“Inventive Concept” and the Hot-Blast Cases

Guest post by Jeffrey A. Lefstin, Professor of Law, University of California, Hastings College of Law

As the Supreme Court prepares to take up Alice Corp. v. CLS Bank, a major question the Court may confront is to what extent an “inventive concept” is necessary for patent eligibility under § 101. In Mayo v. Prometheus, the Court suggested that “conventional and obvious” activity cannot transform a law of nature or abstract idea into a patent-eligible invention. The Court seemingly revived Parker v. Flook, which held that only “inventive applications” of abstract ideas are patent-eligible. But when the Federal Circuit heard CLS Bank, divided as the court was, both Judge Rader and Judge Lourie emphatically rejected the idea that Mayo demands “inventiveness” for patent-eligibility.

In both Flook and Mayo, the Supreme Court anchored the requirement for inventive application in Neilson v. Harford, the famous English case on James Neilson’s hot-blast smelting process. The Court in Flook and Mayo focused on this passage appearing in Baron Parke’s opinion for the Court of Exchequer:

We think the case must be considered as if the principle being well known, the plaintiff had first invented a mode of applying it by a mechanical apparatus to furnaces; and his invention then consists in this—by interposing a receptacle for heated air between the blowing apparatus and the furnace.

Flook took this language to mean that an underlying idea or discovery should be treated as part of the prior art; Mayo took it to mean that a claim is patent-eligible only if the application of a discovery or idea is inventive or unconventional.

However, a reading of the Exchequer’s full opinion tells the opposite story. Neilson’s patent was sustained because his application was entirely conventional and obvious. The defendant’s challenge in Neilson was primarily a scope of enablement argument: Neilson had disclosed that the blast should be heated before introducing it into the furnace, but disclosed next to nothing about the heating means. In refuting the defendant’s challenge, both the patentee and the judges of the Exchequer emphasized that the mode and apparatus for heating air were old and well known in the field, and represented no invention by Neilson.

So why did Baron Parke write that Neilson’s discovery – his ‘principle’ – should be regarded as “well known”? The court was wrestling with the question of whether Neilson had claimed a patentable manufacture, or the abstract principle that hot air was superior to cold. And if a manufacture, was Neilson entitled to reach the accused blast furnace, which employed a different heating apparatus? The Exchequer had faced the same questions seven years earlier in Minter v. Wells, involving a patent to an adjustable chair. The defendant in Minter had argued that the patentee was trying to claim a well-known principle of mechanics: the self-adjusting lever. Alternatively, if the claim was to the chair rather than the principle, the patent should be restricted to the inventor’s particular embodiment. Baron Parke concluded instead that the patentee had claimed the application of the self-adjusting leverage to an adjustable chair. Therefore, the patent was not drawn to an abstract principle, and might extend to other chairs embodying the same application but with a different arrangement.

Minter thereby established that a patent might claim the application of a well-known principle to new ends, and might extend beyond the exact machinery employed by the patentee. In the famous passage from Neilson, Parke was applying the same doctrine to Neilson’s patent – except that Neilson’s ‘principle’ was new rather than well-known. Neilson was a more difficult case because, given Neilson’s minimal disclosure, the scope of enablement was more dubious than in Minter. But a special jury verdict on that point ultimately carried the day for Neilson.

Neilson was only one of some twenty cases asserted by Neilson in England and Scotland. Other decisions following and interpreting Neilson leave no doubt that the case stood not for inventive application, but for the distinction between principles in the abstract and patentable applications. For example, in a case litigated the next year, Househill v. Neilson, the Court of Sessions stated:

The main merit, the most important part of the invention, may consist in the conception of the original idea—in the discovery of the principle in science, or of the law of nature, stated in the patent, and little or no pains may have been taken in working out the best manner and mode of the application of the principle to the purpose set forth in the patent.

Neilson was understood the same way in the Supreme Court’s landmark 19th-century opinions that discussed Neilson extensively, such as Le Roy, Morse, and Tilghman. Further, in late 19th-century and early 20th-century American cases and treatises, it was black-letter law that while abstract principles and discoveries could not be patented, a practical application was patent-eligible without the need for inventive application – subject to certain exclusions such as the ‘mental steps’ rule.

As I wrote about last year, the actual origin of the inventive application test was Justice Douglas’s opinion in Funk Brothers, in 1948. The dubious history of the inventive application test in the wake of Funk suggests we would have been better served by following Justice Frankfurter instead of Justice Douglas. For it was Frankfurter’s concurrence that embraced the spirit of Neilson and the historical tradition: the claims to bacterial compositions in Funk were unpatentable not because they added or changed little relative to a law of nature or natural phenomenon, but because the patentee was claiming the idea of compatible strains instead of his practical application.

I write about the hot-blast cases, and the history of the inventive application test, in an article available here.

31 thoughts on ““Inventive Concept” and the Hot-Blast Cases

  1. Dear mr. Anon,
    We are discussing here a question that has not been solved by the US Courts yet, so there is no point to say that you or me are right or wrong in relation to the current state of the law. But let me be clear: there is no point in making personal comments, if only because they are off-topic and boring to other readers. Oh yes, I may add “perhaps” to all my statements to demonstrate my modesty, but wouldn’t that be boring as well?

    If you beleive that there is a defintion of the concept of “business method” in patent law, give it to me. I think it does not exist, but I may be mistaken. But even if there is a crisp and clear definition, Bilski v. Kappos made clear that some of them are not patentable – so one may infer that some are patentable.

    Traditionally, a legal reason to reject an application under 101 was that was an “abstract idea”, “natural phenomenon” or “law of nature”. CLS v. Alice is confusing since it claims to be concrete (in contrast to Bilski), because it mentions a (concrete) computer implementation. Still – at least for the CAFC – that was no obvious reason to recognize the patentability of Alice’s business method.

    “Concreteness” is anyway a very confusing criterion. Similar to the European technology requirement, it could be qualified as a “restatement of the problem in more imprecise terminology” (quote from a British judge). Both criteria lead to the paradox between the principle that all applications must be assessed as a whole, whereas courts noted that it would be inappropriate to include “insignificant post-solution activity”. This concept in Flook is actually strikingly similar to the considerations by the German Federal Supreme Court in Dispositionsprogramm exactly two years earlier (also on the 22th June!)

    Re Stevens: I am only referring to his analysis that the famous words “anything under the sun made by man” read in context actually show that Congress said that NOT “anything under the sun made by man” is patentable. While you may disagree with his opinion as a whole, this is a pretty straightforward conclusion.

    I think it is helpful to distinguish between absolute and relative criteria for patentability. Non-obviousness is in the latter category since it relates to the state of the art. Once a patent is granted and published, it is no longer novel or non-obvious. IMHO 101 represents an absolute test, for concreteness or whatever.

    In many writings I have read, including court decisions, § 112 is mentioned in this context. While obviously § 112 cannot replace § 101, it clearly requires a description sufficently to allow the PHOSITA to carry out the invention. And then IMHO it is logical to infer that the kind of “abstract” ideas that the PHOSITA would not be able to carry out anyway (“without undue experimentation – see Neilson v. Harford!) cannot be patented, if only because they cannot be described in the required way. This is a kind of “systematic interpretatin”, if you like. Of course, § 112 retains its own role: applicants may also fail to provide an adequate description for other reasons, iof only for neglicence.

    The typical pro-patent argument is that R&D investments would not be possible without protection. The difficulty is that this argument seems irreconcilable with the fact that historically in all jurisductsions that I am aware of, certain useful(!) subject-matter was excluded. Apart from the abstract ideas/laws of nature/natural phenomena, on both sides of the Atlantic there is still a debate whether mental steps and printed matter should be excluded. I am aware that neither of these exclusions play a strong role (anymore) in US law, but in any case they are more concrete than “abstract ideas”. Another eternal debate is the distinction between discoveries and inventions – even though § 100(a) equates discoveries to inventions. Does not matter if an inventor finds something that was pre-existing, but just no known to mankind?

    The central problem is that all these exceptions have little more justification than “tradition”. But tradition is a weak argument in law. It does not give an argument to counter the above “investment” argument. Incidentally, patents are even granted in cases that there has been no substantial investment at all: “patentability shall not be negated by the manner in which the invention was made.” (§103).

    I know that it is a risky conclusion, but in my perception the conclusion is inevitable that patents are NOT a reward for investment, but a tool to obtain exclusivity. In any case, patents stem from historical “privileges” that indeed were granted for exclusivity.

    And that brings us back to business methods. Is it logical to grant patents to businesses because without exclusivity they could be damaged by competitors?
    No, it is the eseence of free market economics that competing firms may case damage to each other. Yes, competition seems a waste, but some experiments (North Korea) have shown that it is bad to eliminate competition!

    While the perception of “protection” and “reward” is hard to reconcile with exceptions, the perception of “exclusivity” is an argument to consider the grant of a patent an exception!

    In practice, actually many patents are used to achieve exclusivity rather than to disclose and licence technology. Here there are big differences between industries. Chemists tell me that chemical patents are interesting to read, and obtaining licences can be useful. In contrast, economic research has found that very few programmers read software patents, and if they do, it is mostly to know what competitors are doing. Here exclusivity seems the object (see also Lemley’s observations on “functional claiming”).

    One step further are the “arms races” between mobile telephone makers and the like. They obtain as many patents as they can, to be prepated for “mutually assured destruction” security, often by purchasing entire patent portfolios so large that the are actually unable to assess the value of the patents in them upfront.

    If anyone disagrees, please tell me why, and don’t tell me that I am insane – if only because that was told me before!

    1. Reinier Bakels, very good points on business methods. I have made the argument here before that given our history where our revolution was sparked by a trade monopoly, specifically the patent granted to the British East Indies Company, it would be odd to think that the founding fathers would believe that trade monopolies were within the useful Arts even if it were possible to invent new trade methods. Thus even if Congress were to specifically authorized patents on innovations in trade, I think there is a next really good argument that such a statue would be unconstitutional.

      1. You may remeber the “Statute of Monopolies”. As early as 1623 the English government noted that there should not be noo many “monopolies”.

        While in Europe the legislator enjoys almost(*) complete freedom to make patent laws, in the US you have the restriction (benefit?) of a constitution. Do you have a specific provision in mind that requires the American economy to be a free market economy? or that is contrary to business method patents?

        I recall that Stevens in Bilski explained that the “moderne times requires modern patents” argument for business method patents is nonsense, since business is *older* than technology!

        (*) Patents typically do enjoy constitutional protection once they are granted. While some have argued that intellectual property per se ought to be considered a fundamental right, there is clearly SOME boundary. A “property rule” for a mere idea is inappropriate. BUT the legislator (probably) can not invalidate existing patents without compensating their owners.

        And that brings us back to CLS v. Alice. What if the SCOTUS says: “the answer is NO, software is not patentable”? But the Court will understand that this question is irrelevant (in the context of the present case).

        I guess that the SCOTUS will at least limit business method paentability. And patent owners will be outrageous. Well, they were outrageous even after the unanimous Mayo decision.

        Well, it is similar to the trolls, pardon, “patent assertion entities”, who are complaining loudly that their “honest” business is hurt by anti-troll legislation!

    2. Reiner,

      I reject your notion that what we are discussing her is something not been solved by the US Courts.

      Sorry – but that is a thin veil over the same “I choose to define X” that I chastised you about.

      So there is EVERY point in saying that you are wrong and that I am right.

      As to personal comments- I am talking with you and I do not care if the ‘reader” does not care.’ The reader can move on or not at their prerogative and such does not affect our conversation. Further as I mentioned these are not in fact off topic because they touch upon and color your stance of the topic.

      That’s two strikes in two pitches.

      The definition of business method is simple: a method of conducting business.

      That is it.

      You again are confused as to what Bilski held. Bilski held that the method of that claim was abstract and that was why it failed. It did not hold that it failed because it was a business method.

      That’s strike three – you are done.

  2. Being patentable subject matter under 101 (and associated case law) is independent from being inventive (under 103).

    Patentable subject-matter is a trick that any PHOSITA can carry out. Otherwise the applicant would be unable to satisfy 112 (which does not mean that 112 replaces 101!)

    Being patentable subject-matter is an absolute test, in contrast to being inventive (non-obvious) which depend on the state of the art.

    The theory of relativity was by no means non-obvious, but it is not patentable subject-matter since it can not be “carried out” by the PHOSITA. Note the subtle difference between the (statutory) words “carried out” and “applied”.

    A detailed blueprint may be sufficient for the PHOSITA. But a subsequent question is whether it is non-obvious.

    Genuine business methods can not be carried out by a PHOSITA, but require the creativity of a businessman. As such, they resemble pure science, that can not be carried out by a PHOSITA either unless a person intervens whom we call an “inventor”.

    While scientists may be inventors as well, conceptually it is helpful to distinguish the pure scientific researcher, and the person who develops patentable subject-matter ready to be carried out by the PHOSITA, who is more a craftsman than a scientist.

      1. Firstly , “business method” is a poorly defined concept. In State Street the CAFC refers to difficulties at the USPTO identifying business methods. Yes, I know that this decision is superseded, but the observation on the USPTO experience is still a fact.

        Secondly, I wrote genuine business method. For lack of another definition, such business methods can be defined as methods not any PHOSITA can carry out.

        Thirdly, of cours I am aware that many business method patents have been granted. But they are still controversial. Which IMHO has to do with the fact many business methods can not be carred out by any PHOSITA (the word “any” is in the statute).

        1. Your excuse of “Firstly , “business method” is a poorly defined concept. ” is not enough to render your post at 5 correct and my post at 5.1 remains correct.

          I reject your definition of “genuine as simply not in accord with US patent law. It is a nonsense definition. Anyone can make up personal definitions to mean exactly what they want them to mean and have no meaning to anyone else.

          All that you are attempting to do Reinier is play loose (far too loose) with semantics. I am familiar with your anti-patent leanings and your view is simply not an acceptable view to start a conversation with.

          1. Frankly, I don’t like your style of discussion, mr. “anon”. Still I refrain from using strong words like “not acceptable”. Also, I do not talk in terms of “excuses”, but in arguments. And it is totally inappropriate to blame me for “anti-patent learnings”. Even if I really wrote such “learnings”, in the present context it is totally irrelevant.

            Back on topicIn all three paragraphs of your post, you simply say that I am wrong. Without arguments. That is no discussion. And this is a discussion forum, mirabile dictu.

            Let me simplify my argument, if that is perhaps helpful. Unders US law, some business methods are patentable. You may call them “abstract”, I called them “genuine”. What’s in a name?

            In CLS v. Alice, another attemtpt will be made to clarify the border line between patentable (“concrete”) and non-patentable (“abstract”) business methods. With six different opnions from the CAFC, I don’t think it is appropriate that there is anything like clear law that I ignore.

            Anyway, the present discussion is on the question whether “101″ represents a criterion simiilar to, or different from non-obvious. US law excludes “abstract ideas, natural phenomena and laws of nature”. So there is SOME boundary. Given that there is no clarity, I tried to give my own contribution – and it CAN not be conflicting with US law due to this lack of clarity (sigh!).

            And if you still believe that “anything under the sun made by man” is patent-eligible, please re-read Stevels’ (concurring) opinion in “Bilski v. Kappos”.

            1. Frankly Reinier, I do not care if you like my ‘style’ or not.

              I am correct.
              You are wrong.

              Deal with it.

              And no, your leanings are NOT irrelevant to the present context, as they color your perception of business methods and your attempts to create a false definition that does not exist in US patent law.

              Your choice of Stevens Concurrence-which-is-actually-a-dissent on the point of business methods is telling. Stevens would have rewritten the actual words of Congress on that point and that is the reason why Stevens lost his majority position. In fact, the majority position of that decision is all the argument I need to point out that you are – in fact – wrong.

              Your simplified argument is also wrong. You make the mistake of moving from a category position on a category to a different judicial exception that applies to ALL categories, and thus is not related to the point you are trying to make.

              I do recognize that you are attempting your own private view of the law, but you are grossly mistaken to think that that private view – being as it is an opinion – cannot be wrong. It is wrong. What’s in a name? you ask. I have already answered that question. Sorry that you do not like my accurate answer to that question. If you continue to feel sad, I suggest you buy yourself a puppy and come to grips with the fact that you are wrong.

  3. Bravo! Professor Lefstin. Bravo!

    A practical application – this is what distinguishes Diehr from Benson and Flook and nothing else.

      1. Anon, Thanks for the link there. I wonder how the courts will react when a patented honeybee is found on farmer Bowman’s land and he doesn’t have a license?

  4. I hesitate to believe the good professor’s take on the blast cases. Last time I read them they seemed very simple and easy to understand. All the convoluted explaining the professor is going through didn’t seem to be necessary at all.

    1. 6, however the good professor understands those cases the same way that I understand them. It also explains the differences between Benson, Flook and Diehr.

      1. the good professor understands those cases the same way

        And are you both forgetting what Congress did in 1952 as to the term ‘invention?”

        See post 1.

  5. What is so bizarre about these professors is that they keep churning over and over this 101 nonsense. You aren’t really trying to resurrect the flash of genius standard are you? Sure sounds like it.

    1. I’d like to see an article: 101 — a total waste of time. Let everything through if you invalidate the claims under 102, 103, 112, then serves you right.

      Subtitled: Another claim goes to the SCOTUS where it is said that the claim is to something 100′s of years old and yet no prior art can be found.

      1. The other thing is that can’t one of you professors spend the time to actually look at the so called functional claim problem and debunk it. Try to do some real work. Take a claim and look at the set of inventions that it would cover. Ask yourself if the claims aren’t actually the best way to cover the set of inventions. And ask yourself the implications of forcing the use of different types of claims.

        One gets the impression that you guys know absolutely nothing about real inventions or practical patent law.

        1. “Ask yourself if the claims aren’t actually the best way to cover the set of inventions.”

          Why on earth would we want a single claim to cover a “set” of inventions? Claims are supposed to be to an (aka “the”) invention, not a whole “set” of them at one time.

          “And ask yourself the implications of forcing the use of different types of claims.”

          More claims? More designing around? More innovation?

      2. NWPA muses “I’d like to see an article: 101

        I would like to see an article: “The lack of meritocracy and the nearly incestuous academic environment: how ideology is perpetrated by the ‘landed class’ of old school academics and groupthink thrives in a publish or perish environment”

  6. a major question the Court may confront is to what extent an “inventive concept” is necessary for patent eligibility under § 101

    Someone (anyone) tell me again of the history of the 1952 Act and the very reason why § 103 was written.

    Then tell me how would it be possible for the Court to (constitutionally) re-write the law that Congress wrote and which removed the common law ability that the courts had prior to 1952 for determining ‘invention,’ ‘inventive gist,’ or any other of the numerous terms representing the same thing?

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