on what is patentable even though those limitations were created specifically to address the absurdities of previous patent systems that had come before it. Congressional action to reel in the lawyers is so sorely needed in patent law today it blows my mind.

    DC, thanks, if it were anyone but you I’d have derailed the thread into the absurdities of design art furthering the art of design art if for no other reason than to avoid the “quality” type discussions being presented above. Dear go d, people acuse my thoughts on 112 etc. to be outrageous but even their outrageousness pales in comparison with this mess.

  53. If DDC were willing to ban even one poster, the quality of the comments thread would improve immensely.

  54. Dear Max,

    Re:
    “I just want a patent system I can be proud of, and defend to a public that is increasingly sceptical of the value of any patent system.”

    How about this:
    You be as proud as you can be, and you defend your European patent systems over there, and leave your 2¢ out of our patent system, and please fight the urge to make derogatory implications about anything American.

    I’ll be proud of and defend the American patent system over here, and I won’t cast “second-rate” aspersions at anything over there across the pond.
    Is that fair enough? Is that a fair truce?

    Be that as it may, I Just mixed my first Happy Hour Bourbon Manhattan – my customary way of giving thanks for enjoying the miracle of life yet another day in our great Nation – despite all her flaws, we are blessed.
    I wish you All good health and happiness – Cheers!, Prost!, and thank you who did for reading my comments today.

    And here is another toast:
    >Here’s to the Army and the Navy,
    >And to the battles they’ve won.
    >Here’s to America’s colors,
    >The colors that never run.

    And another we all over here would do well to remember as we strive to right the wrongs:
    Our country! In her intercourse with foreign nations may she always be in the right; but our country, right or wrong.

    * * * * *

    Mr. CliveFenster,

    Re your comment on Wednesday’s John McCain thread:
    “A screen and a half of screed, and only at the end was Cisco mentioned. I was on the edge of my seat, fearing (hoping?) the furnace of JAOI’s jihad had at long last grown cold.”

    I take it you did not like my comment on McCain’s thread:

    link to patentlyo.com

    Please feel free to read it again and give me a harsh critique. You may notice that I did not once today (heretofore) mention “Cisco System Inc.”
    But never fear, I’ll try to put something together for you over the weekend to post next week about that corporate blight on the American patent system and its greed driven horseshit “Coalition on Patent Fairness” (next time you may want to be more cautious about what you hope for õ¿Q).

    If I weren’t in such a good mood now I’d say to you, “jihad this.”

    With all due respect Mr. CliveFenster, you would do well to choose your words more thoughtfully lest anyone begin to refer to you as a Reverend Jeremiah Wright disciple.

  55. Dear Professor Crouch,

    All this posting today gave me another “flash of genius” invention (meaning I was not even trying to invent — Just trying to be entertaining and helpful — I guess you can tell that I like writing):

    You know that silly looking computer spam avoidance stuff the commenter has to type before her or his comment gets posted?

    Well, here’s the thing to, for example, increase interest, readership etc. Supposed Patently-O (or some other web place) pays out like a slot machine some prize if the commenter gets, say, a full house, or 4, 5 or 6 of a kind, or spells out the “magic word” and Groucho’s famous stuffed Duck drops down with $100. You can add color similar to a card suit for a flush, or cherries and other symbols.

    You could email the winners a gift certificate or some other prize or coupon, or you could let them use a larger selection of words, or you could Just announce that they hit a randomly rare statistical combination.

    Incidentally, earlier today, my silly spam avoidance stuff spelled a word that would be spammed if I tried to write it. Shame, shame on the spam filter.

  56. Step Back,

    You’re interleaving several issues at this point. First, you use a book with a novel and unobvious story in your analysis of patentable subject matter under 101 v. obviousness under 103. The book in this analysis is protected by copyright, and therefore a legitimate policy question exists as to whether further protection under patents is necessary.

    Then, you turn to software. Software raises a DIFFERENT issue, in that software has potential novelty and utility beyond the exact source code. When you patent software, you’re after what the software does, rather than what it is (‘what it is’ is granted protection under copyright). A ‘book’, as addressed above, is not an analogous situation because it has no novelty or utility beyond the exact use of words – as we all known, changing a few lines or swapping a few words can drastically affect the quality of the work.

  57. Dear step back stepback,

    Are there two of you two of you?

    Are you a two-step back?, or is you two-stepback?

  58. Stepping away from copyrights, and back to patents, consider this:

    35 USC 101 does not talk about the claim, but rather about the who and his/her act of inventing. (Whosoever invents …)

    So the focus needs to be not on how the claim is cleverly drafted, but rather on what the inventor did that constitutes his/her act of “inventing”.

    In the case of writing a good, nonobvious who-done-it story, the creator did not invent paper, did not invent the printing press, did not invent the alphabet or the idea of rearranging its letters on a page. The essential part of what the novelist creatively produced is a new way of messing with your head; a new mental process that is to take place almost entirely in your head.

    (BTW, can I patent this comment? After all, I’m messing with your head. :-) )

  59. I’ve had no luck with hearing the oral argument:
    “Listen to the oral argument in the en banc hearing of In re Bilski here. “
    My PC machine tries but I only get a few words.
    I suspect it is because the file is 57MB long.
    I’ve noticed the audio link on the CAFC web site broke down the audio file into two parts but I’ve still had no luck.

    Is it the 57MB?, or are too many trying to hear it at the same time?, or is it me?

  60. Thanks all for replying in a civil manner.

    As to copyrights, how does it protect software recorded in computer readable media (In re Beauregard) where the software has been washed in a clean room process and/or ported to a new machine and is thus no longer substantially similar and also cannot be said to have been copied or derived? No. Copyright is a distraction. It does not answer the invention issues as does patenting. To be copyrightable, one only needs a “modicum of creativity” (which case was that?).

    Patents on the other hand require “nonobviousness”. Not the same as modicum.

  61. Dear curious,

    I don’t think so, but I’m Just an ordinary inventor. However, I do recall one of my inventions being rejected by the PTO because it was alleged to be “printed matter.”

  62. Dear “well,”

    I see my mistake; please accept my apology for jumping off half cocked.

    It is Friday, thank goodness, and rapidly approaching happy hour, so please allow me to make an admittedly lame excuse: My comment to you, although quite unfounded, led perfectly into the more substantive comment I was drafting.

  63. JAOI,

    I’m well aware of the distinction between copyright and patent law, thank you. In fact, my argument relies on the distinction. What I was addressing was ‘step back’s comment about the copyright issue being a ‘distraction’ to the question of why books, as a policy matter, are unpatentable under 101.

    My contention is that the existence of copyright law could very well be the policy reason for not including books under the umbrella of patent law protection; ergo, copyright is not irrelevant in this argument, contrary to ‘step back’s characterization.

  64. Dear “well,”

    Re:
    “The question of why copyrighted material should also be protected under patent law is anything but irrelevant here.”

    Copyrights are not protected by patent law. Copyrights are protected by an entirely different set of laws, and are administered to by and entirely difference Agency.
    Please see link to copyright.gov

    This is the Patent & Trademark Office link to uspto.gov

    * * * * *

    Greetings IP Ladies & Gentlemen; I bring you glad tidings:

    With all due respect, you all out there in Patently-O land are missing the boat (that’s what my first girl friend said to me).

    Now that I have your attention, I can’t remember when I figured out the Patent-Boat, but it was a long time ago, decades.

    Copyrights are inherently fair, and ©s promote the useful Arts.
    For example, if I take and © a picture of, say the Empire State Building at midnight under a full moon with a particular Nikon, ISO 100, etc, etc., no one can copy my picture. However, if a photographer likes my picture, he can set up and take the same picture under the same conditions with the same photographic apparatus, and he too can © his picture, do what ever he wants with his picture (except pass it off as mine) and he would not be in violation of my ©.

    Patents are in an altogether different Boat:
    Patent are inherently UNFAIR, but PATENTS DO PROMOTE THE PROGRESS OF SCIENCE. Who would argue that this is fair: Some poor independent would-be manufacturer may invent a Frisby, and spend his last nickel setting up to manufacture Frisbees, while an earlier Frisby inventor’s patent was pending but not published, and the poor independent would-be manufacturer might have to split the Frisby pie, e.g., via a license deal, but only if the first inventor allowed him to do so, even though the would-be manufacturer didn’t copy the first inventor’s Frisby and even though he invented the his Frisby independently (but after the first Frisby inventor).

    HERE’S THE THING:
    Fair does not exist in the real world. Science does. Progress does, but not fair. Some people die horrible deaths at a young age and some (reportedly) live to be 600 years old. Go figure.

  65. anon, were you counting? I recall Judge Moore asking maybe 2 questions (maybe a few more, if you count follow-up), I don’t recall Judge Gajarsa asking any questions, though he may have. Judge Newman asked 2 questions, if I recall, though they weren’t really questions. Judge Bryson asked a few different iterations of the “what is a transformation” question. Judge Dyk asked 2 questions that I recall: (1) where does Bilski’s “useful, concrete, tangible” argument come from, and (2) [to the PTO] what was the PTO’s practice in 1952 regarding patentable subject matter, once the word “process” was added to the statute. I don’t recall Judge Gajarsa speaking, though he may have. I know Judge Prost asked a few questions.

    Many of the questions (I don’t recall who asked each of them, though Judge Michel asked several) were just asking the lawyers what their positions were. I heard “what is your test” or “what rule would you propose” multiple times, and also “should we or shouldn’t we overrule State Street”?

    There were a few followups and a few requests for clarification, but generally it was not what I would call a “hot bench,” and I don’t think anyone other than Rader really let on much about what s/he was thinking of doing to decide the case.

  66. I was going to comment on the supposed obviousness of a novel, but MaxDrei beat me to it.

    The pertinent question to be asked in those cases is what goal is achieved by allowing the patenting of information per se? Let’s not restrict the consideration to novels of merely entertainment value – extend it to technical and non-technical writing, as well as other forms of un/entertaining information (pictures, video, etc.). In all cases, where is the actual novelty? What policy objective is served by allowing a monopoly on that novelty?

    I don’t consider copyright law to be a ‘distraction’ here, as it could very well be the main policy reason for excluding novels, pictures, etc. from patent protection. The question of why copyrighted material should also be protected under patent law is anything but irrelevant here.

  67. “Several judges said nothing, and most asked one or two questions.”

    Two said nothing, Mayer and Schall. All others participated actively (more than “1 or 2 questions”).

  68. “If “mental process” is purely abstract and has no objective physical impact on the real world (as opposed to impacting the fictional world that exists in the head of one practicing a given mental process), then why should we even bother debating the patentability of such stuff. Let the Applicant have his claims. How is he going to prove that anyone infringes by secretly “thinking” in their heads”

    Oh, I’m sure some highly paid lawyers could cobble together an argument that passes the laugh test.

    “even if they do, what is the true value of the damages, one dollar?”

    What is the value of the damage that a lawsuit or a serious threat of a lawsuit can do to a company?

    The facts of Metabolite Labs presented this issue straight on but (for reasons that still escape me) the parties failed to address until the petition for cert! Remember, in that case the patentee construed the claim to be infringed by merely *thinking* about the relationship between the test results and the associated condition. For some reason, the patentee was not concerned about how to calculate damages under those conditions.

    As MaxDrei points out, the EP uses the “technical” hook to weed out certain forms of undesirable claims and, vitriolic or not, Aharonian has pointed out some of the problems with that approach. Given the nearly infinite range of possibilities of methods to be patented, no solution is going to be “perfect.” We are left with policy considerations as to whether the solution is “good enough” and the courts are there to address any oddities that don’t quite fit.

    I’m not surprised that the judges at the CAFC were not amused by this case. The “invention” — regardless of whether it is 101 subject matter or not — is a pile of crapola. You can be fairly certain that they don’t want to see a lot more cases addressing this sort of dreck. They might, however, want to see a better set of facts that addresses similar issues …

  69. Dear bpai,

    Re:
    “the BPAI has issued three precedential opinions in 2008”

    I’m sure no one would object if I suggest that you should feel free to specifically identify the three opinions to which you refer. Despite some misleading comments you may have read, I believe some of the high-quality “threadjacking” hereon are one of the reasons Patently-O enjoys the widest readership in the IP community.

    Incidentally, may I respectfully suggest that you resist making “snarky” comments less you too be charged with contributing to the “greatly declined value” to which you refer and cite.

  70. JAOI believe it or not, I do have some sense of the way the patent system, any patent system, can bankrupt private inventors. And we were once friends, back when I too criticised eBay. But I fear that you are no different from the many private inventors over here, whose sense of injustice increases in proportion to the magnitude of the personal resources they have invested in their patent portfolio. Now me, I’m disinterested. I make money when I file and prosecute, and I make just as much when I file one of my frequent opposition briefs at the EPO. I just want a patent system I can be proud of, and defend to a public that is increasingly sceptical of the value of any patent system.

  71. I suppose that it’s tricky considerations like this that prompted the Framers, in 1973, to provide in the Convention (the European one, that is) that “Schemes, rules and methods for performing mental acts, playing games or doing business” are to be excluded from being regarded as “inventions”. But, StepBack, I’m not really convinced that a blockbuster novel with an ingenious plot is “obvious”. The process of making a novel, by putting alphabetical letters on paper is old, but the new arrangement of letters is neither old nor obvious. The EPO deals with that ticklish problem by finding new stuff nevertheless unpatentably obvious unless it solves a problem that is “technical”.(Cue for vitriol from Greg Aharonian.) Can’t see the CAFC following the EPO down that particular road. Can you?

  72. Dear step back,

    Re:
    “The ad homenim flame wars that flare up here are a huge distraction.”

    I agree with you – for example, as I explain below, Mr. CliveFenster’s flare up was uncalled for.

    * * * * *

    Dear Mr. CliveFenster,

    Re:
    “the inability of a handful of posters to ignore the utterly off-topic entries from Examiner#6k,”

    It is one thing to express you negative views about one poster or another – this is America and you are entitled.

    But it is bad manners and unprofessional, to say the least, for anyone to suggest to other posters to whom they should or shouldn’t respond. Who are you to criticize many posters (it is a lot more than a handful) for their lack of ability to ignore e#6k?

    While I agree with you and have thought that same thing regarding e#6k many times, but even I in all my brashness would not suggest to others not to reply to this or that particular poster. Patently-O posters are entitled to exercise their own judgment and reply to whomever they want. If things get too far out of line, Professor Crouch will rein in the culprit.

    To be candid, I am happy to criticize you, because, while you certainly have the right to criticize me as you did, with all due respect, your ability to exercise good judgment is painfully lacking.

    * * * * *

    Dear Max,

    I’m happy to give you credit where it is due; it is your cynicism and disingenuity aimed at undermining the strong American patent system that I mostly rail against. I’m sure you can understand that, because I, Just an ordinary American jingoist inventor, take any devaluing of our patent system personal.

    Perhaps you have no idea of the frustration we self-employed struggling inventors suffer have spend decades building patent portfolios and then enduring, for example, patent game-changing Supreme Court decisions one after the other, while many infringement litigations are ongoing, decisions that deflate our livelihoods.

    To add salt to the wound, some such S. Ct. decisions, like the eBay decision, are in direct violation of the U.S. Constitution!, as explained in this comment:

    link to patentlyo.com

  73. The ad homenim flame wars that flare up here are a huge distraction.

    That said, I was going to pose a question to the group that was back on topic. After some thought I came up with an answer satisfactory at least to myself.

    The question is this:

    If “mental process” is purely abstract and has no objective physical impact on the real world (as opposed to impacting the fictional world that exists in the head of one practicing a given mental process), then why should we even bother debating the patentability of such stuff. Let the Applicant have his claims. How is he going to prove that anyone infringes by secretly “thinking” in their heads, and even if they do, what is the true value of the damages, one dollar?

    The answer(s) I arrived at came from looking at an analogous question:

    Why isn’t a book (a manufacture) that contains a novel & nonobvious fictional story not patentable?

    In one sense, the book is a new way of organizing ink on paper. It is useful because it is entertaining. So why don’t we let people patent new books? (I don’t want to hear the digression answer about copyrights. That’s not an answer. It’s a distraction.) We don’t let people patent books (or new music recorded on CD-ROM) due to an unspoken understanding (a “feeling”) about public policy. A new book does not substantially promote the progress of the useful arts. It is really the same old same old in new clothing. Rearranging of the letters on a page to make a new story is obvious. The only thing that is not obvious is how those rearranged letters affect the mind of the reader. (Same answer for most recorded music.) So the novel usefulness of the manufacture, the book occurs purely in the mind of the reader. Although the book is a manufacture and thus fits comfortably under 101, its utility is a process (reading) wherein the novel aspect takes place essentially only in the mind of the reader. A book is not patentable due to 103, not due to 101. We don’t want people patenting books because it will add needless cost to the judicial system. And yes, besides that they have adequate remedy under copyright laws.

    But suppose the claims for a new book included the “process” of: (1) opening the book to a next page; (2) reading the page; and (3) appreciating a nonobvious aspect of what is being conveyed by the read page.

    The 1st and 2nd steps are physical and naturally combined. The 3rd step occurs essentially all in the mind of the reader. I think the claims in Comiskey and Bilski need to be analyzed in a same way under public policy considerations. Is the spot in the claim where the novel and not obviously combinable action takes place, something that occurs essentially all in the mind of a user? Now is the time to step back and re-read the claims. Cheers.

  74. Bilski present the Federal Circuit with an amazing opportunity to articulate a correct economic theory of R&D.

    Some financial engineering innovations will be kept trade secret regardless of how strong the patent system is. These are the ideas that people use to make trades.

    Some financial engineering innovations (such as the bundling of property with insurance to ensure that buyers accept both the positive and negative externalities of their actions) would be well-served by the incentives of patenting because patents would encourage earlier disclosure to the public and more cooperation in introducing new securities in the industry. This last subprime collapse could be characterized as an example of “competitive destruction” (the evil twin to Schumpeter’s “creative destruction”).

    Will the Federal Circuit get this one right? We can only hope.

  75. –this website has greatly declined in value to the patent practitioner interested in professional discussions regarding his field.–

    I noticed recently that the BPAI has issued three precedential opinions in 2008, but there have been no Patently-O posts regarding any of them. That would be interesting to discuss. I haven’t decided yet whether to blame the readers for this or DC for not putting up entries on them.

  76. It seems to me that this is an issue that should be solved in legislation, rather than pseudo-legislative ‘interpretation’. I see a lot of subject matter arguments using scientific principles that the original writers wouldn’t have considered or understood (e.g., a ‘thought’ constitutes a physical transformation because it involves particular electrochemical responses in the brain; principles of electromagnetism; wave/particle duality; etc.). Thus, if Congress really wants subject matter to be a serious consideration in the grant of a patent, they need to step up and explicitly include or exclude subject matter.

    In the end, a cost-benefit analysis is likely to be most instructive. As we know, not all technology areas are created equal (Pharma v. tech being Exhibit A). It would be helpful, then, to consider the advantages and disadvantages of patent protection in each respective field.

    In short, the patent system must be subordinate to its goal: promoting progress. Although all of us have vested interest in the continued health of the patent system, the patent system cannot exist for its own sake – rather, it is simply a mechanism for accomplishing a greater aim. In cases where this system cannot be shown to achieve its goal, it should be modified or abandoned (one example would be surgical methods).

    In regard to business methods specifically, I think we run into several issues (these may have been addressed in the oral arguments, I haven’t listened to them yet): rejections based on prior art are unreliable. Business methods are notorious for being poorly documented, and obviousness is a tricky issue to address. A lot of business methods are going to seem like common sense even absent any disclosure in the literature. There’s also the question of whether a patent system actually promotes progress in the business method arena – is the art of such a nature that most progress happens regardless of the patent system – i.e., would people continue to develop and implement new business methods anyway? Historically, haven’t businesses always been doing this even absent patent protection? What are the costs and benefits of a patent system here?

    There’s also the problem of enforcement. Consider if Ken Fisher, back in the 1980’s, had patented his investment method of using PSR to predict future returns on equities – how would you enforce that against people? And would people reasonably be able to avoid infringement? If you knew some mechanism which had good predictive power in the market, would you take positions in the market that were contrary to what you knew? Wouldn’t that be outright idiocy?

  77. Now that is an interesting contribution. Thank you Jeff Spangler. The English courts speak of tethering, in their efforts to construe the European equivalent of 101. They don’t like delegating the filtering step to the 103 question, whereas the EPO (and the German courts, and now Judge Rader?) leave the filtering all till 103 time. An American debate on “tethering” would therefore be illuminating, at least for curious European readers, of which Dennis has many by the way.

    JAOI, I don’t know where you get this “hidden agenda” nonsense from. But thank you for your “well-written” and “edifying”. What can I say in reply?, Being jaded, I salute your passion.

  78. Anonymous writes: “If DDC were willing to ban about 3 posters, the quality of the comments would improve immensely, I think.”

    Between the massive threadjackings, the inability of a handful of posters to ignore the utterly off-topic entries from Examiner#6k, the lengthy and duplicate-posted jingoist postings of JAOI, and the uncalled for personal snarks (some veiled, some not so veiled), this website has greatly declined in value to the patent practitioner interested in professional discussions regarding his field.

  79. One word I heard before the arguments last week at an NYC IP seminar but didn’t hear yesterday in court was “tethering” of an abstract idea to an apparatus such as a general purpose computer, a concept which seems to underlie this metaphysical debate. Fortunately, the most marginally useful posters in this forum (like me?) are here doing little harm and shedding little light instead of out there “tethered” to real clients in the real world.

  80. Dear “anonymous,”

    Respectfully, I disagree. I for one would not like to see MaxDrei banned. Even though I disapprove of his hypocrisy, I would defend his right to speak his piece – he is well written and often does post edifying comments despite his hidden agenda.

  81. Thank you JAOI. One of the things I have learned on this blog is what the expression “having an agenda” means. Boredom mostly.

  82. PS:

    Re:
    “The JAOI responses are disappointing because they are repetitive and boring.”

    This also is misleading: To many others yes, maybe you are right; but I strongly expect to you they strike a different cord – perhaps my calling you a hypocrite is harsh and hurtful. As you once wrote, “If the shoe fits…”

    You can learn from my remarks, and that may lead to your self-improvement and to your making an honest reply, which I would happily applaud.

  83. If DDC were willing to ban about 3 posters, the quality of the comments would improve immensely, I think.

  84. Re:
    “I comment in the hope of prompting responses from which I can learn something.”

    Here’s the difference between you and me:

    I favor the strongest American patent system possible because that puts the most value on all patents including my own, my contribution “To promote the Progress of Science” which is my life’s vocation as well as my avocation. A strong system does more To promote the Progress than a weak system by rewarding inventors who publish. And, I proudly declare my passionate American patriotism loudly – no one can miss where I’m coming from.

    With all due respect, you, on the other hand, are a hypocrite. You hide behind comments like:
    “I comment in the hope of prompting responses from which I can learn something.”
    while you deceitfully but subtly promote your anti-American resentment as you advance devaluation of our patent system in every way you can contrive.

  85. I’m a frequent poster, anonymous, but I get more abuse when I suggest how the situation could be improved than when I refrain from suggesting how the situation can be improved. Frankly, it’s a very interesting debate: how to write a unitary patent law that gives exclusive rights with a scope of protection that is “fair” to each and every inventor (whether chemical or an engineer) while at the same time giving the general public reasonable legal certainty. A US patent with a family of 255 members strikes me as a sign that there’s something wrong with the present US patent system, but opinions differ. Others hold it up as sign that the US system is the only one in the world that is on the right lines. I comment in the hope of prompting responses from which I can learn something. The JAOI responses are disappointing because they are repetitive and boring.

  86. I predict that no matter what happens, the idiots who comment regularly on this blog will complain about it without suggesting how the decision could be improved, and that they’ll cite it as evidence that the courts are in the pocket of some group.

  87. I predict a rambling summary of the history of 101 doctrine that tries to make it sound like everything is the same as its always been, followed by affirmance of the BPAI on a narrow ground. Throw in a “deck chairs on the titanic” comment or two in the concurrences, with one maybe affirming on a different ground, and we’ll call it a good day’s work.

    I guess Justice Breyer won’t get to exercise his demons on this case.

  88. Dear Max,

    I thought you had dreid up and gone to meet your maker – no such happening (õ¿Q).

    Boy!, you are one anti-American cynical sarcastic contemptuous foreign slug, if you don’t mind my saying. And I mean that in the most flattering way? With all due respect Max, it is nothing personal – it is your “screw-you-while-I-pee-in-your-face-telling-you-its-spring-rain-attitude” that really stinks. Other than that, you are after all commenting as a uniquely loathsome character, but I’m not telling you anything you don’t already know.

    HERE’S THE THING Dear MaxDrei:
    You are the type who loves to see a couple fighting and you relish sticking your 2¢ in to aggravate the spat to elevate sufficiently to see blood spilt.
    The difference is that you have an anti-American agenda you are promoting – you want to see us torn down to your level. Come on, fess up, admit it – you’ll feel better coming out from under your rock, and you’ll thank me later.

  89. It’s hard to tell much from the argument. Rader and Michel did most of the talking. Rader was the only one who tipped his hand re: deciding the case–he was the one asking “whether the statutory limits of Section 101 are necessary at all — given the administrability of Sections 102, 103 and 112.” Michel seemed to be mostly frustrated with the lawyers. Several judges said nothing, and most asked one or two questions. The only strong impression I got was that the judges didn’t find the advocates very helpful.

  90. In Gulliver’s Travels, StepBack, the Big-Enders and the Little-Enders were in a permanent state of war. As far as they were concerned, the matter was that important. When Bill Shankly, chief trainer of Liverpool FC, was asked whether, for him, soccer was a matter of life and death, he looked piteously at the enquiring journalist and opined “No laddie, you don’t understand. It’s far more important than that”. I guess that, for pharma and big tech, patentability is also perceived to be a matter of life and death (as they are demonstating by the amount of cash they were pouring into their lobbying activities). In whose pocket are the judges? Where lies the public interest?

  91. “Abstract ideas” as opposed to non-abstract ideas? “Technological arts” as opposed to arts (i.e. chiropractic, base-ballish) that are craftily labeled by their detractors as non-technological? What’s going on in this court room hearing? I think Tom Swift’s Gulliver would have been amused. It’s just another bunch of little minds arguing about which end of a fictional egg to crack first.

  92. Dennis, the link to The Economist is good, and the comment below the Economist article is good too. It makes the point that the US patent system is not broken but still the best in the world, that it has fostered the innovation that made the big tech companies great, and that the resistance of big tech companies to patent reform is misguided. And there was me thinking that was in the pre-State Street era that the USA became world-dominating in software and business methods. I see looming another classic case of the Law of Unintended Consequences, namely, full patent protection for business methods, only in the USA, stagnates development of business methods, but only in the USA.

  93. e#6k…design patents promote the arts by publishing the novel design in the patent for the world to see!

  94. Anyway, yes you’re right D, it will be affirmed on the basis of it being an abstract idea and they won’t change hardly a thing (a shame). If they even did it would be doing what courts ha te to do, over judge.

    The judge talking about the chiropractor though, that guy is funny, obviously the doctor is transforming something in the person’s back. It took a whole other judge coming in just to bring that simple concept up. These guys are 2nd to the SC? Lo rdy.

    “Doesn’t the constitution only require that the process have, have utility?” Um, no, but we’ll go with yes.

    “Are you suggesting that the SC or otherwise, that the constitution imposes a TA exception or limitation on patentable subject matter?” “I, that is, yes, we agree with what Comiskey says” “What about design patents?” “Congress did an Oops?” Big laughs but yes.

    Maybe some good PO reader could explain to us how design patents promote any arts?

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