Bilski v. Kappos and the Anti-State-Street-Majority

The 1998 Federal Circuit decision in State Street Bank opened the door to patent protection on a wider variety of innovations — especially in the fields of business methods and software. State Street held that an invention should be patent eligible under 35 U.S.C. §101 if it involves some practical application and “it produces a useful, concrete and tangible result.”

Although not rejected by the majority opinion, it is clear that the broad “useful, concrete, and tangible result” test is dead. That test is conclusively rejected by what I term the Anti-State-Street Majority — a majority created by the combining the two concurring opinions in Bilski and their five-justice majority. The result is that the scope of patentable subject matter is certainly narrowed from its 1998 high-water-mark.

* * * * *

In Bilski v. Kappos (2010), the majority opinion neither endorses nor rejects State Street — writing instead that “nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357.”

The two concurring opinions in Bilski (2010) both explicitly reject the Useful-Concrete-And-Tangible-Result test of State Street. Justice Stevens writes that “it would be a grave mistake to assume that anything with a ‘useful, concrete and tangible result,’ may be patented. (Justice Stevens concurrence at FN 1). Justice Breyer reiterated his prior statement that “if taken literally, the statement [that anything which produces a useful, concrete, and tangible result, is patentable] would cover instances where this court has held the contrary.” (Justice Breyer concurrence). The two concurrences are in agreement on this point and are signed by five Supreme Court Justices — leading to a second majority on that particular point.

Of course, in its In re Bilksi decision, the Federal Circuit already repudiated State Street as inadequate and "insufficient to determine whether a claim is patent-eligible under § 101."

Cumulatively, this means that the broadest notion of patentable subject matter as represented by State Street is not the law. Although not "the test" it appears that the USPTO will continue to use the machine-or-transformation test as a "tool" for determining whether particular process claims fit within Section 101. A recent Post-Bilski notice to examiners indicated as much:

Examiners should continue to examine patent applications for compliance with section 101 using the existing guidance concerning the machine-or-transformation test as a tool for determining whether the claimed invention is a process under section 101. If a claimed method meets the machine-or-transformation test, the method is likely patent eligible under section 101 unless there is a clear indication that the method is directed to an abstract idea. If a claimed method does not meet the machine-or-transformation test, the examiner should reject the claim under section 101 unless there is a clear indication that the method is not directed to an abstract idea. If a claim is rejected under section 101 on the basis that it is drawn to an abstract idea, the applicant then has the opportunity to explain why the claimed method is not drawn to an abstract idea.

I'm sure that our notion of the law will continue to develop as the Bilski decision makes its way into daily practice.

93 thoughts on “Bilski v. Kappos and the Anti-State-Street-Majority

  1. That’s what I did IANAE – nine Hellers, no Neds.

    TINLA – thanks, it just aint as common as you think, but if it pertains here, it confirms my suspicions as there is an “Ed” with a Reg. number in the twenties.

    BTW – Ned – even if I give you plenty of (imo well-deserved) grief, I do admire the straight forward and unabashed use of your own identity.

  2. “Ned – why is there no “Ned Heller” on the USPTO registered practicioners’ list?”

    Ned is a common nickname for Edward. Speculate on that.

  3. Petrus as soon as you can dump your signal into a stat class let the judiciary know.

    The stat class of “Manufacture” seems appropriate for signals being waveforms changed by man.

    I am. And I am using my real name.

    Ned – why is there no “Ned Heller” on the USPTO registered practicioners’ list?

    IANAE – Sparrow-Norrington – Hilarious good to see you recovering!

  4. Now that the most-anticipated patent litigation case in recent history has been decided, where do we turn next for endless speculation and suspense? Myriad? I heard it’s now on appeal, so we can probably get some mileage out of that one.

  5. “For example, that pet insurance rider claim we were discussing last week…”

    Mooney is under the delusion that people remember his threads. Dream on Mooney, dream on.

  6. “Or maybe you believe that the Supreme Court will state “the examiner was wrong to reject on the basis of a conclusory statement that the claim is directed to an abstract idea, but anyway, the claim should be rejected because it is directed to an abstract idea”?”

    LOL.

  7. @ping:
    “IANAE, my idol, you still need rest. The Supremes have much more latitude and operate under different canons of admin law than do examiners (and anyone at the PTO for that matter).”

    Are you seriously trying to argue that the examiner in Bilski’s case was wrong when he stated that the claim was directed to an abstract idea? Even though the Supreme Court has now concluded the examiner was right?

    What is your point exactly? That even if the examiner rejects the claim for being an abstract idea, you can still try to appeal it the full three levels only to hear that the examiner was right?

    Or maybe you believe that the Supreme Court will state “the examiner was wrong to reject on the basis of a conclusory statement that the claim is directed to an abstract idea, but anyway, the claim should be rejected because it is directed to an abstract idea”?

  8. A lot of people know me.

    Norrington: You are, without doubt, the worst pirate I’ve ever heard of.

    Sparrow: But you have heard of me.

  9. ping, I am. And I am using my real name. Ask around at the next AIPLA meeting. A lot of people know me.

  10. @NWPA “Funny that Stevens forgot to mention that Judge Rich wrote the 1952 act and State Street.”

    He mentioned exactly those things on pages 30-31, noting that Judge rich wrote the Act in 1952, and then in 1960 opined that the diaper service (a process for doing business) was outside the scope of patentability becaseu it was not a “process.” Stevens also adressed Rich’s authorship of State Street in footnote 4 on page 31.

  11. >>It was the intent of congress in 1952 that >>matters, and that alone.

    Funny that Stevens forgot to mention that Judge Rich wrote the 1952 act and State Street.

  12. It was the intent of congress in 1952 that matters, and that alone.

    Do you think Congress gave the issue very much consideration in 1952? Do you think Congress explicitly considers most of the questions that are decided in court based on Congressional intent?

    It’s probably safe to say that Congress in 1952 intended a broad definition of “invention”, and it’s probably not safe to say much else on the subject. Sure, the argument based on 273 isn’t a particularly strong one, but it unambiguously reflects the opinion of Congress in 1999 (which is not strictly probative of what Congress thought in 1952) that there is such a thing as business method patents, and there was no political will to abolish them at that time. It does not support a conclusion that Congress was ever against the grant of business method patents.

  13. “Well then, there wasn’t enough support in Congress to abolish business method patents.”

    Lack of enough support in Congress in 1999 to abolish business methods has no bearing on intent of Congress in 1952 whether or not to allow business methods. It was the intent of congress in 1952 that matters, and that alone.

  14. Fixt below:

    Examiners should continue to examine patent applications for compliance with section 101 using the existing guidance concerning the machine-or-transformation test as a tool for determining whether the claimed invention is a process under section 101. If THE EXAMINER IS NOT SMART ENOUGH TO SAY THAT a claimed method DOES NOT MEET the machine-or-transformation test FOR FAILURE TO TIE THE METHOD TO A PARTICULAR MACHINE OR TRANSFORM A PARTICULAR ARTICLE INTO A DIFFERENT STATE OR THING, the method is likely patent eligible under section 101 unless THE EXAMINER DECIDES TO COMMIT CAREER SUICIDE BY INDICATING THAT there is a clear indication that the method is directed to an abstract idea. If a claimed method does not meet the machine-or-transformation test, the examiner should reject the claim under section 101 WITH A CONCLUSORY STATEMENT THAT there is a clear indication that the method is directed to an abstract idea. If a claim is rejected under section 101 on the basis that it is drawn to an abstract idea, the applicant then has the opportunity to explain TO THE FEDERAL CIRCUIT why the claimed method is not drawn to an abstract idea.

  15. good lawyering,

    Compare and contrast “great lawyering”, which is much the same except that it convinces a majority of the court.

  16. Night Writer Patent Attorney wrote of Justice Stevens: Sheer rubbish. Congress could of and didn’t exclude business methods. They didn’t. They did something else that acknowledged business methods. Any reading of this behavior to support a conclusion that Congress does not want business methods is contrived and ridiculous, and I would argue usurps the legislative role from Congress.

    Well said. Justice Stevens took evidence against his position and used it to support his position – good lawyering, but poor judging, and typical of his career on the bench. I’m also very happy to see him go.

  17. Whereever MM is. Note that my prediction came pretty close to being true. The court basically adopted Rader’s opinion. Thomas didn’t write it. But, Steven’s did write that long sad dissent.

  18. Not if they couldn’t get enough support for or ainterest in amending 101 one way or the other.

    Well then, there wasn’t enough support in Congress to abolish business method patents. So whatever they did, abolishing business method patents wasn’t it.

    Same could be said for the Supremes, it appears. Don’t you wish one or the other would finally make a decision and commit to it?

  19. As best I can determine:

    UCT is not dead, but on life support with a prognosis that is not altogether encouraging. Time to notify the next of kin, i.e., applicants.

    MOT is a good start, but other approaches are not foreclosed. Of course, each of those other approaches will have to be presented to the SCOTUS for approval on a case by case basis.

    101 has limits, but the SCOTUS does not know what they are. For the time being, LON/NOP/AI are good enough for the SCOTUS.

    Business methods are like pornography. I cannot define it, but I know it when I see it. Presumably, the same can be said for “software”, but this is left for another day.

    AUTS has been firmly rejected.

  20. “If they really wanted to minimize the impact of such a ruling, they would have amended 101, not 273.”

    Not if they couldn’t get enough support for or ainterest in amending 101 one way or the other. Basically, it looks to me like they punted the question of patentability of business methods to SCOTUS, but wanted to make sure there was a safeguard in place if needed. That’s all.

  21. You are basically saying that a statute enacted by Congress to prospectively minimize the impact of a SCOTUS ruling that Business Methods are patentable actually requires SCOTUS to so rule. I fail to see the logic in that.

    If they really wanted to minimize the impact of such a ruling, they would have amended 101, not 273. Minimizing means “as little as possible”, not “less than before”.

    A law to the effect that “here is what business method patents don’t do” pretty clearly implies that there are business method patents. If they made laws about what unicorns couldn’t do, you’d have to conclude that Congress believed in unicorns.

  22. What this seems to imply is that business method claims are abstract per se, and can only be rendered patentable by passing the machine or transformation test or by passing some other test yet to be devised by the Federal Circuit.

    Only in IMHO-Ned-Law-Phantasy-Land can such a stretch be made.

    OT here (and Iza too lazy to find the thread), but Ned, you challenged Malcolm to post under a real name – relative to another Supreme decision. Gotsa a follow up question for you – why are you not a registered practicioner?

  23. >>A lot of what J. Stevens wrote made sense.
    >>I think he was really on the ball regarding 273

    I don’t think so. Congress could have amended 101 to exclude business methods. They didn’t.

    (1) build a model of congress so that step
    (2) apply their actions to the model
    (3) build a syllogism that thier behavior supports my conclusions.

    Sheer rubbish. Congress could of and didn’t exclude business methods. They didn’t They did something else that acknowledged business methods. Any reading of this behavior to support a conclusion that Congress does not want business methods is contrived and ridiculous, and I would argue usurps the legislative role from Congress.

    I am very happy to see him go, but not happy to see the likes of Kagan take his place. A politician is what she is. Not a judge.

  24. “the amendment to 273 showed that (1) Congress acknowledged that there are such things as “business method patents” under 101, and (2) Congress did not make any amendment to 101 to exclude business method patents.”

    You are basically saying that a statute enacted by Congress to prospectively minimize the impact of a SCOTUS ruling that Business Methods are patentable actually requires SCOTUS to so rule. I fail to see the logic in that.

  25. The intent of Congress in 1952 when passing the Patent Act cannot be revealed by anything that Congress passed decades later.

    Not directly, but the amendment to 273 showed that (1) Congress acknowledged that there are such things as “business method patents” under 101, and (2) Congress did not make any amendment to 101 to exclude business method patents.

    Whether or not Congress was particularly pleased with the existence of business method patents is beside the point.

  26. A lot of what J. Stevens wrote made sense.

    I think he was really on the ball regarding 273. 273 did not express an intent of Congress to change what is eligible patentable subject matter under 101. The intent of Congress in 1952 when passing the Patent Act cannot be revealed by anything that Congress passed decades later. The canon against interpeting any statutory provision in a manner that would render another provision superfluous should not apply here, because the defense of prior use to infringment of a business method patent claim is a stutory provision that exists to protect infringers on a provisional basis. In other words, ruling that business methods are not patentable under the 1952 act does not prevent 273 from being effective if another ruling is made to the opposite effect, or if another statute is enacted to make business methods patentable.

    On the other hand, although Stevens does persuasively argue that the 1952 Congress intended only to codify existing understandings of the law at that time, the difficulty in defining what is a business method ought to prevent a categorical exclusion for business methods, per se. Otherwise, there would be many claims that pass the MoT test, but might still be characterized as business methods by infringers at trial.

  27. What this seems to imply is that business method claims are abstract per se, and can only be rendered patentable by passing the machine or transformation test or by passing some other test yet to be devised by the Federal Circuit.

    I think you might get a business method claim that fails MOT if you can somehow nevertheless show a useful, concrete, and tangible result.

    Bilski’s claim was probably dead as soon as the Court looked at it and said “okay, but what does it actually do?”, and found no satisfying answer. That’s “I knows it when I sees it” in a nutshell.

  28. ping, et al., Chisum also had the same difficulty with the notion that the Bilski claims were “abstract.” Chisum states that there is nothing “abstract” about the Bilski claims. (If I recall correctly, the Stevens dissent had the same difficulty with the majority opinion.) What this seems to imply is that business method claims are abstract per se, and can only be rendered patentable by passing the machine or transformation test or by passing some other test yet to be devised by the Federal Circuit.

  29. Ping – I’ve read the entire transcript and listened to the audio recording. I saw/heard no such admission.

  30. You’re gonna have to provide a cited quote to support that assertion.

    Too lazy Les – but I will point out the way – look at the oral argument transcripts.

    Malcolm,

    You know better than to draw law from mere concurrences, dontcha?

  31. Les The claims were to the practical purpose of guaranteeing prices to consumers and suppliers.

    The problem, Les, is that a “practical purpose” (“curing cancer”, “making money”, “entertainig a cat” “guaranteeing prices”) is itself an abstraction. In Bilski’s case, the claims did not recite sufficient steps to credibly move the claim out of the realm of the abstract. In some cases, for a particular “practical purpose” it may be impossible to recite sufficient steps to move the claim out of the realm of the abstract. It would be a good exercise for you, Les, to consider hypothetical examples of such cases. If you need help doing so, just ask and if I’m in the mood, I’ll provide you with some assistance.

    By the way, Les: you have my condolences. I know you are one of the most rabid patent teebuggers out there. This decision must be a bitter pill for you, as it clearly contradicts most of your views regarding 101.

  32. Bilski concurrence: although a process is not patent-ineligible simply because it is useful for conducting business, a claim that merely describes a method of doing business does not qualify as a “process” under §101.

    What I’ve been saying. Methods of turning a profit aren’t 101 eligible. If a claim can be fairly characterized as such, it’s done. For example, that pet insurance rider claim we were discussing last week: it’s dead. Put a fork in it. I just saved you $9500.

  33. “The existence of 273 implies that business method patents exist.”

    Its existence in its current form, I mean.

    If Congress once thought business method patents were included in 101, and they haven’t since amended 101, what do you suppose 101 means now?

    I think we’re pretty close to agreement on this point, actually, and I’m reluctant to press the matter any further.

  34. IANAE,

    “The existence of 273 implies that business method patents exist.”

    I’m not discussing the striking of the whole section — only the “business method” language from being included as a process. Section 273 existed before this specific language was added in 1999. That gave the majority its belief that Congress accepted business methods as patentable, and the key difference between the majority and dissent.

    Amending 101 to exclude the business method would definitely be another way for Congress to act and probably the better way than striking the specific language. To that extent, I agree with you.

  35. Moot point IANAE.

    If Congress got their gumption together, decided that business methods shouldn’t be patentable and actually acted in removing 273, ya think they wouldn’t make the act complete and do whatever was necessary to eradiacte business methods completely? After all, 273 is mainly a defense – ya think Congress with intention to eliminate the patentability would only remove the defense?

    Ya still be a bit woozy I see. Man, it pains me to see you posting so sloppily.

  36. Ping -

    “Bilski’s counsel admitted such.”

    You’re gonna have to provide a cited quote to support that assertion.

    The claims were to the practical purpose of guaranteeing prices to consumers and suppliers. They were not abstract.

  37. WCG, I respectfully disagree.

    Had Bilski applied 273, then a repeal of 273 would make Bilski moot.

    What the Court did in Bilski was look at 273 and say “hey, look at that! Congress thinks business method patents exist, so 101 must include business method patents.”

    The existence of 273 implies that business method patents exist. The repeal of 273 does not imply that business method patents don’t exist, but its erstwhile existence would still imply that business method patents existed at least for a time. Bilski and 101 would still apply in exactly the same way.

  38. then Bilski’s claims are clearly NOT abstract.

    Au contraire Les. The scope of the claims as construed went beyond practical purpose and intention. Bilski’s counsel admitted such. Thus, the Rader path was the one of least resistance.

  39. AI That leaves us with only ONE type of business method that does not qualify. Which means 99.9% of the rest will sail right thru the gates of 101.

    Dream on, AI. Dream on.

  40. EG It is sad that the “useful, concrete, and tangible result” test is apparently dead after SCOTUS’ decision in Bilski. It is the only test that even comes close to being objective in determining patent-eligibility under 35 USC 101.

    It’s dead as a definitive test, but I think it still has viability for providing a “clue.”

  41. IANAE,

    “If Congress wants to explicitly exclude business method patents from 101, and thereby force the courts to interpret what “business method” means, that’s entirely within its power.”

    I certainly don’t disagree that 101 could be amended. If 273 is amended to strike the language, then Bilski would no longer be directly on point.

    The Court in Bilski did two things: (1) eliminate the exclusive application of a disdained bright-line rule and (2) solve an issue of statutory construction because the difference between the majority and dissenting opinions was the difference in how 273 was interpreted.

    If courts no longer adopt the MoT test as a bright-line rule and the construed language of 273 is striken, then Bilski would not be on point with respect to business methods.

  42. What does “abstract idea” mean?

    I found this definition of abstract:

    dealing with a subject in the abstract without practical purpose or intention

    If an abstract idea is one that deals with a subject without practical purpose or intention, then Bilski’s claims are clearly NOT abstract.

    Furthermore, I think its fair to say that any claim to a process would only be to an abstract idea by accident and could be amended to be to a practical purpose or intention.

    So, what does abstract mean? And on what planet are Bilski’s claims abstract?

  43. AI Oh God.. this is beginning to be as worse as the fact that not a single patent attorney can provide an objective definition of a business method and still talk about legally banning such so called methods.

    I have posted objective definitions of business methods, as have others.

  44. Guess what? A conclusory statement that the claim is directed to an abstract idea was good enough for the highest court in the land. Three levels of appeal up from the humble examiner. I think you’ll find it’s good enough for the examiner too.

    IANAE, my idol, you still need rest. The Supremes have much more latitude and operate under different canons of admin law than do examiners (and anyone at the PTO for that matter).

    Also, “Once a claim is rejected, the burden shifts to the applicant.” is incorrect. Examiners (quite often) fail to establish a prima facie case in their response, my argument carries this truth and there is no burden switch with a mere postmark and initial rejection. Just aint true.

    Examiners will not be able to hand waive a “it looks abstract to me”. Examiners are bound by the rule not to make conclusionary statements. Nothing in the Bilski case (or even in the memo following that case [which I have not yet seen from an official source - I aint gonna count Quinnie's blog as an official source]) changes the law in this area.

    Maxie,

    I am not confusing 101 and 103 in the question which follows.

    Yes you are. Bilski is not geared to a 103 question. An examiner quoting Bilski in making a 103 rejection will have no ground to stand upon.

  45. Congress can do anything it wants because of the sepearation of powers.

    If Congress wants to explicitly exclude business method patents from 101, and thereby force the courts to interpret what “business method” means, that’s entirely within its power.

    If Congress wants to repeal section 273, that won’t change the fact that Congress once enacted section 273, or any of the legal implications of the enactment of section 273 on section 101, unless section 101 is also amended. If section 101 once included business methods, it always does, until section 101 is amended.

  46. IANAE,

    “Probably too late for that. The fact that 273 was ever enacted in that form means that Congress acknowledged the existence of business method patents. They can’t un-acknowledge same by repealing the section.”

    Disagree. Congress can do anything it wants because of the sepearation of powers. Also, Congress does respond to Supreme Court decisions. One recent example is Congress’ response to the Court’s Lilly Ledbetter decision involving equal pay:

    link to en.wikipedia.org

    Should Congress act to strike the “business method” language from 273, then I don’t see a retroactive application to existing patents — only prospective application to patent applications.

  47. Mark N: I wouldn’t be so hasty to say that the patenee intended for every step of the claim to be carried out on a computer.

    The PTO probably won’t consider the preamble limiting, of course. But once you get to court, if you don’t have a computer recited in some of the steps, there are only two reasonable constructions – all of the steps are performed by computer, or the preamble is not limiting and none of them are.

    Rusty: Stevens is gone

    He wasn’t gone when he wrote the decision. We don’t go overturning Brown v. Board and Roe v. Wade just because the justices who wrote those decisions retired, do we?

    6: Wouldn’t it be hilarious if, in response to this decision, congress simply strikes Section 273(b)(1)?

    Probably too late for that. The fact that 273 was ever enacted in that form means that Congress acknowledged the existence of business method patents. They can’t un-acknowledge same by repealing the section.

    AI: :: Silence::

    You must think pretty highly of us if you expect us to answer before you’ve even posted your question. No wonder you always seem so disappointed.

    AI: Second, when did the burden of proof shift to the Inventor?

    Check the mailing date on the rejection. Once a claim is rejected, the burden shifts to the applicant.

    AI: If the PTO has no test, statutory or otherwise to prove my invention is an abstract idea, guess what? Its not an abstract idea!

    Guess what? A conclusory statement that the claim is directed to an abstract idea was good enough for the highest court in the land. Three levels of appeal up from the humble examiner. I think you’ll find it’s good enough for the examiner too.

    Besides, one way or another, you’ll have to get past somebody at the PTO if you want your patent. If it’s not the examiner, it’ll still be up to you to convince the Board.

  48. I am not confusing 101 and 103 in the question which follows.

    Suppose you have a really cute new abstract idea. It is definitely not obvious. Suppose you draft a claim to it that is “tied” to a particular machine and “transforms” something. But the tying and the transformation are routine. The only inventive bit is in your “abstract” idea, as such.

    You get past 101. The PTO objects under 103, cites Bilski, and argues that the inventiveness of the abstract idea, as such, ought not to confer patentability.

    What then?

  49. “In other words, the majority would likely agree that a claim that “merely” describes a method of doing business is an unpatentable abstract idea. By the same token, the concurring Justices would likely conclude that a claim that contains something more than than “merely” describing a method of doing business could possibly fall outside of its excluded business method category.”

    Yeah, wouldn’t that fail the MOT test?

  50. It is sad that the “useful, concrete, and tangible result” test is apparently dead after SCOTUS’ decision in Bilski. It is the only test that even comes close to being objective in determining patent-eligibility under 35 USC 101.

  51. In other words, the majority would likely agree that a claim that “merely” describes a method of doing business is an unpatentable abstract idea. By the same token, the concurring Justices would likely conclude that a claim that contains something more than than “merely” describing a method of doing business could possibly fall outside of its excluded business method category.

  52. From the concurrence:

    “More precisely, although a process is not patent-ineligible simply because it is useful for conducting business, a claim that merely describes a method of doing business does not qualify as a “process” under §101.”

    I’m not sure the terms “more precisely” and “merely” belong in the same sentence. Their presence together suggests to me that the two opinions are actually saying the same thing.

  53. Based on the today’s decision, can an insurance method be a subjectable patent matter, if it results in useful concrete and tangible result?

  54. Actual Inventor,

    The patent office seems to agree that the burden will probably shift to the Inventor (as a matter of practice). In the memo they sent to the examiners today:

    “If a claimed method does not meet the machine-or-transformation test, the examiner should reject the claim under section 101 unless there is a clear indication that the method is not directed to an abstract idea. If a claim is rejected under section 101 on the basis that it is drawn to an abstract idea, the applicant then has the opportunity to explain why the claimed method is not drawn to an abstract idea.”

    So they will continue to use the MOT test. After all, Scalia (the 5th vote) signed onto Breyer’s concurrence, which said

    “In sum, it is my view that, in reemphasizing that the “machine-or-transformation” test is not necessarily the sole test of patentability, the Court intends neither to de-emphasize the test’s usefulness nor to suggest that many patentable processes lie beyond its reach.”

    That’s probably part of the justification for their memo.

  55. Posted by: hoteling examiner | Jun 28, 2010 at 09:26 PM:

    for practical purposes, anything that fails the MOT test will get a 101 rejection unless you can show that even though it fails the test, the claims are not drawn to an abstract idea – since there are no other tests other than MOT, good luck being persuasive in that – it’ll just turn into the Examiner saying “show me evidence that’s it’s not abstract” and then “what you’ve shown isn’t sufficient” – then you’ll appeal and lose

    ____________

    OMG, where do you people come up with such notions?

    First of all we still have the DIEHR TEST!!!!

    Sheeeessssh!

    Second, when did the burden of proof shift to the Inventor? If the PTO has no test, statutory or otherwise to prove my invention is an abstract idea, guess what? Its not an abstract idea!

  56. Actual inventor: the Bilski invention does not now qualify.

    Posted by: fish sticks | Jun 28, 2010 at 09:23 PM

    _________________

    The quote to which the question was addressed is as follows:

    “most business methods will not qualify”.

    One, The Bilski invention is not most inventions.

    Two, Bilski has never qualified.

    That leaves us with only ONE type of business method that does not qualify. Which means 99.9% of the rest will sail right thru the gates of 101.

  57. “the machine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals.”

    Yes, it’s from the Kennedy concurrence, but does this show at least four members of the court willing to overrule In re Nuijten as inconsistent with the machine-or-transformation test, the strictest of 101 eligibility tests?

  58. So please, tell me, what are these so called “business methods” that will not now qualify?

    :: Silence::

    As always.

    Posted by: Actual Inventor | Jun 28, 2010 at 09:13 PM

    ——-
    for practical purposes, anything that fails the MOT test will get a 101 rejection unless you can show that even though it fails the test, the claims are not drawn to an abstract idea – since there are no other tests other than MOT, good luck being persuasive in that – it’ll just turn into the Examiner saying “show me evidence that’s it’s not abstract” and then “what you’ve shown isn’t sufficient” – then you’ll appeal and lose

  59. “If you read behind the lines, it seems that although there may be qualifying business methods, most business methods will not qualify. ”

    Oh God.. this is beginning to be as worse as the fact that not a single patent attorney can provide an objective definition of a business method and still talk about legally banning such so called methods.

    Now the new reigning non sense in the patent community is going to be “most business methods will not qualify”.

    Well, I am an Actual Inventor. I have patents on business methods and more in the pike.

    So please, tell me, what are these so called “business methods” that will not now qualify?

    :: Silence::

    As always.

  60. Ron Katznelson,
    Another point that you should consider is the fact that the Federal Circuit itself overturned the “useful, concrete, and tangible result” test in its en banc Bilski decision. The Supreme Court certainly didn’t reinstate the “useful, concrete, and tangible result” test.

  61. Ron,

    This happens often, especially in 4-1-4 cases. You have 4 justices on 1 side, 4 justices on another, and 1 in the middle. Lower courts often consider the 1 justice’s opinion controlling, to the extent it is in the middle.

    In this case, you have Roberts/Alito/Thomas/Kennedy on one side, and Stevens/Breyer/Sotomayor/Ginsburg on the other. Scalia is in the middle. He joined most of the Kennedy opinion, but not all. And he joined part 2 of the Breyer concurrence. This means that lower courts will likely look at part 2 of the Breyer concurrence to help interpret the Kennedy opinion, since Scalia is basically saying “I only joined much of the Kennedy opinion because I read it as saying X” where X is part 2 of Breyer’s opinion (which tries to bridge the gap between the majority and minority).

    Since Breyer’s opinion specifically disparages the State Street test, there does seem to be a 5-justice majority against that test (even if it is not specifically in a majority opinion).

  62. Alappat is now in question as well. IIRC, that is where the “useful, concrete and tangible” test came from.

  63. “Isn’t this actually teaching the CAFC how to achieve the same objective without running afoul of the S. Ct.? ”

    Yes, I noted that in the previous thread in slightly different words.

  64. Wouldn’t it be hilarious if, in response to this decision, congress simply strikes Section 273(b)(1)?

    What would that imply for this type of subject matter going to the USSC?

    Who here finds it a bit ironic that the court would save the things which congress managed to pass a section protecting people from by using congress’s protecting people from them?

  65. Wait a second.

    “Indeed, if the Court of Appeals were to succeed in defining a narrower category or class of patent applications that claim to instruct how business should be conducted, and then rule that the category is unpatentable because, for instance, it represents an attempt to patent abstract ideas, this conclusion might well be in accord with controlling precedent.”

    This is from the majority minus Scalia.

    Isn’t this actually teaching the CAFC how to achieve the same objective without running afoul of the S. Ct.? Specifically, only the S. Ct. could create exceptions, and it created 3 and 3 only. So, if the CAFC relabels “business method patents” as “narrow-class-of-bad-patents” and announces them as abstract ideas, everyone would be happy. Of course, they need a “definition” for that class as Kennedy quoted Hall’s paper, but Stevens provided one: “a series of (intangible) steps.”

  66. Rusty,

    In future briefs, an argument can be made that a majority considered State Street bad law. It doesn’t matter if one of the justices retired on the day of the opinion.

  67. Ping:

    Isn’t the memo basically stating exactly what I said would happen in the previous post/comments thread on this site? Weren’t you the one that said attorneys would use it, and not the PTO?

  68. Boom and WCG: That makes sense if the Court stayed the same, but Stevens is gone and without an explicit reversal of State Street Bank, does that kind of combining = “precedent”? Seems Kagan can vote however she wishes in the future without saying she’s overruling anything.

  69. “Concerns about attempts to call any form of human activity a “process” can be met by making sure the claim meets the requirements of §101.”

    What does this mean? Is it at best circular argument?

  70. Ron Katznelson,

    “Can you please help us here in legally substantiating your thesis that a majority of views concatenated from two minority opinions legally qualify as a majority opinion?”

    If I may attempt to provide an answer without consulting with Dennis.

    It is not the combining of two concuring opinions into one that makes a majority. It is 4 justices (the Stevens’ opinion) plus 1 justice (Scalia from the Breyer opinion) makes 5 justices. Five justices constitutes a majority. A reminder that Breyer appears in teh Stevens opinion.

  71. the Anti-State-Street-Majority … it is clear that the broad “useful, concrete, and tangible result” test is dead

    Dennis:
    What appears clear to you is unclear to me. Can you please help us here in legally substantiating your thesis that a majority of views concatenated from two minority opinions legally qualify as a majority opinion? Is there some case law that suggests combining such minority views to form a “holding” of the Court’s decision on a particular subject matter? Would you apply your thesis to combine two minority opinions on a common legal issue from two separate cases decided by the same panel? If not, what is the distinction?

    I only see one legal “holding” of the majority in this regard, and that is:

    nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street

    I did not read it as so extreme as to say that State Street is dead as useful test among others in determining patentable subject matter. Any other views?

  72. So in general you need more than an abstract idea, and a really good invention to pass muster.

    While I’d like that to be true, and even the majority seems skeptical of business method patents generally, I’m not sure where this quality test would come from in the actual language of the ruling- care to point it out? Seems to me like it just begs everyone to start arguing about what is or isn’t an idea, without much reference to the actual quality of the idea. But I have not read the concurrences yet.

  73. Dennis makes a great point.

    The majority went out of their way to ensure that State Street was not endorsed. Also, Breyer and Scalia have forever equated State Street in Supreme Court dicta with the following methods:

    (1) a method of training janitors to dust and vacuum using video displays;
    (2) a system for toilet reservations;
    (3) a method of using color-coded bracelets to designate dating status in order to limit the embarrassment of rejection.

    With State Street being linked with these types of patents/claims and by reading between the lines, the 9 justices want more than “a useful, concrete, and tangible result” required by State Street.

  74. If you read behind the lines, it seems that although there may be qualifying business methods, most business methods will not qualify. Further the machine or transformation test, though not the only test, is governing for most cases and few cases that do not pass that test will qualify. So in general you need more than an abstract idea, and a really good invention to pass muster.

  75. Dear Prof. Crouch:
    Is there more to the post-Bilski PTO notice?

    “…the examiner should reject the claim under section 101 unless there is a clear indication that the method is not directed to an abstract idea.”

    …and the patent-eligible test for an absence of a clear indication of being directed to an abstract idea is what exactly?

    While such a test can’t be (UC&T) result-oriented, will a tangible practical application with a real-world use suffice? If so, then one wonders whether the ghost of State Street lurks the halls of the PTO (just as it haunts the machines of Ex parte Gutta)?

  76. Dennis, aren’t your predictions a little contradictory? Prediction 1 is that “the Court has almost certainly pushed Section 101 patent eligibility to the background in most patent prosecution and litigation.” Prediction 2 is that “the USPTO will continue to use the machine-or-transformation test as a ‘tool’ for determining whether particular process claims fit within Section 101.” Unless you think that the machine-or-transformation test itself is irrelevant to most patent prosecution, I don’t see how both can eventuate. Otherwise, it seems that machine-or-transformation is to Bilski what TSM was to KSR: the Federal Circuit will pay lip service to how the test is not exclusive — and in a couple of years make the test exclusive de facto.

  77. That was entirely the patentee’s fault for claiming that the entire method was computer-implemented.

    I wouldn’t be so hasty to say that the patenee intended for every step of the claim to be carried out on a computer.

    Patent examiners, for example, do not construe a claim preamble of “A computer implemented method, said method comprising…” to mean that every step is carried out on a computer. Right now many of them are requiring that each step that is carried on a computer specifically recite the computer.

  78. Has the Court, by relying, in Part III of the majority opinion, on Flook’s caution against being duped by post-solution activity, revived the fortunes of the CCPA’s Freeman-Walter-Abele Test? Is F-W-A once again a useful tool for analyzing a § 101 question? The Federal Circuit’s en banc Bilski decision criticizes F-W-A as “inadequate” as a comprehensive test. 545 F.3d 943, 959. But Justice Kennedy’s opinion in Bilski knocks the very notion of finding a single comprehensive test, preferring instead simply the “no laws of nature, natural phenomena, or abstract ideas” standard. F-W-A can help one identify an abstract idea, no?

  79. the recent Lincoln Financial decision where an alleged infringer got off the hook merely by executing a step manually.

    That was entirely the patentee’s fault for claiming that the entire method was computer-implemented.

  80. I think we can expect the next battle ground to be how “tied” is tied to a machine. Expect to see some push back from the patent bar in light of the recent Lincoln Financial decision where an alleged infringer got off the hook merely by executing a step manually.

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