Bilski Applied to Invalidate Computer System Claims

CLS Bank Int'l v. Alice Corp. (D.D.C. 2011)

In an interesting opinion, DC District Court Judge Rosemary Collyer has ruled Alice Corp's four asserted patents invalid under 35 U.S.C. § 101 for failing to claim patentable subject matter. This case can be seen as flowing from the Supreme Court's recent decision in Bilski v. Kappos, 130 S. Ct. 3218 (2010).

Alice is an Australian company owned largely by the huge National Australian Bank. CLS is a UK company that works with banks to settle foreign exchange accounts – and is involved with about 95% of the global foreign exchange trading. The patents are generally directed at methods and systems for creating and settling debts that uses both credit/debit records and shadow credit/debit records. Claim 1 of Alice's Patent No. 7,149,720 might be seen as an example:

'720 Patent, Claim 1. A data processing system to enable the exchange of an obligation between parties, the system comprising:

a data storage unit having stored therein information about a shadow credit record and shadow debit record for a party, independent from a credit record and a debit record maintained by an exchange institution; and

a computer, coupled to said data storage unit, that is configured to

(a) receive a transaction;

(b) electronically adjust said shadow credit record and/or said shadow debit record in order to effect an exchange obligation arising from said transaction, allowing only those transactions that do not result in a value of said shadow debit record being less than a value of said shadow credit record; and

(c) generate an instruction to said exchange institution at the end of a period of time to adjust said credit record and/or said debit record in accordance with the adjustment of said shadow credit record and/or said shadow debit record, wherein said instruction being an irrevocable, time invariant obligation placed on said exchange institution.

As in Bilski, the district court focused on the question of whether the asserted claims constitute "abstract ideas." In doing so, the court began with an admission that "[t]here is no clear definition of what constitutes an abstract idea." Rather the approach must be by-analogy to Flook, Benson, and Diehr. In the 2010 Federal Circuit case of Research Corp. Techs. v. Microsoft Corp., 627 F.3d 859, 868 (Fed. Cir. 2010), the Federal Circuit offered the additional wisdom that to be disqualifying, the abstractness "should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act."

The court agreed with the patentee that the computer system claim (above) was directed toward a "machine" as enumerated within Section 101. However, the common law exceptions to Section 101 are overriding factors that operate regardless of whether a machine or process can be identified within the claimed subject matter. "Alice's system or product claims [cannot] be saved only by the fact they may nominally recite a 'computer' or 'manufacture.'

In its abstract-idea analysis, the court focused on preemption – holding that the claim "would preempt the use of the abstract concept of employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk on any computer which is, as a practical matter, how these processes are likely to be applied." In an apparent effort to bolster its conclusion, the court also suggested that it is likely abstract because it would be infringed by "common and everyday financial transactions."

Notes:

  • CLS filed this declaratory judgment action against Alice after Alice had warned CLS (by letter) that "every transaction involving CLS' settlement of foreign exchange transactions is impacted by [our patent] claims" and that CLS was "willfully infringing Alice's intellectual property."

CLS is represented by Kaye Scholer; Alice is represented by Williams & Connolly.

420 thoughts on “Bilski Applied to Invalidate Computer System Claims

  1. So, pingaling, what did you mean when you said: “as long as you first provide the “claim as a whole” show” ?

    Anybody else have any idea what pingaling meant by that? (I know I’m assuming a lot when I ask that question)

  2. I do wonder though, if, in some small way, due to my voluminous comments and making the matter fairly well known awhile back, I might have contributed to some lawyers somewhere making the correct abstract idea arguments in their cases. And if so, I feel rather good about that.

  3. “6, you make a mistake in saying that the claim covers every implementation of the abstract idea.”

    Sorry, practically all. There might be one or two laying around not covered, but I doubt it.

    “It is, of course, possible to use people instead of computers.”

    I never said it wasn’t. Those aren’t the practical applications which we are concerned about being preempt when we’re looking to “preemption doctrine” or whatever you want to call it. It was also possible to use Benson’s abstract idea in people or on paper as well. Did you see how much that helped him?

    We’re looking for all “practical applications”, for example, all the machines and machine related methods (i.e. the things that would normally be totally patentable under 101 like everytime), where the abstract idea might be implemented. And here, they appear to all be covered. Note that in Diehr they were not all covered, as one can you the Arrhenius equation for many many things not covered by that patent. And that is why the court let him off.

    I’ve been explaining this to you for years now. You’re kind of a slow learner.

    “Thus, the limitation of the claim to computers avoids preempting the abstract idea of “employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk.”

    Thus, that’s precisely what Benson did. And thus, we see why it is irrelevant. Indeed, the court went to great lengths to explain this to everyone back some 50 years ago or whatever. Also, thus.

    “It is then quite ridiculous to define the abstract idea as “employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk on a computer” in order to say that the abstract idea is preempted, but that is exactly what the Court did here. Don’t make the same mistake they did. You’ll come away with the same egg on your face.”

    Well, to be sure, I probably would have worded it differently. I still haven’t read this decision in full, I know what they tried to apply, and I’ve seen the claim. Whether or not they did the abstract idea analysis 100% properly is of little concern to me. If they did it wrong, then the other people can appeal. The bottom line for everyone is that the courts are applying the exact same analysis I’ve been advocating here for like a year or more now, and yes, it is difficult to do correctly, as I’ve been saying for like the past year. Sure, there’s going to be f ups. But I don’t care to evaluate everyone else’s work everytime they apply it. I have my own cases to apply it to.

    Plus, in a hypothetical instant case, a court may have fed up their analysis, but it in this hypothetical it appears that the analysis is actually quite easy to do, and they’re still going to fail regardless of whether or not the court fed up.

  4. Bilski didn’t pull out all of the picadors’ javelins that Giles Rich put into the State Street bull

    Nominee One for Best Line of the Day.

  5. IHP – what abouts digital xray displays… 101 fail? After all, only data sets bein manipulated and the end data is not “applied to anything

    pssst – your premise is leaking.

  6. Major Lolz Sunshine:

    Not sure what you mean.” and “What the fu …?!?!

    As typical – when ya be asked ta actually make a substantive contribution, you go and lose your meds and dont know which end is up.

    Gee, like the mere blog readers here havnt seen that before (well, ok Fei baby might not, but he is a new fish and actually expects the likes of you and 6 to listen well – O the chuckles there)

  7. Hey Shen, this scenario presents a reasonable opportunity for a cursory analysis based on MY way of seeing things (which is the only way that counts, right Malcolm?):

    Let’s dissect “counting the money in your wallet”. What is the stated object of this method? To achieve a “count” of something.

    In this case, you have identified the physical objects under consideration: the coins and bills. You choose the measuring equipment (eyes), and the system of measurement (established denominations of the currency in question).

    You then make observations that result in data.

    That data are manipulated according to operations carried out in step 2–specifically what those operations are is of no consequence. It could be a simple arithmetic summation, an rms calculation, whatever.

    The result of the data manipulation is a new data set–even if it is populated by only one data point, such as a single arithmetic sum, it is a new data set.

    That data set is stored in a data storage unit–the human brain.

    There has been no change to the stated physical object of the claim–the physical money. The new data set has not been applied to anything. The new data set, by itself –WHICH IS WHERE THE CLAIM AS WRITTEN LEAVES IT– has no substantial utility.

    101 fail.

  8. Shen–

    You needn’t have less faith in 101 than in 102, 103, and 112–the state of affairs is equally abysmal in all.

  9. Fei Shei: Malcom, you asked me ” you honestly think that it is reasonable to expect that [b]you[/b] could get past 101 with a method for counting the money in your wallet reciting”

    You didn’t ask me whether Courts would expect it to be patentable.

    What the fu …?!?!

  10. 6: “If the “test” were better laid out before then they wouldn’t have been confused.”

    Amen to that.

    However, at an even more fundamental level, if it had been known PRECISELY WHAT WAS BEING TESTED, the “test” would have been better laid out.

  11. Shen–

    There is no such thing as an articulated “real world benefit” test.

    Many things or occurrences have “real world benefits”, but not all benefits satisfy the utility criterion for 101 s-m eligibility.

    Shen, why don’t you give me a sample claim and I’ll go through a brief analysis–then we’ll see if it proves to be “a mess” or not! Whatever you want.

  12. INLA IANYL said in reply to 6…
    6, you make a mistake in saying that the claim covers every implementation of the abstract idea.

    Even the Court recognized that employing a computer is merely the most likely way that one would “employ a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk.” It is, of course, possible to use people instead of computers. Thus, the limitation of the claim to computers avoids preempting the abstract idea of “employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk.” It is then quite ridiculous to define the abstract idea as “employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk on a computer” in order to say that the abstract idea is preempted, but that is exactly what the Court did here. Don’t make the same mistake they did. You’ll come away with the same egg on your face.”

    Well said! But 6 won’t care. Me thinks 6 has had worse things than Egg on his face.

  13. 6, you make a mistake in saying that the claim covers every implementation of the abstract idea.

    Even the Court recognized that employing a computer is merely the most likely way that one would “employ a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk.” It is, of course, possible to use people instead of computers. Thus, the limitation of the claim to computers avoids preempting the abstract idea of “employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk.” It is then quite ridiculous to define the abstract idea as “employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk on a computer” in order to say that the abstract idea is preempted, but that is exactly what the Court did here. Don’t make the same mistake they did. You’ll come away with the same egg on your face.

  14. “Do you think it is reasonable to expect that a purely mental claim would be found eligible under 101?”

    Malcom, you asked me ” you honestly think that it is reasonable to expect that [b]you[/b] could get past 101 with a method for counting the money in your wallet reciting”

    You didn’t ask me whether Courts would expect it to be patentable.

    Like I said, we are going in full circles. Please, please, read my paragraph of my very first post, or just let me paste it here because I know you won’t

    “Seems to me the [Alice] claim is just a software implementation of a financial device. Would the Supreme Court have said the hedge method in Bilski was patentable if it had been implemented in software? I don’t think so. ”

    Please re-read my first post.

    You and 6 are too pre-occupied with your own conclusions, and downright condescending. You have not listened well. I find discussions with you very unproductive.

    Have a nice day.

  15. pingaling as long as you first provide the “claim as a whole” show

    Not sure what you mean. Try plain English, pingaling.

  16. Fei Shen you seem to be confused where I come from and why I am arguing what I am arguing

    You are the same commenter who said that there was a “mathematical algorithm” in the’720 patent claim, right? Trust me. I know where you are coming from. As to understanding what you are arguing, I’m not convinced that you know are capable of that as you seem to be unable to read and comprehend the meaning of your own words.

    We’ll find out soon enough, though.

  17. Sure Sunshine, I’ll take a look at what you want ta show – as long as you first provide the “claim as a whole” show.

    How about it?

  18. pingaling Nice goal post moving machinery there Sunshine. Ya forgot an element: pulling the money out your wallet

    Um, no, I didn’t.

    Unlike patent txxbxggers such as yourself, the Federal Circuit certainly recognizes that “looking at the claim as a whole” does not mean that the presence of any “transforming” step ends the 101 analysis.

    Let me know if you need proof of this, pingaling. I’m happy to provide (although it seems unnecessary).

  19. I will leave it to you to figure that out as an exercise to improve your reading, analytical and deliberation skills

    Won’t. Happen. Ever.

  20. who believes that a method carried out purely mentally is eligible for patenting

    Nice goal post moving machinery there Sunshine. Ya forgot an element: pulling the money out your wallet

    Unless ya claiming that you be pulling the money out “purely mentally,” ya gonna havta learn ta look at the claim as a whole. I be too lazy to get the Supreme Court direction to such, but Iza sure you can find it with less effort than your schlocking here (that is, if you take your meds first). This has been pointed out to you only like a bajizzilon times.

    Not sure if ya can do it, but ya gonna havta if ya want to have a legit legal discussion.

  21. OMG … we are going in circles.

    Malcom, I don’t even need (1) to be right.

    It has been a long discussion, and you seem to be confused where I come from and why I am arguing what I am arguing. I will leave it to you to figure that out as an exercise to improve your reading, analytical and deliberation skills.

    Have a nice day ;)

  22. Punch,
    Essentially you are proposing a burden for the applicant to assert utility in the claim and an objective s-u standard that will verify if the asserted utility is directed to a real world object.
    I probably don’t have much problem with the asserted utility requirement; clarity is good. But Your scraping the “real world benefit” test, and drawing the line on “real world object” approach sounds a lot like the M-O-T revolt against the “useful, concrete, tangible”. Also deciding what real world object is could be a mess too.

  23. a method for counting the money in your wallet reciting

    (1) pulling the money out your wallet and
    (2) [non-obvious mental steps],

    wherein the amount of money in the wallet is counted.

    When asked if such a claim would be found eligible under 101 Fei Shen says : It would get past 101 because it is not one of judicial excepted s-m. I am dead serious.

    And as 6 pointed out, dead wrong. Note that I did not ask you for a description of your fantasy as to how 101 should be applied (or not). I asked you if it was reasonable to expect that such a claim would be found eligible under 101.

    Once again, you do understand that there is nobody on the Supreme Court or in the Federal Circuit, or in the District Courts (that I’m aware of) or at the PTO who believes that a method carried out purely mentally is eligible for patenting.

    Do you think it is reasonable to expect that a purely mental claim would be found eligible under 101? If so, why? Before you answer, please re-read your strange answer to my earlier question (discussed above in this comment) and Section 101.

    After you complete that task, then consider how the Supreme Court expects patent law to be applied. Does the Supreme Court like rigid tests that allow patentees to play word games and subvert policy-driven laws by adding pointless “limitations” to otherwise unpatentable subject matter? Is it reasonable to expect that the Supreme Court would approve of an interpretation of 101 that would allow patentees to sue infringers who are practicing prior art steps (opening up a wallet) but thinking about their money in a “new” way?

  24. ping–

    Re-read the cases? Noooooooooooooooooooooooo!!!!!!!

    Ping, I’m talking about a rational logical system, not about the ridiculous and inconsistent patchwork that is CAFC and USSC patent jurisprudence.

    As you would say, “Um, no. Go back and read the triumvirate of dictionaries. Try not to take more shots to the head.”

    Look, one of the whole points is to give no effect to insignificant post-solution activity as far as s-m eligibility under 101 is concerned.

    The key point is “insignificant”. The claim must be drafted in such a way that the post-solution activity is NOT insignificant–that is, the specific and substantial utility must relate to that post-solution activity. This is permissible under Flook, wherein it was stated that “…a process is not unpatentable simply because it contains a law of nature or a mathematical algorithm”

    Furthermore, sticking with Flook, my formulation does not run afoul of the prohibition on exalting form over substance by including post-solution activity in a claim. The post-solution activity must of course be significant, and in order for it to be so, the claim must be written in a suitable form. The form is not exalted above the substance in such an instance–indeed, it follows necessarily from a prior consideration of the basic principle of specific and substantial utility that is maintained in 101.

    What judges need is a direction, and a way to characterize existing precedent which will permit them to proceed in that direction. I think my 101 analysis, with some work, could serve well in this regard.

    I know it’s a stretch–so far.

  25. “I am dead serious. ”

    And also dead wrong at the same time! Read the decision we refer to as “flook” to see why. I’ll leave it as an exersize for you the reader rather than explain it to you in depth myself :)

  26. Some formulation like this is required to establish a consistent and rational foundation that permits a meaningful s-m eligibility analysis.

    Again, legal shorthands will of course be developed to make claiming easier and more elegant, but since the shorthands will all derive from a common basis, they will all be consistent with one another, unlike the situation we now experience. Nothing will be categorically excluded from s-m eligibility, such as software. It would replace the “bootstrapping” decried by Ned with the “reason” for which he so rightly wishes.

    Hardcore patent attorneys will dismiss my analysis as having gone off the rails–but the current rails just disappear into a swamp where it is every man for himself. As Ned described, we are left stranded in the middle of the swamp, with no compass, no stars, and fog all around.

    We need new rails, able to support the same load and configured similarly with the same gauge, to permit existing vehicles to travel.

    I have focused on the concept of substantial utility for a couple of reasons–it permits a new direction to be taken, but it permits sufficiently familiar analysis to proceed effectively without alienating everybody. Substantial utility is useful:

    1) to preserve the attitude that 101 should be sufficiently robust to exclude a not-insignificant number of applications. I used to believe that almost anything should be allowed to pass 101 muster, and that the real analyses should take place in 102/103/112; however, in trying to work up a good obviousness formulation, I realized the tremendous advantages that obtained from using asserted utility as a filter. 101 remains, and is actually strengthened.

    2) to maintain the existing lexicon. “Substantial utility” is a concept that has been articulated often in existing jurisprudence. I know the meaning which that jurisprudence assigns to the concept, but I find the term to be conveniently amenable to a different, more powerful, and more useful interpretation. The language everybody has grown accustomed to is preserved, thus maintaining some sense of continuity.

    As to your last point, “knowing how to use” and “actually using” are not the same thing. There must occur a use in order for s-m eligibility to exist. That is why an oil painting, although when combined with pre-existing interpretive codes has much informational content, is not eligible s-m.

  27. So Fei, you honestly think that it is reasonable to expect that you could get past 101 with a method for counting the money in your wallet reciting

    (1) pulling the money out your wallet and
    (2) [non-obvious mental steps],

    wherein the amount of money in the wallet is counted.

    Just let me know if you’re serious or just pulling me leg. I’ll grant you that step (1) is a “transformation”.

  28. ” If the “test” were better laid out before then they wouldn’t have been confused.”

    Fair. I have been singing this tune since my first post. I am glad we finally in agreement on something, I hope.

    I will also admit 102/3, 112 probably doesn’t fare much better than 101. But, there, at least, you have the PHOSITA vintage point, the indentity rules, jurisprudence guarding against hindsight bias, etc. I therefore have more faith (maybe not by whole lot) there than 101’s shaky footing in the abstract idea exception.
    Like you say, we shall see.

  29. “But that’s not true if the mental steps are non-obvious (which is why I brought that element up specifically in my previous comment). And yet there is no doubt in any reasnoable person’s mind that such a claim will be found unpatentable.”

    Why no doubt in reasonable person’s mind? IBP and I are pretty reasonable people and we have been at it for awhile now.

    Sorry I disappointed you again. Working on it … Getting there.

  30. OMG, has anybody read this whole post?

    Yes, twice.

    Still although very intriguing, your doctrine of substantially utility is too narrow. Why transformation/change of a physical charateristic must be immediate to satisfy substantial utility?

    Could information be useful in its passive form because we know how to use the information?

  31. “I believe 6 would say, the sooner these silly things go away the better, be it 101 or other provisions; why 101 is so special, I know what abstract is when I see it or I know when textbooks in relevent fields tell me so, who cares what label we give. ”

    Now Fel, that’s not really what I’d say. Surely I believe they should go away post haste, but I can understand the reason behind needing to care why the reason is that they’re tossed out. The no. 1 reason to state that reason is so that people can’t get around the exception (in the case of 101) or can’t otherwise play trickster (looking at 112 or 102/3). Indeed, the whole reason we’re in this mess is because some people were able to mislead the federal circuit in a few cases in the 90’s. If the “test” were better laid out before then they wouldn’t have been confused.

  32. “Well, I probably would be much less frustrated if the Court just said hedging method is not useful arts or establish some sort of technological art standard with a policy reason. I thought I made this clear in my very fist posts. ”

    We all would. Unfortunately for us, the Federal Circuit Screwed up SS and ATT and congress made a colossal blunder in passing a section of lawl that was misinterpreted by some misled USSC judges into thinking that business methods were sanctioned by congress.

    But don’t worry. It’ll get worked out.

  33. OMG, has anybody read this whole post?

    Um, no – that’s what the little comuter tool on the side is for – scrolling down past the yammering.

  34. IBP,

    That is abstraction in a nutshell.

    Um, no. Go back and re-read the triumverate of cases.

    Try not to take more shots to the head.

  35. or establish some sort of technological art standard with a policy reason. I thought I made this clear in my very fist posts.

    You did.

    Plus, doesn’t it frustrate you to see a result is reached for a wrong reason?

    Lol Fei baby, – yous dont know Sunshine at all, do ya?

    Ya only havta observe Malcolm’s answer when this was pointed out above – the dude downright glories in wrong reasons.

  36. Fei Shen Certainly counting money in one’s wallet should never ever ever be patentable, but not because the underlying s-m is abstract, rather because it is a well-known/obvious application of a simple abstract idea.

    But that’s not true if the mental steps are non-obvious (which is why I brought that element up specifically in my previous comment). And yet there is no doubt in any reasnoable person’s mind that such a claim will be found unpatentable.

    You came close to the answer, Fei. But then you blew it by inserting the word “simple.”

  37. Well, I probably would be much less frustrated if the Court just said hedging method is not useful arts or establish some sort of technological art standard with a policy reason. I thought I made this clear in my very fist posts.
    Certainly counting money in one’s wallet should never ever ever be patentable, but not because the underlying s-m is abstract, rather because it is a well-known/obvious application of a simple abstract idea. I believe this underlies the Court’s reasoning in Bilski.
    What’s the harm of the abstract idea exception jurisprudence as announced in Bilski? I believe 6 would say, the sooner these silly things go away the better, be it 101 or other provisions; why 101 is so special, I know what abstract is when I see it or I know when textbooks in relevent fields tell me so, who cares what label we give.
    However, good result doesn’t make good law. Here, in this case, you see the judge already willy-niully starts to apply the abstract idea exception. Plus, doesn’t it frustrate you to see a result is reached for a wrong reason?

  38. Max–

    Interesting questions. Skip to the end for an explanation of where this is coming from.

    First, I’ll look at the situation in general, and then address your 4 specific scenarios.

    At the outset, the terms you have used require definition. Although it didn’t form the basis of any of my thinking, I will direct you to the wikipedia page on “data”, which I think actually gives a reasonable definition thereof:

    data–“qualitative or quantitative attributes of a variable or set of variables”

    Serendipitously for me, the page goes on to add that “Data are often viewed as the lowest level of abstraction from which information and then knowledge are derived.”

    The sequencing of events is thus: a quality or characteristic of something real (either a physical object or a physical phenomenon) is identified, and then a variable or set of variables is chosen to describe that quality or characteristic, and the character of the attribute(s) of that variable are defined. A sensor capable of detecting information about that attribute (a rod, a cone, a photosite, etc) is then either purpose-built or specially selected for its ability to undergo some change in response to the receipt of information about that attribute (the act of making an observation). The sensor is incorporated into a device that is able to measure the physical change in the sensor according to some chosen paramter, and which applies a coding to the physical effect of the information upon the sensor. The result of this coding is a recognized symbol or set of symbols that is dependent on the coding system chosen and applied—these are generally known as “data”. The outputting of this symbol or set of symbols (data) from the device represents a signal. The combination of the set of symbols and the logic of the coding is the information content of the signal.

    Even a binary digital representation (bit) is a symbol—it represents the coding of an observation (the physical effect of the informationupon the sensor) made of an attribute of a variable.

    Data, being a set of symbols, are abstracted from the reality of the physical object or physical phenomenon that is under observation. They are representations of qualitative or quantitative attributes of a variable or set of variables that describe a quality or characteristic of that physical object or physical phenomenon.

    In a patent application, any method claim that performs any operation on this data, and that does not have its utility described in terms of a change (resulting from human activity) in the quality or characteristic of the observed physical object or physical phenomenon, has as its result an output of a symbol or set of symbols (a signal), which is only representative of the quality or characteristic of the observed physical object or physical phenomenon, and which has therefore been abstracted from reality.

    Any such claim may generally be identified as “abstract” in the sense that it has no substantial utility, and therefore should not constitute eligible s-m under 101.

    Now to address your 4 specific scenarios:

    1) “data compression”

    If claimed as a method, “data compression”, or a specific operation or series of operations (an algorithm) performed upon, or applied to, a specific type of data has no intrinsic utility. The utility must relate to a physical (substantial) effect that the method has, rather than to the performance of the method itself. Any asserted utility of any such method claim is therefore insubstantial, and the claim would not constitute eligible s-m under 101.

    Any such claim must therefore have its asserted utility described in terms of the physical medium that is used to “store” the data. Therefore, an article claim to a general purpose computer that is configured to perform the operation or series of operations would have as its asserted utility a reduction in physical volume or energy requirement of a given capacity physical data storage unit, and would therefore constitute eligible s-m under 101. (Incidentally, under such an analysis, it would not matter whether the configuration was made via software or hardware.)

    If an applicant chooses the method form of claim instead of, or in addition to, the article form of claim, the asserted utility must likewise relate to a physical (substantial) effect that performance of the method has—for instance (speaking very generally), such a method claim could begin with a (necessarily limiting) preamble such as “A method for reducing the physical volume of a given capacity physical data storage unit, said method comprising…”. The asserted utility of any such claim would be specific and substantial, and the claim would therefore constitue eligible s-m under 101.

    2) “methods of image enhancement”

    If the claim is framed as an article claim and relates to a physical quality of the arrangement of physical components that constitue an “image”, then it is eligible s-m under 101—asserted utility is specific and substantial.

    If the claim is framed as a method claim, the utility of the claim must again relate to something physical. Operations performed on data (symbols) result in nothing more than a new set of data (symbols), leaving intact the abstract character of the data (symbols). The asserted utility of any method claim must relate to a change in the physical representation of the data (symbols). If the data are translated into a pattern of ink droplets deposited onto a substrate, a physical article results, and any change resulting therein can be described in physical terms; if the data are translated into a series of voltages (a signal) which are then applied to LCD cell electrodes as drive signals, the ultimate physical effect is that a photon is blocked by a polarizer and not admitted to pass in a certain direction—again, the ultimate effect is physical and can be described in physical terms.

    In this way, “artistically-framed” or “aesthetically-described” effects would lack substantial utility and not be eligible s-m under 101.

    In an “image enhancement” situation that involves things like interpolation, what is happening is that data are changed (values of existing data are changed, or data is added or subtracted). When it is remembered that the combination of the set of symbols (data) and the logic of the coding is the information content of the signal, it can be seen that when the data are changed as a result of actions determined by human decisions, the information content of the signal is changed.

    In order for the information in any signal to have any effect in the real (substantial) world, it must be sensed and interpreted by something or someone that understands the original coding, and that can apply it to the signal to decode the signal. The sensing of any such signal is a physical occurrence—all sensing has a physical basis, and therfore a signal capable of being sensed must also have a physical basis. This physical basis needs to be the object of the asserted utility in order for the claim to have s-m eligibility under 101.

    At its core, what an “image enhancement” claim would be all about would be the creation and elimination of insubstantial data (symbols). If those data are output as a signal to a machine that can decode the signal and apply the information to a physical article, as in a CNC system, then the asserted utility can be directed to qualities or characteristics of the resulting object, and the claim has eligible s-m under 101.

    And so on.

    3) “methods of data encryption”

    Same logic applies as above for image enhancement. Data are insubstantial symbols, and by themselves lack specific and substantial utility. The utility of a data encryption claim relates to how much time it takes to decipher the coding system, and here we have our first interesting scenario: Is the rate at which a physical process occurs to be considered a physical property of that physical process? All claims directed at the time taken to effect a particular physical change can of course be described in terms of the actual physical actions themselves—the number of revolutions of a bit, etc.—and the time requried for an individual such action to be performed.

    Claims describing the RATE of doing something physical should be seen as a permitted and elegant shorthand for what would otherwise be a long-winded and inelegant, yet very precise, method of describing the effecting of a physical change. This shorthand would be a legally-recognized tool that would enable more effective claiming.

    Thus, rather than merely asserting a vague and insubstantial utility such as “enhanced security”, and rather than having to assert a precise substantial utility such as something like “less changes of state in solid state circuitry”, legally recognized shorthand would enable a substantial utility to be asserted as something like “A method that necessitates the performance of a large number of operations to decode the data in a signal given a particular level of knowledge of the original coding, said method comprising…”—i.e. decoding will take longer, given a particular rate of decoding activity.

    4) “graphical representation of data sets”

    See #2 above.

    These have all been quick, off-the-cuff analyses, but I think that the logic works. Asserted utility must always relate to a change in a physical object or a physical phenomenon in order to be substantial, and various legal shorthands would be developed to avoid otherwise absurdly reductionist, but very precise, statements of utility.

    At this time we use various such legal shorthands, but they are almost made up on a case-by-case basis. They would need to be formalized, and not, as they do now, represent simply the results of how a particular judge “understands” the case before her, a situation that is not amenable to any standardization. The current situation has resulted from the lack of a basic and consistent rational formulation of a test under 101, and has resulted instead from the putting of the cart before the horse—we have all sorts of shorthands that have not derived from a common basic test, and which are thus not necessarily logically consistent with one another.

    This results in situations such as those where parties can argue endlessly over a proposition, without ever coming closer to a resolution—because they do not agree on the premises upon which the argument occurs.

    Thus we have the situation where some are pro-software eligibility, and some opposed—and the competing arguments proceed from different basic premises, neither of which has any consistent rational basis.

    In fact, the entire characterization of the “software issue” as one of eligibility or not ineligibility is totally misguided. Of course software per se is a positive human development, and should be encouraged on a policy level—the question is HOW. In patent terms, the relevant question is not “eligible or ineligible”, but HOW TO CLAIM SUCH THAT THE SUBJECT-MATTER OF THE CLAIM IS ELIGIBLE ACCORDING TO RULES OF ELIGIBILITY.

    Applicants and their representatives have understood this, and have answered the question feebly in such examples as Beauregard claims. Because the other half of the issue (the rules of eligibility) are not well-formulated and articulated, even that attempt achieved no lasting effect other than controversy.

    The rules of eligibility require a better formulation and articulation, and that is what I have tried to achieve.

    Good questions, Max.

    OMG, has anybody read this whole post?

  39. Shen–

    Exactly.

    It REPRESENTS the real world article.

    But it is NOT the real world article.

    That is abstraction in a nutshell.

  40. While counting 1,2,3,4,5 in abstract is not an ACTION, counting how many dollars I have in my wallet mentally when I need my lunch money is an ACTION, IMHO.

    Yes, but there’s not a Supreme Court justice or a judge in the country that would let you patent a method of mentally adding up the money in your wallet, even if you throw in a “limitation” of opening up your wallet and fingering through the bills, and even if your mental actions are non-obvious.

    You should ask yourself “Why is that?” And when you try to come up with the answer, remember that there is nothing in 101 that says that actions carried out mentally are unpatentable. So why does everyone* agree that they are unpatentable?

    *does not include nutcases and/or patent txxbxxgers

  41. Really? 7,146,931, among many others, says otherwise.

    You’re still missing the point, Fei Shen. Usually that’s intentional, but I somehow doubt it in your case.

  42. Punch, I think I miss another key point of uour argument: action is ACTION only if it is performed on real world article, i.e. counting 1,2,3,4,5 in one’s head without any reference does not perform any ACTION on real world article. I am with you on this point to the extent performing mental steps in abstract is not an ACTION. But as Max, correctly I think, pointed out computer data often does represent real world article, for instance money or assets in this case. While counting 1,2,3,4,5 in abstract is not an ACTION, counting how many dollars I have in my wallet mentally when I need my lunch money is an ACTION, IMHO.

  43. Fei Shei In my mind, the bar for qualifying as real world benefit is fairly low: some articulable, identifiable real world effect as opposed to unidentified reseaching utility of the ESTs in In Re Fisher.

    The ESTs could be used to provide essential nutrients to a companion animal in need thereof. Or do you think that keeping a pet alive is not a substantial utility?

    That’s a rhetorical question. I believe you are missing an element from your statement of the utility test.

  44. Punch,
    Perhaps I should’ve elaborate my underlying thoughts a little better. I do appologize.
    If I understood your correctly and if you allow me to rephrase your arguments in a very coarse way, you seemed to be saying steps performed in abstract without any ACTION imparting the results of those steps to the public does not produce real world effects and thus does not have substantial utility. So someone and some apparatus could perform brilliant steps enclosed, but those steps are abstract because they lack real world effects (I think this what you meant by “no interpretation or receipt of the signals”). Right? Then you went on to say the Alice claim is such because it merely transmits signals.
    Again, I think this is very intriguing, but two comments. First, it’s hard for me to imagine the Alice claim is abstract because I wouldn’t call an accountant who will call me whenever my bank account is low an abstract figure that merely transmits signal without being really substantially useful.
    Second, your notion of substantial utility seems to be unduly narrow, maybe because you have a different notion what constitutes substantial utility (???). Court’s characterization of substantial utility is “benefit receieved by the public; it does not have to be a commercial success”. In my mind, the bar for qualifying as real world benefit is fairly low: some articulable, identifiable real world effect as opposed to unidentified reseaching utility of the ESTs in In Re Fisher. Nor do I think patentee needs to recite a specific mechanism imparting the result of the invention produces to the public in order to satisfy the substantial utility requirement as long as the public is enabled to use that result. Let me be more specific about this last statement. Say someone first figures out bending antenna at certain range of angles would vastly improve signal reception and he claims for an invention that embodies so angled antenna (see Makay radio). Now is the inventor required to recite a mechanism to impart the result of his invention in his claim in order to satisfy the substantial utility requirement, i.e. adding specific structural limitations? I don’t think so because there are known ways to utilize this invention, like installing it to a TV set, and the public are aware of those ways. In that sense the public is enabled to recieve the benefit of this invention.

  45. Shen–

    We are discussing the patent law regime in the United States, and how the s-m of a drafted claim either is or is not eligible for patent protection under 101, NOT the hypothetical actions of some fictional accountant.

    I have already answered your question.

    Your difficulty arises from your apparent inability to characterize a situation in patent-centric terms. Why don’t you set up your hypothetical better–that is, make it somehow involve a patent or an application for patent.

    The patent law regime is an entirely inappropriate paradigm to assess the perceived worth of a bean counter to her employer.

  46. By “settled”, me thinks that Ah Pook indicates that the anti-software patent folks have agreed to call it a day and stop their assault on the US patent system.

    He be right – the onslaught has not stopped with the Bilski decision.

  47. Where O where has my IANAE gone?

    The sheep are in the meadow, waiting to be shorn.

    The ducks are sleeping, not yet flown.

    The seeds are the shelf, yet to be sown.

  48. is that 101 being used in the manner under discussion is actually the lawl

    Actually sport-o, the discsussion is that 101 being used in the manner that this court used it is NOT the law.

    Were it be the law, then there would be no discussion.

    Try to keep up.

  49. Ned-O ,

    Sharing your meds with Malcolm is never a good idea.

    To wit: . Isn’t that what Malcolm Mooney actually said?

    Um No.

    by your straight-forward thinking

    Um No.

  50. Anyone who thinks that the question of whether “mere computerization” of an otherwise ineligible abstract method gets past 101 (whether expressed as a computer system or as a computerized method) has truly been settled is delusional.

  51. Let me slow it down for you. While 1+1=2 is an abstract idea, making sure two things, by counting 1 and 1, exist is not a freaking ABSTRACT idea. Get it?

    Neither would counting 1 and 1 will preempt 1+1=2.

  52. Maybe I am too fast for you. Or maybe you are just too stubborn like others. Or maybe both.

    You and the court doesn’t understand accounting balance in a bank account and making sure it is not below a certain amount is not an ABSTRACT idea. The idea is so obvious that you can get over it is not ABSTRACT.

    Let me slow it down for you. While 1+1=2 is an abstract idea, making sure two things, by counting 1 and 1, exist is not a freaking ABSTRACT idea. Get it?

    I do hold an advanced degree in math.

  53. I kinda get he is saying a method like counting 1,2,3,4,5 in one’s head has no substantial utility. But I am with you, computer data represents real world article.

  54. Punch,
    Are you telling me an accountant who dutifully notifies his client whenever the client’s bank account balance drops below a threshold has no substantial utility?
    I guess I am confused? What does method of signaling have anything to do with substantial utility for Alice’s claim?
    Following your logic, I think there is ACTION, being the instruction sent to the client, which is a real act, is it not?

  55. I’m enjoying the discussion, but I’m not sure I agree with your:

    “There must be an act performed on the real article that is the subject of the claim in order for s-m eligibility to obtain.”

    Would you care to comment on the patent-eligibility of subject matter such as methods of data compression, methods of image enhancement, methods of data encryption, methods of graphical representation of data sets (to name but a few inventions in the field of data processing). Is “data” a real article, or must we include in the claim a reference to a real article, be it the surface of the moon, the engine of the racing vehicle whose performance is being more informatively displayed on screen thanks to the claimed method, or the credit card whose characteristics are being transmitted over the net?

  56. “Shen”–

    You are confused. The issue is not “producing a real world effect”, but one of “the claimed method having specific and substantial utility”.

    The claimed method is the claimed method, and the analysis remains the same.

    As Malcolm is so fond of saying, merely substituting a POWERFUL COMPUTER BRAIN for a human brain has no effect whatsoever on the eligibility of the s-m, which remains a “method of signaling”.

    Furthermore, just because the photons or ink molecules that transmit the signal, and which are arranged in such a way as to constitute symbols that have a pre-determined meaning, are real, does not invest the claim with s-m eligibility.

    Any utility remains insubstantial. There must be an act performed on the real article that is the subject of the claim in order for s-m eligibility to obtain.

    It doesn’t matter who or what performs the method steps–the claimed method still lacks s-m eligibility.

  57. “Will you say an accountant that functions exactly the same as the Alice computer program does not produce real world effect to his/her clients? ”

    Why would it matter? The answer is: it doesn’t.

  58. “I find myself agreeing with Ned and others that the test is b.s.”

    Well of course the test is bs. But then again, what the applicant’s are attempting, i.e. to get around the courts having ruled some areas of subject matter unpatentable, is also bs. BS vs BS. Meh. I say call it for the courts. And that’s what the courts did.

  59. “May I kindly suggest the world “enabling” might have different meanings in different contexts as it sometimes may be used loosely by a drafter.”

    You sure can, but you don’t need to as I’m already well aware.

    Like I said, it is impossible to provide an enabling disclosure of enabling something that was already enabled previous to the step occuring. One cannot, as you might say, re-enable it.

    Again, you’re not bright enough or well read enough to understand what the issue is.

  60. Again, you don’t seem to understand. The claim is to a computer which operates according to an abstract idea. Yes. We get that. The claim also is drafted in such a way as to go out of its way to preempt the abstract idea.

    The court thus got it quite right, and the sooner you understand what the court is taking issue with the better.

  61. Malcolm, I think the munch-kins are flummoxed by your straight-forward thinking on this issue, thinking that finds support in Supreme Court precedent.

    If a computer is old, it not made patentable by the recital of a new use. Computers calculate numbers. Varying the number calculated does not make the machine a new machine. Such can be claimed, according to 100-101, as a new use of an old machine – as a process.

    Similarly, if a method is old – calculating a number by a certain known process or a known series of steps, simply adding that the old process be calculated using a different computing apparatus does not change the result that the process itself is old.

    What we have here above is somewhat of a mixture of statutory subject matter classes. If the claim is to a machine, the novelty cannot be in method of use steps. Likewise claiming a method where the alleged novelty is in the machine. Both examples mix classes and for THAT reason are non statutory.

    Ditto all of the above by adding mental steps to an old process, or printed matter to an old machine. The added material is non statutory.

    When something is old and the differences are non statutory only, the claim is unpatentable, but under what statute?

    That is the question. 100/101 or 102/103?

    Now the Supremes have made it “clear?” that recital of insignificant extra solution activity to an otherwise non statutory process does not make it statutory. Isn’t that what Malcolm Mooney actually said?

  62. :D, I think the claim needs to be looked at more closedly for crying out loud. I don’t think the D.C. judge got it, neither did many folks here. It is essentially a computer dummy accountant. Silly, yes, but nothing abstract about it under Court’s definition of such.

  63. Max,
    This seems to be the Court’s concern at the moment. Isn’t your approach a de facto technological art standard. I think Ping is right to say you are very Euro-based. :-)

  64. Punch:
    Hi, intriguing thoughts … but I am not sure I am following your enabling not having real world effect analysis.
    Will you say an accountant that functions exactly the same as the Alice computer program does not produce real world effect to his/her clients?

  65. Malcolm Mooney said in reply to ping…

    I mean, I know why many trolls and/or banks who seek to abuse the patent system to line their pockets might be adversely affected. And their lawyers would have to find something useful to do instead. But other than this tiny tiny minority of greedy ealthy people, who could possibly give a rats axx and why?”

    How about the majority of people that are not greedy and want to be wealthy? Being rich is not a bad thing. being rich or the desire to be rich does not mean you are greedy. The fact is that rich people give more to charity and do more to help the less fortunate than any other economic class.

    Who do you think poor people go to when they want money? Other poor people? No, They go to wealthy people.

    Who do you think poor people go to when they want jobs? Other poor people? No they go to wealthy people.

    Who do you think universities go to when they want donations to build buildings and pay professors? Poor people? No they go to wealthy people.

    Who do you think poor nations go to when they want food, medicine, rand relief of all kinds? Poor nations? No, they go to America, still the riches and greatest country in the world.

    And who do you think America itself, goes too when it wants more money for it’s poor people? Other poor people? No, it goes to the wealthy for more taxes.

    Being wealthy is a good thin, being wealthy is what all the world and everyone in it dreams of and wants. And why all still love, and envy America, the greatest country in the world!

    God Bless The Patent System

    God Bless the USA!

  66. Although Bilski doesn’t invalidate software patents per se, (it leaves a bit of an opening) it does seem make it difficult to create a software patent that would invalidate a close review.

    We’ll see how this all plays out as time goes on.

  67. Why does this thread display differently depending on how one gets here?

    Sometimes all comments display, sometimes most comments display, sometimes only 4 comments display.

    Help!

  68. +1 to Mike and TINLA. I would love to see an obviousness case out of this. But if it’s just patentability, well, an appeal to the obvious pro-patentability panel might have a pretty good chance. Bilski didn’t pull out all of the picadors’ javelins that Giles Rich put into the State Street bull.

  69. Further, a c.r.a.p.p.y district court decision cannot be attributed to the district court judge alone.

    She had c.r.a.p. jurisprudence to work with, and no meaningful guidance.

    GIGO

  70. Although I believe that I understand the CAFC’s analogical basis for the so-called “preemption doctrine”, I find myself agreeing with Ned and others that the test is b.s..

    We on this board dealt with these issues previously in this Prometheus thread:

    link to patentlyo.com

    The CAFC really believes that it is “onto something” with the “doctrine”, when in reality the “doctrine” was developed solely as the result of the court’s failure to develop a body of coherent 101 jurisprudence (in association with the SupCt), and its resulting lack of any rational and consistent analytical framework for s-m eligibility.

    The court has failed to develop a basic, primary logical s-m eligibility analysis, and has therefore had to resort to analogical, secondary logical s-m analysis in the form of the “pre-emption doctrine”. This is a type of “bootstrapping” that another poster referred to earlier.

    The preamble suggests that the claim is a method of “enabling” something. IMHO, the only meaningful way to characterize the preamble is as limiting–see our discussion at link to patentlyo.com

    The preamble must therefore be considered in any analysis of the claim, including any 101 analysis.

    The concept of “enabling” exists in the world of potentiality, not actuality. According to the claim, there is never any action ever taken in the real world. As I suggested in another thread, method steps require ACTIONS to have an effect in the real world. At some point, the “wave function” of abstracted steps MUST collapse into an ACTION step in order to avoid the fatal quality of abstraction.

    Because the result of the “process” of the claim is to transmit a signal, but no action is actually taken on the basis of the receipt and interpretation of that signal, no ACTION ever occurs in the real world.

    Because no ACTION occurs, the claim should fail 101 because its UTILITY is not specific and substantial–in particular, it is not SUBSTANTIAL. It involves nothing of SUBSTANCE–that is, there is no action taken to modify anything of substance–i.e. anything existing in the “real world”.

    Such a characterization of “substantial” departs from the narrower meaning of “not trivial”, but it permits a consistent primary logical analysis of s-m eligibility that avoids the needless “bootstrapping” and analogical reasoning of the so-called “preemption doctrine”.

    “Methods of instructing”, as is this claim, are a subset of “methods of signaling”, which never have a substantial utility. They provide information upon which a decision MAY be based, and upon which an action MAY subsequently be taken. As opposed to a “method of transmitting a signal”, a “method of signaling” exists in the world of potentiality, and has no substantial utility.

    101 Fail.

  71. “But they are not unredeemed business methods. Rather, they are business methods that improve useful arts ie use technical means to solve an objective technical problem in a non-obvious way.”

    In other words, they’re business method oxymorons which are only considered business methods by someone who is re tarded.

  72. lulz, I think the whole issue in this thread is that 101 being used in the manner under discussion is actually the lawl tardface.

  73. It is merely implicit that some math takes place incidentally to the execution…

    Lamest. argument. ever.

  74. I never said that they were. Nor is there any reason for you to believe me to have said such an outrageous thing.

    Ya see Fei baby, it be lie this: 6 has his own version of “abstract” that includes the mental abstraction of anything written down. Ya gotta hand it to him – the ultimate in job nullification. Everything’s abstract – even machines like this one.

  75. Fei I will reply here, on the end of the thread, because if I reply directly below your relevant posting, few will read it.

    Sorry Maxi – with the new format and the name atop the post, it dont matter where ya stick your comment – most see the Euro-trash and ignore.

    Me? well, ya be a source of chuckles that just dont stop.

  76. Are you insane? Software patents are alive and well. It would be wonderful if a ruling came along to invalidate them completely in the US, but that’s not what Bilski does

  77. Fei I will reply here, on the end of the thread, because if I reply directly below your relevant posting, few will read it.

    The US Constitution allows Congress to legislate for a patent system (monopolies, restraints on trade) provided it promotes useful arts. That implies that patents that go beyond useful arts are not validated by the Constitution.

    SCOTUS split 5:4 when one Justice flipped. It was a close-run thing whether business methods were to be recognised as patent-eligible.

    Perhaps somebody belatedly explained to the Justices that the EPO issues business method claims every week. But they are not unredeemed business methods. Rather, they are business methods that improve useful arts ie use technical means to solve an objective technical problem in a non-obvious way.

    SCOTUS is holding open the option to copy Europe ie stay faithful to the Constitution and GATT-TRIPS.

    Wishful thinking? Perhaps. I am quite happy to wait and see.

  78. “Now, there is a reason to believe that the first group’s patent application might be denied because it is abstract, while the other two applications seem to be slam dunks. I fail to see any good policy reason for such a result. I hope the Court will clarify.”

    This policy debate is between the anti patent forces like Mooney and 6 that believe that the only “thing” patentable is what you can drop on your foot, and the the pro patent forces that understand that the new science of the quantum age has extended technology to systems, computers, methods and processes of all kinds.

    It’s a classical battle of progress Vs. the status quo that even has the SCOTUS divided. Fortunately for now the Courts that matter are on the side of those that want to advance the useful arts and not retard it.

    I look forward to the day when some of my patents reach the SCOTUS if needed.

    My team is so well versed in the new quantum age of science and technology that we will wipe the floor with anyone that dares to try and throw us back in the 18th century.

  79. “I am not a PHOSITA in finance and haven’t had chance to read the spec, so I don’t know what adjustment in accordance … of claim 3 involves, but I suspect it involves accounting as well. ”

    What it incidentally involves is not at issue here. I don’t know how to tell you this any more straightforwardly than that.

    “At any rate, why do you think simple accounting like these steps is abstract in the sense of “fundamental truth; original cause; or motive”?”

    I never said that they were. Nor is there any reason for you to believe me to have said such an outrageous thing.

  80. “I meant 102/103/112 to decide which fields have more patentable matters. ”

    Yes, but why only those 3? What is it that you have against 101 being used in the same manner?

  81. You and I seem to have different definitions of math. In my mind, calculus is math and so is 1+1=2.

    Adjusting and making sure something is less than something is accounting and math. I am not a PHOSITA in finance and haven’t had chance to read the spec, so I don’t know what adjustment in accordance … of claim 3 involves, but I suspect it involves accounting as well.

    At any rate, why do you think simple accounting like these steps is abstract in the sense of “fundamental truth; original cause; or motive”?

  82. allowing only those transactions that do not result in a value of X being less than a value of X

    This claim is 114.75% pure cxrxxp.

  83. “The preamble of this claim pretty much says it all. It’s a system for “enabling” a task that is already enabled and has been, well, since forever. ”

    I had a case one time that mentioned that something or other was being enabled in one of the steps. I rejected them under 112 1st for lack of enablement. It is impossible to provide an enabling disclosure of enabling something that was already enabled previous to the step occuring. One cannot, as you might say, re-enable it.

    No I actually did that irl. They amended.

  84. You could if they were doing what is going on in this claim. Just because the abstract idea also involves some math perhaps being performed implicitly doesn’t mean that there is a specific mathematical algorithm present. In this case, there is not a specific mathematical algorithm present. It is merely implicit that some math takes place incidentally to the execution of the abstract idea.

  85. But for some reason 101 is a special statute with which you have a quarrel with the fact that it also decides which fields have more patentable subject matter?

    Why is 101 so special to your heart?

  86. Sunshine – you been taking listening pills from Maxie?

    Allow me to quote, well, me:

    “please explain to me”

    lol – Um, no.

    But Iza sure that one of the “software is maths” folk will explain what “computer configured to” means.

  87. The modern way to repeat the Constitutional meaning of “useful arts” is the TRIPS “all fields of technology”.

    Um, no Maxie – most decidedly not.

    As I done said before – stay outa US law – you have no clue here. Zilch.

    Sides which Maxie – this done flat out disagree with the no-technological-tests rule – aintcha been listening?

  88. Huh? why? They are silly but not abstract.

    Do you have 7,8 year olds doing silly math projects, like simple accounting of households stuff? Do you call them abstractionists?

  89. I have no quarrel with the approach of letting 102/103/112 decide which fields have more patentable subject matters.
    The Court analysis of abstract idea in Bilski was misplaced and under developed.

  90. “(b) electronically adjust … allowing only those transactions that do not result in a value of said shadow debit record being [b]less[/b] than a value of said shadow credit record; and

    (c) generate an instruction to said exchange institution at the end of a period of time to [b] adjust[/b] said credit record and/or said debit record in accordance with the [b]adjustment[/b] of said shadow credit record and/or said shadow debit record, wherein said instruction being an irrevocable, time invariant obligation placed on said exchange institution.”

    This is a mathematical algorithm? No, sir. Those are parts of an abstract idea.

  91. “If we believe strongly that software techniques, such as methods to enhance data security, are patentable, then I don’t see why techniques to marshall financial transactions are not likewise patentable, for both, seems to me, use some sort of mathematical theories (sorry, for the loose term, but I hope you get what I am saying) to reduce risks.”

    That’s a pretty big assumption which you made for no apparent reason.

    “I think methods of social science or arts are abstract, ”

    Oh, you mean like finance?

    “The Court’s disaffirmance of M-O-T test and the State Street test gives me a reason to believe Court’s view of patentable subject matter is based on field of applications.”

    Not really, it just so happens that some fields have more unpatentable subject matter than others.

  92. You want me to identify the mathematical algorithm in the claim in this case?

    (b) electronically adjust … allowing only those transactions that do not result in a value of said shadow debit record being [b]less[/b] than a value of said shadow credit record; and

    (c) generate an instruction to said exchange institution at the end of a period of time to [b] adjust[/b] said credit record and/or said debit record in accordance with the [b]adjustment[/b] of said shadow credit record and/or said shadow debit record, wherein said instruction being an irrevocable, time invariant obligation placed on said exchange institution.

    Don’t those accounting arithmetics look mathematical to you?

  93. Fei Shei,

    You didn’t answer my question, nor did pingaling. Honestly, I don’t care what you two do in your spare time, but since you obviously care for each other, answer the question: where’s the mathematical algorithm?

    You brought it up, Fei Shei. And pingaling liked it.

    Why? Where’s the mathematical algorithm?

  94. Max, I am cognizant of TRIPS provision all fields of technology should be accorded with patent protection. But that doesn’t preclude the US from protecting improvements in social science even if such improvements were not deemed as “technology”.

    If we were to argue about what useful arts are, that seems to deviate from your original incentive position that social arts don’t need incentive.

    I actually do not have a preference whether social arts should have patent protection from a policy perspective, but I am obviously frustrated with Court’s reasoning if that is indeed where it comes from. I am also cognizant of the Court repeatedly expressed along the line that not all business methods are per se unpatentable, but its analysis leaves a lot to be desired.

  95. Max says : Why do you think the teaching method you describe above, claimed in a way that satisfies 102, 103 and 112, and supported by data that shows it does indeed draw down the levels of bsX in the body, would be considered “abstract” by a judge that is parent to an autistic child?

    I said there is a reason to believe such an application might be denied, because I do not know in certainty based on my reading of the Bilski majority opinion. The rationale behind Court’s rejection of the hedging method as abstract idea, to me, is more of an analysis about novelty and non-obviousness. Based on the Bilski opinion, one not in favor of such teaching method could at least argue, like the Bilski hedging method, the teaching method comprises known basic education techniques like music and speech therapies.
    This is just a prediction of a likely direction where the Court might go, since it disaffirms the State Street test, which has to mean something, right?
    The PTO interim Bilski guide does state teaching concept as general concept barred from patentable subject matter.

  96. First,

    Fei baby, “First, let’s not get childish – Just. aint. gonna. happen.

    If ya be put off by Sunshine’s tone above, just wait until he starts talking about specific se_x acts with dead presidents. Oh you havnt seen anything yet.

  97. Fei,

    The issue at hand is how to define “useful arts.”

    Maxie is a bit old school at that (and of course suffers from the terminal Euro disease).

    Quite simply, the court in Bilski answered this question, and useful arts includes those areas that the founding fathers may not have considered. This is most readily visible in the clear acceptance of “business methods.” I be too lazy to actually look up the cite, but to be sure, the US law does accept this (so sad Maxie).

    Further, Maxie – ya still wanna separate patent law by particular endeavor (computer stuff) – sorry, but the courts have spoken on this time and again as to no such types of exclusions (I be too lazy to find the cite refuting the technological test, but it be plain as day).

    Lastly, your statement of “One way to do that is to deny people patent monopolies in those arts. There are a thousand other ways to promote such progress.” can be applied to any and all arts – including mech and bio. This points out that you have engaged in an obvious non sequitur of logic, in that the fact that other manners of promotion have absolutely nothing to do with patent eligibility. Zilch. Patents are not just for those things that cannot be promoted any other way. Not sure where ya got that notion from, but it aint related to patent law.

  98. Fei, I’m not anti-patent. Quite the contrary. Patents are my profession. I want them to thrive. But they won’t if the patent system is brought into public disrepute by over-reach and creep, into areas where patents do not belong.

    Patents belong where the US Constitution and, more recently, GATT-TRIPS puts them, that is, “useful arts”. The modern way to repeat the Constitutional meaning of “useful arts” is the TRIPS “all fields of technology”.

    Would you now like to have a go at the meaning of “useful arts” in the US Constitution?

  99. Max,
    In my mind, 101 is the place for principled policy reasons to exclude certain categories of arts from patentable subject matter, such as public morality concerns, and public domain concerns. Your point seems to be directing at patent system in general. If you don’t believe in patent system will promote progress in social arts, you ought not to believe in patent system will promote progress in any arts, period. Again, this is not the contention at issue, although I do disagree with your anti-patent view.

    The word invention as defined by webster is

    Definition of INVENTION

    1
    : discovery, finding
    2
    : productive imagination : inventiveness
    3
    a : something invented: as (1) : a product of the imagination; especially : a false conception (2) : a device, contrivance, or process originated after study and experiment
    b : a short keyboard composition featuring two- or three-part counterpoint

    Looks like the ordinary meaning of invention doesn’t exclude products in social science of imagination from the scope of invention. But I will admit the founders of the patent system probably never contemplated the patent system to reach endeavors in social arts. However, that doesn’t mean the Court has a free pass to decide the categories of patentable subject matter beyond brick-mortar concept of invention of the industrial age as it sees fit absent a good policy reason.

  100. Reminds me of the patent applications directed to playing music to plants to make them grow faster. In the patent specification the inventor set out lots of very persuasive comparative data. Why do you think the teaching method you describe above, claimed in a way that satisfies 102, 103 and 112, and supported by data that shows it does indeed draw down the levels of bsX in the body, would be considered “abstract” by a judge that is parent to an autistic child?

  101. I’m not worrying, Fei Shen, just curious.

    I’m in favour of progress in the social arts. Such progress should be promoted, I agree. One way to do that is to deny people patent monopolies in those arts. There are a thousand other ways to promote such progress. Government sponsorship of first class research, for example. Increased opportunities to publish and criticise learned papers in the field, for another.

    I don’t understand the word “invention” in the social arts. When a UK patent attorney filed at the USPTO an application with claims directed to an improved method of protecting jokes, the USPTO rejected the application. They probably thought it was a joke.

  102. You seem to be worrying about the merits of certain types of applications. Can we all agree “good inventions” in social arts would promote the progress in such arts. Again, would novelty, non-obviousness, enablement from the vantage point of PHOSITA take care of your concerns? Why erect categorical filters at 101 level to bar patentbility of those applications? The constitution never says so and the abstract idea exception seems to be more directing at general theorems of the nature.

  103. Nobody seriously questions whether patents promote the progress in chem/bio or mech eng. But many question whether software patents promote the progress of software engineering. Some software makes a good machine better. Other software makes good management of financial risk even better. The first type of software is clearly patentable, as belonging to “useful arts” ie technology. The other type not though. Rather, it belongs to accountancy and maths, not fields for patenting.

  104. Here is another food for thought.

    Let’s say there is a major discovery of the biological causal substance linked with autism. 3 groups of people rush to develop new methods exploiting the discovery.

    The first group is whole bunch of behavioral psychologists and they developed a set of therapies based on this discovery, aiming at reduce the biological substance linked with autisim. The methods may include, playing certain type of music repeatedly, communicating with autistic kids at certain speech rate, etc. After a number of successful trials, this group files a patent for their teaching methods.

    The 2nd group is Matel engineers, who designs a toy that does more or less the same things as the first group, i.e. playing music, speaking to kids at certain rate, albeit mechanically. Matel files a patent for this toy.

    The 3rd group is bio-medicine scientists who figures out some known chemical assays could reduce the biological substance linked with autism. They file a patent for their drug.

    Now, there is a reason to believe that the first group’s patent application might be denied because it is abstract, while the other two applications seem to be slam dunks. I fail to see any good policy reason for such a result. I hope the Court will clarify.

  105. I agree with this analysis. The question is why is this claim is “abstract.” Rader never really explained why the Bilski claims were “abstract.” Neither did the Supreme Court explain. So we are left with no real explanation as to why the claims were abstract.

    The PTO seemed to take the position in its brief to the Supreme Court that they were abstract because they failed the MOT test. The claims transformed nothing; neither were they directed to a specific machine. The Supreme Court should have endorsed this analysis even while stating that the MOT test was not the exclusive test. But they instead endorsed Rader’s “analysis,” which is not analysis at all – but the absence of analysis. By having no analysis whatsoever, but only the ultimate conclusion in lieu of of analysis, what Rader has really done is state that “abstractness” is in the eye of the beholder. We know it when we see it.

    The present case illustrates why Rader was so wrong, and why the Supreme Court so wrong to follow his “lead.” We are left in the land of the bizarre, adrift on an uncharted sea with no compass, no stars and fog all directions.

    While the district court should have done here is this: apply the MOT test. That test remains a good test, despite Rader’s apparent inability to comprehend it.

  106. MaxDeri says: But it is not a given, is it, that patents will foster such progress? Where’s your evidence?

    I think the same question can be said about the subject matters deemed to be patentable currently. This is a more appropriate question for the function of the patent system in general, not for the purpose to distinguish patentable fields application. Supposedly, other requirements of the patent law should take care of the progress concern.

  107. First, let’s not get childish. I don’t appreciate comment like “foot-licking buddy”, and I am sure the poster known as pingaling, whom I have never met in person or virtually, doesn’t appreciate such a comment, even if he did step on your tail.

    Now, to answer your question, this is the quote from Bilski opinion.

    “This is an unpatentable abstract idea, just like the algorithms at issue in Benson and Flook. Petitioners’ remaining claims, broad examples of how [b]hedging can be used in commodities and energy markets, attempt to patent the use of the abstract hedging idea, then instruct the [i] use of well known random analysis techniques to help establish some of the in puts into the equation. [/i] [/b] They add even less to the underlying abstract principle than the invention held patent ineligible in Flook.”

    Court’s characterization of the Bilski’s hedging method as ” the use of well known random analysis techniques to help estabish some of the in puts into the equation” seems to fit with the notion of application of an idea, the idea being random analysis.

    I don’t know if there is a thing called financial transaction engineering, but seems to me wall street has been tirelessly churning out complex transactions structures to hedge risks as of late. If we believe strongly that software techniques, such as methods to enhance data security, are patentable, then I don’t see why techniques to marshall financial transactions are not likewise patentable, for both, seems to me, use some sort of mathematical theories (sorry, for the loose term, but I hope you get what I am saying) to reduce risks.

    I think methods of social science or arts are abstract, but not in the sense they are basic theorems that exist in nature like E=MC2, but rather in the sense the embodiment of these methods do not involve machines. The Court’s disaffirmance of M-O-T test and the State Street test gives me a reason to believe Court’s view of patentable subject matter is based on field of applications. I am struggling to find any good policy reasons for this bias.

  108. MVS,

    Be prepared to wait a very long time – Sunshine’s meds prevent him from recognizing anything that gets in the way of his “reality”.

    Of course, ya might get the response of “I already showed you – ther eI showed you again.” Always a chuckle buster.

  109. please explain to me

    lol – Um, no.

    But Iza sure that one of the “software is maths” folk will explain what “computer configured to” means.

  110. Mooney what you are forgetting is that the claims MUST be considered as a whole. You are not allowed to dissect claims into patentable and non patentable subject matter. To do so would in effect eliminate an entire category of patents ( processes) that are guaranteed by the constitution and the statute, Deihr controls and Bilski ( 14) upholds and affirms. That’s the law so deal with it beach.

  111. “and the elements of the machine are not abstract: a data storage unit and a computer. We can touch them. Feel them. They exist in the real world. ”

    Doesn’t matter man. The way they’re claimed they’re specifically claimed so as to cover every implementation of the abstract idea itself. And that’s the problem. Not that the computer isn’t a tangible thing or whatever side rail your brain has gotten off onto.

    Note that, so far as I can see, nobody said anything in the 101 analysis about “old” things.

    The District Courts are finally moving away from that language and yet you tards don’t want to look and see that they are.

  112. In the wake of the Bilski patent litigation and the quite-vague opinion issued by the Supreme Court in that case, it’s helpful to obtain a little more clarification from the courts regarding the “abstract idea” exception to patent-eligibility. However, I anticipate that this issue will continue to be litigated, and (hopefully) further clarified, for years to come.

  113. Fei Shen Is this or Bilski’s hedging method really that abstract? It seems to me they are applications of mathematical algorithms to solve a particular problem.

    Can you (or perhaps pingaling, your foot-licking buddy) please explain to me where the “mathematical algorithm” can be found in the claim at issue here?

  114. Of course it’s not abstract. Its a business method and software invention, which is constitutional and statutory so there is no chance of stopping these inventions based on the law. So they have to come up with some bogus subjective abstract way to invalidate these inventions as being bogus subjective and abstract .

  115. Well, there is no doubt that this decision will be overturned by the CAFC and SCOTUS giving the usual suspects in the anti-patent crowd something to whine and complain about.

  116. Right 150 years or so ago the SCOTUS defined and ruled that machines are statutory subject matter.

    CASE CLOSED!

  117. Fei, I think we do all want “progress” in the social arts. Whoever could be against that? But it is not a given, is it, that patents will foster such progress? Where’s your evidence? Meanwhile, my gut feeling is that they would put a brake on such progress.

  118. Fei,

    The furniture of your arguments brings harmony. Contrast with the fluffy blender approach of Sunshine.

  119. Seems to me the claim is just a software implementation of a financial device. Would the Supreme Court have said the hedge method in Bilski was patentable if it had been implemented in software? I don’t think so.

    However, I just don’t buy the abstract idea justification. Is this or Bilski’s hedging method really that abstract? It seems to me they are applications of mathematical algorithms to solve a particular problem. I think what the Bilski court was really getting at is its prejudice against social science. I don’t think the abstract idea distinction puts a nice line dividing social science and “hard” science. Moreover, why don’t we want to induce brilliant “inventions” in social science, say a ground breaking teaching method in special education? Is there a good public policy reason?
    The breadth argument put forth by the S.Ct and the D.C. district court in this case is just not all that convincing, because the breadth concern is probably more appropriately taken care of by the 112 enablement requirement.

  120. Malcolm and 9 are right as usual.< ?i>”

    Lol.

    Lol lol lol.

    Lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol.

    Ah, no wait:

    Lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol lol.

  121. “If you listen to the arguments above, they are really 103 arguments”

    Nope, but you sure have a penchant for misunderstanding them as being such.

  122. ” Why anyone here would think that a “machine” would not be statutory subject matter is beyond me.”

    Because we have exceptions to patentable subject matter that were laid down nearly 100 years ago. If not before.

  123. ” One other point, since the claim seems to be directed to a data structure, why wasn’t a Lorwy format used?”

    Because you don’t understand what the Lowry decision was about. That’s why.

  124. Nope, you misunderstand what the court is saying.

    They’re abstract because common and everyday FINANCIAL transactions infringe. Not because those FINANCIAL transactions are “old”.

    This might come as somewhat of a surprise to you, but financial nonsense is waaaaay abstract.

  125. Yeah, and the ones we’re concerned about are the ones that include one of the exceptions to patentable subject matter within their bounds. Notice that the exceptions are there for a reason.

  126. Well, the settled way the EPO does it, with such a machine claim, is to concede on 101 (because the claimed subject matter indisputably has “technical character”) but then go on to reject under 103 because that subject matter cannot be seen as a technical solution to a technical problem. Does anybody know here whether there was a parallel filing at the EPO, and how it fared?

    I’m looking forward to reading the views of a CAFC panel, on a machine claim to a non-obvious solution to a non-technical problem (like how to make more money in the field of trading finance products). Will it award a 20 year monopoly to subject matter that does not contribute to “useful arts”? Or will it reject the machine claim under 101? Tricky call, I would think. En banc perhaps?

  127. Keep in mind that the “abstract” idea involves process/method claims. This claim is specifically a machine claim, and the elements of the machine are not abstract: a data storage unit and a computer. We can touch them. Feel them. They exist in the real world.

    Which is why if there is nothing there, we are talking obviousness, not non-statutory subject matter. That a judge who doesn’t do many patent cases can’t get the distinction between statutory subject matter and (novelty and obviousness) is no reason to believe that it doesn’t exist.

    There is plenty of case law, especially at the Federal Circuit level, but also at the Supreme Court level, that calls out this distinction. And, indeed, I seem to remember the obligatory caution here in the SCOTUS Bilski case.

  128. Well, we shall see. If there is some money there, it should go up on appeal to the Federal Circuit.

    I think that the claims are statutory, but possibly invalid under 102, or esp. 103. Keep in mind that what was rejected as not being statutory subject matter was a data processing system containing hardware. It is thus a “machine” under 101. Why anyone here would think that a “machine” would not be statutory subject matter is beyond me. (And, yes, I have seen examiners rejecting machine claims under 101 on occasion, but so far, citing the USPTO’s Guidelines has stopped that nonsense, and we haven’t had to appeal that yet to the Board).

    If you listen to the arguments above, they are really 103 arguments. If the algorithm, etc. is known in the prior art, but just now implemented on a computer, that sort of thing has been considered obvious for a long time now.

    Finally, keep in mind that the Federal Circuit Bilski decision, quoting I think Justice Breyer, cautioned against dissection of claims for the non-statutory elements, and instead required that the claims be viewed as a whole for 101 analysis. And, of course, that case was affirmed on other grounds by the Supreme Court.

  129. And once again we witness DOA saying nothing more than “WAAAH I don’t like the judge’s ruling (because I will make less money if there are fewer bogus patents) so I’m going to pretend that it’s wrong even though I have no evidence whatsoever, and in fact don’t know the meaning of any of the words I’m using.”

    Malcolm and 9 are right as usual. Those of you who get paid according to how many invalid patents you can sneak past the Patent Office and how many honest people you can threaten with your invalid patents are of course unhappy.

  130. A DC hack whose pre-bench experience was a mine and labor lawyer after BS in history. We deman our electricians , plumbers, surgeons, pilots ,etc be trained in their technology but permits unqualified Beltway hacks to decide patent cases?

    We’ve become the Roman Empire in it’s final stages!

  131. To promote progress in that which humanity, now as then, classifies as the useful arts. That is the only thing that legitimates the restraint in trade that is imposed by any patent system under the sun. I think some judges are surprisingly good at holding to that Constitutional imperative.

  132. Interesting case.

    I’d have to analyze the spec to see if there’s sufficient disclosure to show a transformation. My thought is that they’re not really doing anything except doing very simple manipulations on financial data and calling it a patent. Did they include screen shots in the Figs? If so, they should have added a claim covering ‘displaying …’ to satisfy the machine or transformation test (which is what the court will use as a guideline in the abstractness analysis). Also, it looks like they’re using a timeline to describe the process and vaguely discussing what the computer is doing.

    It makes me wonder if there was an actual computer program that this was based on. Probably not. It seems like the matching prices, etc. could have been described in greater detail. For example, are they using semaphore to lock the data in database when multiple people are accessing it? What about a circumstance when buyer makes the offer but seller has changed the price as before the signal from seller arrives? If there’s a program it should cover these contingencies in some way or other. If there was a program(s), you could patent certain areas like the above that are necessary to conduct the entire transaction. Then you have a strong patent with which you can go after your competitor.

  133. The corresponding method claims appear in US Patent 6,912,510, which is the parent of the patent discussed here. Unfortunately, that one is old enough that the prosecution history isn’t available in Public PAIR.

  134. I actually looked up the patent at the PTO website, unlike the majority of you :/

    Interestingly enough, the only claims in the patent are system claims. There aren’t any method or Beauregard claims. Also, there doesn’t seem to be any claims showing an actual physical transformation of data. E.g., displaying it on a terminal or whatever. The claims are only manipulating data in memory location. One other point, since the claim seems to be directed to a data structure, why wasn’t a Lorwy format used?

    I’d like to read the DC court’s entire opinion instead of just the blurb here. However, I think the 101 rejection may be appropriate in this case since the claims are not showing a transformation or tangible use of the data. Basically, the claims are only talking about changing data around in a database in a rather non-inventive fashion. Looks to me like the attorney did a poor job claiming the invention, but maybe there’s a good reason for it in the prosecution history.

  135. In an apparent effort to bolster its conclusion, the court
    also suggested that it is likely abstract because it would be
    infringed by “common and everyday financial transactions.”

    They apparently mean it’s abstract because it’s not novel, or that it’s obvious.

    So we have a new test for abstract things: a) If they are not novel or are obvious, or b) they are commonly and everyday infringed upon.

    What a beacon of clarity.

    The law is an ass.

  136. … and once again we witness MM’s conveniently “forgetting” that claims must be interpreted in light of the spec … which makes perfectly clear (er, um, to most, anyway) that these claims and “abstract” don’t even belong in the same room, or the same dictionary, together.

    And please, MM, stop saying “we” in so many of your posts.

    In 90%+ of your IP meanderings you are most certainly alone.

    There is no “we.”

  137. This is why I refuse to believe you’re an attorney. No attorney can actually believe that the ends justify the means in matters of legal analysis. If a claim should be held invalid as obvious, HOLD IT AS INVALID AS BEING OBVIOUS. Don’t do it under 101, when the claim should be statutory subject matter under 101.

  138. that “new” step is, by itself, unpatentable subject matter

    Something about “dissecting a claim” and “claim as a whole” comes to mind…

  139. I agree that there is a BS aspect to “preemption” as it is often understood and discussed. You need to go back to Breyer’s dissent in LabCorp and consider carefully what he is driving at. One can not evaluate 101 subject matter eligibility in a vacuum. Prior art does exist.

    The preamble of this claim pretty much says it all. It’s a system for “enabling” a task that is already enabled and has been, well, since forever. The abstract manipulations of the arbitrarily named information (“adjust”) (“report”) recited in the claim are not “inventive” in a technical sense, they are “inventive” only in grammatical sense as applied to the information.

    It’s a shell game: let’s call some information XX. Now let’s write a claim where you do some abstract stuff (“adjust”; “associate”; “instruct”) to XX or some arbitrarily named information “product” of XX. Before the PTO, you argue that nobody in the prior art is doing this stuff to XX! At least, the Examiner can’t figure it out …

    Now let’s go sue someone who’s doing abstract stuff to some information that we’ll conveniently call … XX! Even though it’s just some numerical information or a contractual obligation that has no material existence or objective meaning outside of the minds of the involved parties.

  140. Mike and TINLA (below) got this right.

    Given the stated “infringed by ‘common and everyday financial transactions'” ; where’s the 102/103 that says so? And please show your work.

    And please read the claims as their whole. You know, like the law calls for.

    If they take it there (and they should), this decision is DOA; Dead On Appeal.

  141. For the 1st question:

    If the new step makes the claim patentable over prior art, there is no rejection over 102/103. If the claim TAKEN AS A WHOLE is directed to non-statutory subject matter, it should be rejected under 101, immaterial is it is anticipated or obvious. Different criteria needing different analysis. If some of the limitations are statutory & some limitation can be called “non-statutory (e.g., the claim includes a signal somewhere in the claim, but the claim AS A WHOLE is not directed to a signal), the claim AS A WHOLE is statutory. Simple.
    If you are arguing that if a claim is “properly” rejected (or invalidated) on SOME grounds, then it does not matter under what grounds it is finally invalidated, on a technical grounds you are correct. Dead is dead. However, there is the matter of the rejection/invalidation being “proper”, particularly if we are talking about rejections. Missing this point means that you are a believer in “the ends justify the means”, which just leads to anarchy. You must get to the proper “end” by the proper course of action, or the final “end” can not be considered to be reasonable or valid overall.

    As for the 2nd question, since this is a matter of policy, I can only give you my personal opinion & not an official one.
    If I understand your question, then yes, I do personally believe that some subject matter should be invalid for patent protection under 101. Why? Because some things do not fit the reasonable or legal definition of what is entitled to protection as recited in 101. For example, works of art or literature are not patentable material. And I have not heard anyone of any note argue material like that should be patentable.

    Now, how about you answer your own questions in detail. Also, can YOU explain why there are different laws like 112, 101, 102, 103, etc. if any rejection/invalidation is good enough as long as it is rejected/invalidated?
    And, if you do not believe that the grounds of rejection (or invalidation, as the case may be) matters, why not? Particularly rejections which are during prosecution as opposed to court decisions on issued patents.

    MVS

  142. Just to make the analysis more plain to those out there who still don’t get it: the “invention” here resides only in the identity of the exchanged/”updated” information and the arbitrary restrictions placed on it. All of that is unpatentable subject matter. One should not be able to rely on it to escape 102/103 rejections, as there is absolutely no technical distinction to be made between the data recited in the claim and the old, old data that was exchanged/updated in the prior art, including the prior art before computers.

    The USPTO’s failure to recognize and enforce this basic and fundamental principle is why there is so much cxrxxp like this issuing all the time.

  143. Not really. The “preemption” doctrine is pure BS. Every claim “preempts” everything within its scope. Somehow they take 101, and parse it down word by word, but there’s a problem with that approach because “new” and “useful” are covered by 102/103 and 112 respectively. Therefore, those words were not meant to be parsed and analyzed in a vaccuum, resulting in our current precedents.

  144. Something being “old-in-the-art” has NO negative impact on something being STATUTORY. If it is “old-in-the-art” then prior art should be used. 101 is not at all relevant to that issue.

    Really a simple concept.

    Here’s a simple concept: if you add a “new” step to an old method and that “new” step is, by itself, unpatentable subject matter then it does not matter if the claim is invalidated under 101 or 102/103.

    If you think it does matter, please explain to me why. In your answer, please let me know if there is valid reason, in your view, why *any* subject matter should be excluded under 101.

  145. I think the primary party responsible for this fiasco is Chief Judge Rader. He is the one who stated that the Bilski claims were abstract without clearly explaining why they were abstract. The Supreme Court added nothing. We are stranded in the middle of the ocean, with no compass, no stars and fog in all directions.

    So what do we get? Instead of reason, we get bootstrapping. But such is the way of Judge Rader.

  146. This Court has made an obvious error in it’s application of “Rather the approach must be by-analogy to Flook, Benson, and Diehr.”

    Rather than properly applying this, the court has run away with the thought of Benson without the proper cabinning of that opinion with Diehr.

    The court has missed the pivotal aspect of the Bilski decision, which is:

    !!! BILSKI 14 !!!

  147. What, not even one patent attorney will explain why it would be in Alice’s best interests to appeal this decision?

  148. In fairness, you can write a system claim that is essentially a method claim. Meaningless words are meaningless.

  149. “How can we tell whether testing for an abstract concept is a good test for 101 or not? By the variance in the way the test is applied in the district courts. Be interesting to see a chart that trys to characterize the different ways the judges apply this test.”

    You can start by reading all the literature I’ve generated on the subject. Then you can cap it off by reading the PTO’s guidelines. They’re surprisingly accurate at least in the process of analysis they present.

  150. “You can’t tell what is a good invention and what is not a good invention. ”

    Lulz, I can.

    “Equal protection under the law”

    Applies to people, not claims.

  151. No it doesn’t silly broje.

    Although on first glance yes this might be overturned on appeal. But, looking a second time you notice there isn’t much there but a data storage unit configured to hold some abstract things, and a computer there to apply some abstract concepts to those abstractions.

    All in all, yes I think I can enunciate an abstract idea at play here which is fully preempt. I imagine if I read the decision they might hand it to me on a silver plater.

  152. >>that actually enhance the quality of life of >>people other than wealthy patentees

    Simple principle. Make the laws and examine the applications. You can’t tell what is a good invention and what is not a good invention. The point is to have a set of procedures to follow. Equal protection under the law–not I am Mal and decide that this one is no good so kill it no matter how it is done and make some stuff up.

  153. Mooney,

    Not commenting on the decision here, but do you STILL not understand the difference between 101 and 102/103??

    You rambled on that “e.g., Prometheus, where utterly trivial and old-in-the-art steps such as “transforming” human blood into data relating to the contents of the blood are considered sufficient to satisfy 101″

    There are DIFFERENT standards for different statutes. Something being “old-in-the-art” has NO negative impact on something being STATUTORY. If it is “old-in-the-art” then prior art should be used. 101 is not at all relevant to that issue.

    Really a simple concept.

    MVS

  154. Just explain to me why it matters pingaling and NWPA. Other than the exceptions I listed above, who cares? Is there some obvious negative effect of following the district court’s approach to this claims? I’m not seeing to it. I do see a significant upside, however: inventions that actually enhance the quality of life of people other than wealthy patentees are likely to be examined more rigorously and more quickly if the reams of worthless cxrxapx are removed from the equation.

  155. Claim 1. A data processing system to “enable” two parties to do something they don’t need a computer to do, the system comprising:

    a data storage unit having stored therein various bits of information related to one or both of the parties; and

    a computer, coupled to said data storage unit, that is configured to

    (a) receive “a transaction”;

    (b) “electronically adjust” some of the information in response to the “transaction”; and

    (c) “generate” an “instruction”.

    That’s it. All the rest of the claim text is irrelevant bulloney related to arbitrary names for the information and irrelevant bulloney about the content of the instructions that can not be used to distinguish the claimed “method” or “system” from the myriads of identical methods and system existing in the prior art since, well, forever.

  156. So, if you were Alice’s counsel, would you advise them to appeal this decision? Do you think this claim will survive a serious 101/102/103 analysis?

  157. Mal said: “I just don’t think it matters”

    No double duh. Glad to see you finally admit. Now admit that you are a worker at the PTO.

  158. BG confirming a thought advanced by Sunshine and using a windmills analogy…

    Hey Cy, you and me ought to get together and discuss some sockpuppet mystery conspiracy theories.

  159. I just don’t think it matters

    No duh. Speaks volumes of chuckles there Sunshine. Mighty fluffy of ya.

  160. Oh, I know the difference between those statutes, ping. I just don’t think it matters what statute is used to invalidate claims of this type. Is there some fear that an “important” (trying not to laugh here) computer-implemented financial transaction is going to “unfairly” denied because a claim like Bilski’s or this claim is chucked into the trash under 101? If so, I’d like to know why a reality without such patent claims is undesirable.

    I mean, I know why many trolls and/or banks who seek to abuse the patent system to line their pockets might be adversely affected. And their lawyers would have to find something useful to do instead. But other than this tiny tiny minority of greedy ealthy people, who could possibly give a rats axx and why?

  161. Because Alice’s patent attorneys will convince them that this is a horrible decision and they should spend a couple hundred grand in legal fees to appeal? Convincing clients to joust at windmills seems to be a big revenue generator for patent attorneys, whether it’s responding to hopeless Office Actions over and over again, or appealing court decisions where you have claims of this quality (these claims clearly won’t survive 102/103 even if the 101 gets overturned).

  162. Commin from the guy who does not kow (or care) the difference between 101 and 102, 103 and/or 112…

    Buckets of chuckles.

    Mayhaps I just dont care to do the same type of hand-wavy because-I-say-so schlock that you do Sunshine.

  163. Yes, pingaling, and we know why you don’t give answers to specific claims: you really don’t have a good grasp of how courts interpret patent laws and, more importantly, you are deeply confused about the irreversible trend in the way that those laws (and the interpretation of those laws) is changing in the United States.

    Either that or you just enjoy taking the kind of shower that is aided by the wind.

  164. I see ole Mal still doesn’t understand information.

    LOL. If that’s true, then I’m in good company — the kind of company that allows me to advise my clients well so that they don’t waste their money.

  165. Here’s a question: why would anyone bother appealing this? If Bilski isn’t patentable under 101, there’s no way that this gxrxbxgx is patentable under 101.

  166. Boy, what nonsense. What has the SCOTUS wrought but nonsense.

    How can we tell whether testing for an abstract concept is a good test for 101 or not? By the variance in the way the test is applied in the district courts. Be interesting to see a chart that trys to characterize the different ways the judges apply this test.

    The office actions I see make it clear as well that examiners just can’t get their heads around this. They seem to have folded and just let everything by without maybe a first action complaint.

    Nothing wrong with these claims as far as 101 is concerned. I see ole Mal still doesn’t understand information.

  167. Love this decision.

    ‘Natch.

    Coming to a backyard near you soon (a la TINLA).

    Keep the chuckles goin (while ya can).

    btw Sunshine – I don’t give answers to specific claims – no matter how muych ya keep sayin I keep those things “fluffy”.

  168. CLS filed this declaratory judgment action against Alice after Alice had warned CLS (by letter) that “every transaction involving CLS’ settlement of foreign exchange transactions is impacted by [our patent] claims” and that CLS was “willfully infringing Alice’s intellectual property.”

    BWAHAHHAHAHAHAHAHAHAHAHAHHAHAHAH!!!!!!

    Love this decision.

    Of course, it’s nearly impossible to square this decision with the CAFC’s position in other post-Bilski cases, e.g., Prometheus, where utterly trivial and old-in-the-art steps such as “transforming” human blood into data relating to the contents of the blood are considered sufficient to satisfy 101. But then again, Prometheus is one of the most desperate, short-sighted and poorly reasoned decisions in the Federal Circuit’s history, is it not?

    But more importantly, this claim is pure cxrxaxp so good riddance. It’ll be fun to watch Les and pingaling try to flxff it up.

    News flash for folks trying to patent this sort of cxrxaxp, and by “this sort” I mean any “method” or “system” that is nothing more than using a computer to “enable” or “facilitate” the transfer of information between parties, where the only distinction between the claimed method or system and the prior art is the type of information being transferred: your claims are pure shxx.

    wherein said instruction being an irrevocable, time invariant obligation placed on said exchange institution

    What possible patentable difference could this make? Nobody’s patented a system for telling someone with a computer that their grandmother died, wherein the instructions are sent in pink bold 13 point Bookman font. Why should that make a difference?

    Time to terminate this bxloney with extreme prejudice.

  169. I think even 6 and mal might have to admit that, at least at first glance, this one looks likely to be overturned on appeal.

    If you can apply preemption to say that the claim to the application of the abstract idea preempts the idea of applying the abstract idea in the specified fashion, every claim becomes invalid.

  170. The quote: “Because it would be infringed by ‘common and everyday financial transactions’.” sounds to me like the court should be considering invalidity for lack of novelty or obviousness, and not applying some abstract idea basis. Section 101 should not be used for that type of heavy lifting.

    The claim is clearly statutory subject matter under 101. End of discussion for 101. Move on to 102/103, and analyze the claim at that stage.

  171. This seems to have nothing to do with Bilski and everything to do with “software patents are invalid.”

    If you’re going to make the ruling, at least just come right out and say it.

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