Scott Harris is the attorney who prosecuted, briefed, and argued in re Ferguson at the Federal Circuit. Harris is a former Fish & Richardson partner and is now in solo practice. He is also listed as a co-inventor on the patent application in dispute here as well as 40 other patents and 100+ pending applications. I asked him to provide his perspective on the case. In response, Harris provided the following FAQ.
What is Ferguson’s holding?
In order for a claim to be patentable under 35 USC 101, that claim must recite either a machine, or recite something that is tied to a machine; or the claim must transform some physical thing. The machine or the physical thing being transformed cannot be a paradigm, cannot be a corporation, and cannot be a legal obligation. 35 USC 101 requires that you must be able to “touch” the machine or the thing being transformed.
How does Ferguson differ from Bilski?
The patent application of In re Bilski, 545, F.3d 943 (Fed Cir 2008) related to an improved mathematical way in which hedged commodities were analyzed and managed. Like many of the previous “preemption” cases that had been decided by the Supreme Court and by the Federal Circuit, Bilski’s claims recited a mathematical algorithm. The Federal Circuit holding announced a new test – requiring the claim combination to be either tied to a “machine” (e.g. a computer) , or claiming a transformation of an object. Since there was no “machine” or “transformation”, the court concluded that Bilski’s claims would “preempt” one specific mathematical form of hedging, effectively stopping anyone else from using these mathematical formulas in the same way. The machine/transformation cannot be peripheral to the claim – which means that the machine or transformation cannot be related to data gathering or “mere” post solution activity.
Unlike the “preemption” cases relied on by the Bilski court, Ferguson had no mathematical calculation at all. The Federal Circuit chose to extend the Bilski test beyond the confines of “preemption” to defeat patentability of Ferguson’s pure business method. Ferguson holds that Bilski’s “machine or transformation” test is the sole and exclusive test for determining patentable subject matter, with or without a mathematical calculation.
Ferguson also held
- that the machine prong of the Bilski test must be a physical thing that one must be able to touch, and
- that the “article” to be changed into a different state or thing cannot be a legal obligation – and presumably likewise must be something that can be touched.
What was the Ferguson patent application about?
In a nutshell – software written by the little guy that was marketed and supported as though it had been written by the big guy. We believed that institutions would simply refuse to adopt or purchase any software unless it was supported by a credible company. Someone in their basement could write the best word processor or drawing program ever – but no one would ever know, because few would ever adopt it.
The patent application claimed a way to support a very small software developer or writer – who had the skills to write the software, but did not have the skills or resources to market and support the software. Ferguson claimed a shared marketing force that took a share of the income or profit from the software in return for doing this marketing and support.
Why did you write claims to a “paradigm”?
In 1999, new forms of patents and claims were erupting. The patent office had decided to accept as statutory Beauregard claims, which recited a sequence of instructions on a readable computer media. I was excited by the prospect of writing a whole new claim form for the business method genre.
I had originally filed Ferguson’s patent application with many claims reciting a “paradigm”, a way in which a business organization would carry out a specific business task. Other claims defined a process of doing that business task. Ferguson was about selling computer software, and that was not something that would normally be carried out on a computer.
Based on everything I knew at that time, business methods should be patentable. I wanted to see if we could get the patent office to accept a wholly new form of claim adapted to the business method. I called this a paradigm, which Kuhn, in The Structure of Scientific Revolutions defined as “an accepted model or pattern, . . . Paradigms gain their status because they are more successful than their competitors in solving a few problems that the group of practitioners has come to recognize as acute.” A paradigm in this sense, therefore, referred to the successful way in which a problem is solved.
Why did you think you get claims like this?
I believed the Supreme Court when they said that 35 USC §101 allows you to patent “anything under the sun that is made by man”. Diamond v Chakrabarty, 447 US 303, 308 (1980).
I believed the Federal Circuit, when they said that “business methods” were patentable. State Street Bank and Trust v Signature Financial Group Inc., 149 F.3d 1368 (Fed Cir 1998).
I did not believe there was any prior art defeating patentability, and indeed, the patent office never found any.
Are Business Methods still patentable after Bilski/Ferguson?
Bilski expressly did not overrule the part of State Street Bank and Trust v Signature Financial Group Inc., 149 F.3d 1368 (Fed Cir 1998), which held that business methods were NOT per se unpatentable.
However, I define a business method as a novel and unobvious way that a business carries out a new business function.
The holdings in Bilski and Ferguson make any such business method unpatentable, unless tied to a machine, or operated to transform a physical object. Therefore, some ways of carrying out the business method may be patentable under Bilski / Ferguson. I do not believe any pure business method could be patented under the holdings of Bilski/Ferguson.
What’s your take away from Ferguson?
Disclose (and claim) interaction with a computer in every patent application that is not a pure mechanical device.
Don’t get your hopes up about the patent office accepting an innovative claim form.