Bilski: Adding Obvious but Meaningful Limitations

Anticipation, Claim Drafting Tips, Patent, Patentable Subject Matter, ,

Paul Gardner is PRG’s Academic Director. In an e-mail, I asked him whether claim drafting techniques and strategies can be effectively tailored to satisfy Bilski’s requirements without sacrificing valuable claim scope. Mr. Gardner says yes it can be done most of the time (and PRG is developing the CLE to tell you how). For Gardner, an important consideration in Bilski is between “meaningful limits” versus “nonobvious limits.”

While Bilski requires that process claims recite machine or transformation limitations that “impose meaningful limits on the claim’s scope,” such limitations need not themselves be new or nonobvious. In other words, “meaningful limits” is not to be equated with “nonobvious limits,” and the “meaningful limits” requirement may be satisfied – insofar as Section 101 patent-eligibility is concerned – by machine or transformation limitations which, standing alone, are old or obvious. Once Section 101 patent-eligibility is found to be present, novelty and nonobviousness of the claim as a whole may be satisfied by a novel and nonobvious algorithm in combination with the structural machine or transformation recitations.

This difference is seen in the Federal Circuit’s discussion of Abele.

As Chief Judge Michel points out in Bilski, in Abele the CCPA found a broad method claim reciting only data manipulation steps (calculating the difference between two values and displaying the value of the difference) to be patent-ineligible, but found a dependent claim adding only that the data is “X-ray attenuation data produced in a two dimensional field by a computed tomography scanner” to be patent-eligible, because the data represented physical and tangible objects.

My own caution comes from the CAFC’s nonobviousness analysis in the 2007 Comiskey decision. In describing that case, I led with the headline “35 USC 101 Finds its Teeth (Biting into Nonobviousness)” because Comiskey could be read to indicate that any portion of an invention that constitutes nonstatutory subject matter will be considered de facto obvious. Under this reading of Comiskey, obvious but meaningful limitations may overcome §101, but leave the claim extremely vulnerable under §103(a). The Supreme Court’s 1978 Parker v. Flook decision follows this same line of thinking – treating a non-statutory (but previously unknown) algorithm “as though it were a familiar part of the prior art.”

   

     

     

   

Professor Collins: In re Bilski: Tangibility Gone “Meta”

Academic Studies, Articles and Publications, Patent, Patent Cases 2008, Patentable Subject Matter, , ,

By Professor Kevin Emerson Collins (Indiana University Law School – Bloomington) [PDF Version]

In its recently issued en banc majority opinion in In re Bilski, the Federal Circuit articulates a “machine-or-transformation” test for patent-eligible subject matter under § 101 of the Patent Act. Although they are both legitimate questions, this short comment addresses neither whether there is a legitimate statutory basis for this test nor whether Supreme Court precedent should be interpreted so as to mandate (or even support) this test. Rather, it focuses solely on the criteria that the court offers to draw the line between patentable and unpatentable transformations. The Federal Circuit has added a new twist to the tangibility test that has for many years played a role in determining patent-eligibility: the tangibility test has gone “meta.” The tangibility of the formal data that is actually transformed by a method of processing information is not relevant to patent-eligibility, but the tangibility of the things that the data is about—the tangibility of the informational content of the data or the things to which the data refers—now appears to be dispositive.

Bilski sets out a disjunctive two-prong “machine-or-transformation” test for patent-eligible subject matter: “A claimed process is surely patent-eligible subject matter under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” Slip op. at 10. The opinion declines to elaborate on the implications of the particular-machine prong of the test because the applicants conceded that their claim did not satisfy this prong. Id. at 24. It addresses only the transformation prong. It puts forward a conjunctive, two-prong test that must be satisfied for a method to “transform[] a particular article into a different state or thing” and thus to qualify as patent-eligible subject matter. First, the transformation implicated “must be central to the purpose of the claimed process.” Id. In other words, it must also “impose meaningful limits on the claim’s scope” and not “be insignificant extra-solution activity.” Id. Second, the transformation only qualifies as patent-eligible if it transforms a certain type of “article.” “[T]he main aspect of the transformation test that requires clarification here is what sorts of things constitute ‘articles’ such that their transformation is sufficient to impart patent-eligibility under § 101.” Id. at 24–25. This is the distinction—the distinction between the “articles” that, if transformed, constitute patent-eligible subject matter and the other “articles” that, if transformed, do not constitute patent-eligible subject matter—on which the opinion elaborates at length, id. at 25–32, and on which this comment focuses.

Most importantly for the point addressed here, the Federal Circuit implies in Bilski that there are two different categories of “electronically-manipulated data,” id. at 25, and that the data in each category is a different type of “article” insofar as patent-eligibility is concerned. The data in the first category is an “article” that, if transformed by a method claim, constitutes patent-eligible subject matter, but a method that transforms the data in the second category is not a patent-eligible method.

The first category is comprised of data that represents a “physical object or substance.” Id. at 28. For example, citing In re Abele, 684 F.2d 902 (C.C.P.A. 1982), the Federal Circuit stated that a method that transforms data that “clearly represent[s] the physical and tangible objects, namely the structure of bones, organs, and other body tissues” is a patent-eligible method. Slip. op. at 26.

The second category of data seems to have two distinct subsets. The first subset is data that, as claimed, does not represent anything (or, alternatively, that can represent anything). This data is semantically empty; it is a variable without any specified informational content. Bilski again uses Abele—but this time the claims that the court rejected under § 101—as an example. Id. The fact that methods reciting the transformation of this meaningless (or infinitely meaningful) data are not patent-eligible should come as no surprise to those familiar with the history of patent-eligibility in the last several decades: methods that recite the manipulation of variables without semantic meaning are nothing more than methods that recite mathematical algorithms in the abstract.

The second subset of the second category, however, is likely to raise some eyebrows: it contains data that represents something specific or something in particular, but that something represented is itself intangible. Here, the informational content of the data—the thing in the world to which the data refers—is intangible. The Federal Circuit holds that the method at issue in Bilski is not patent-eligible because it “transform[s]” or “manipulat[es]” data representing “public or private legal obligations or relationships, business risks, or other such abstractions,” which critically is not data “representative of physical objects or substances.” Id. at 28.

The idea that the meaning that the user attributes to the data transformed or manipulated by an information processing method is relevant to patent-eligibility is not a novel feature of the “machine-or-transformation” test announced in Bilski. For example, the “concrete, useful and tangible result” test of State Street Bank required the courts to examine the meaning of the data, variables or “numbers” in the course of determining patent-eligibility. State St. Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368, 1373–75 (Fed. Cir. 1998). However, what is new in Bilski is the importance now placed on the physicality of the thing to which the data refers. Thus, the tangibility test has gone “meta”: it is no longer the tangibility of jostling electrons that is of concern (as it was in the early days of patents on computer-executed information processing methods), but the tangibility of the stuff represented by those electrons-as-symbols. In the language of semiotics, the tangibility analysis has shifted from a concern about the tangibility of the signifier—the physical configuration of matter that forms a symbol—to a concern about the tangibility of the signified—the informational content of or the thing represented by the symbol.

There is in my opinion much that needs to be said about this move in Bilski that takes the long-standing concern about tangibility in the patent-eligibility analysis “meta,” transforming it from a concern about a signifier to a concern about a signified. Here, however, I limit myself to raising two initial, narrow questions.

First, the move raises a normative question: Why should we treat information about tangible things in a manner that is categorically different from the manner in which we treat information about intangible things? Having taken its cue from the Supreme Court, the Federal Circuit clearly wants to prevent patent-eligible method claims from pre-empting mathematical “fundamental principles.” Slip op. at 26. However, the most appropriate means to achieve this end would seem to be a focus on the specificity, not the intangibility, of what is meant. Why should the manipulation of data that represents my height (a presumptively physical property of my body) be patentable, yet the manipulation of data that represents my expected longevity (a property that is difficult to classify as a physical one) be unpatentable?

Second, the move raises concerns about administrability. Is data about my expected longevity about something physical, namely my body? If it is, then why isn’t the data at issue in Bilski also about something tangible? The data is after all about a property of lumps of coal, namely their expected future rate of consumption or the legal rights that individuals have with respect to them. Or, to formulate the administrability problem in a recursive manner, what about data that is about the structural qualities of electronic signals? To determine whether a method that manipulates such data is patent-eligible, it would seem again to be necessary to confront the tangibility of an electronic signal—the very question that patent doctrine has been trying to render irrelevant for several decades—but this time with the signal as a signified rather than as a signifier.

CLE: How to Draft Software Claims under Bilski

Articles and Publications, Claim Drafting Tips, Patent, Patent Cases 2008, Patentable Subject Matter

In Bilski, the Federal Circuit laid down the law of subject matter eligibility under Section 101 of the Patent Act. To be patent eligible, a claimed process must either: (1) be tied to a particular machine or apparatus, or (2) transform a particular article into a different state or thing. In all likelihood, claim limitations focused at general machines such as a “computer” will not be considered tying to “particular machine.” Bilski did not, however, decide that question – Bilski’s claims were admittedly divorced from any particular machine. On the transformation side, the court provided the example from Abele where graphically displaying “X-ray attenuation data produced in a two dimensional field by a computed tomography scanner” was sufficient transformation. Bilski’s claims were essentially knocked-out on the new mental steps doctrine – a process where all the claimed steps “may be performed entirely in the human mind is obviously not tied to any machine and does not transform any article into a different state or thing.”

Two additional points: Although the Federal Circuits points to the machine-or-transformation test as the sole test for Section 101 patentability, the court approved two ‘corollaries.’  First, field-of-use limitations continue to be “generally insufficient to render an otherwise ineligible process claim patent-eligible.” Second, “insignificant postsolution activity will not transform an unpatentable principle into a patentable process.” (quoting Diehr).  Thus, merely reciting a specific machine or particular transformation will not bring a claim into the realm of patentable subject matter unless the recitation is more than mere insignificant postolution or extra-solution activity.

Going forward, I do not believe that these limitations will have a significant impact on a skilled practitioner’s ability to patent software innovations. However, I would like community input on how you might properly claim computer software in a way that avoids § 101 rejections?

Patenting Tax Strategies Under Bilski

Patent, Patent Cases 2008, Patentable Subject Matter

Except for the few patent holders and Accenture, the tax strategy business community has been largely anti-patent – going so far as to lobby congress to introduce legislation to create a specific exception that would block enforcement of those patents.

In Bilski, the Federal Circuit refused to categorically exclude any particular fields of business or technology from the scope of patent protection. The court specifically mentioned software and business methods as still patentable. Presumably, tax strategies are still patentable as well. The closest the court came to creating an exclusion is for purely ‘mental’ processes – where each step of the process could be performed in the human mind.

Rather than an approach focusing on specific exclusions, the court applied the machine-or-transformation rule: A process is patent eligible under §101 if “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state of things.” Bilski’s claim was not patentable as a mental process. Additionally the Bilski claim failed the machine-or-transformation test because it was (1) not tied to any machine and (2) the alleged transformations in Bilski were not sufficient because they did not transform “physical objects or substances” nor did the transform articles “representative of physical objects or substances.” Notably, transformation of “legal obligations or relationships, business risks, or other such abstractions” do not qualify as ‘transformations’ under the new test. The Federal Circuit left the State Street patent hanging – we know the test used in State Street was wrong, but we don’t know whether the claimed invention would be patentable under the new test.

Going forward, tax strategies (and business methods generally) that necessarily need computer assistance will be able to obtain protection by including sufficient recitation of ties to “particular machines.” Practically, the links should be tied to particular portions of the computer to ensure that the tied machine is “particular” enough. On the transformation side, it is unclear whether the transformation of money will be considered sufficiently “representative of physical objects or substances.”

Links:

In re Bilski: Patentable Process Must Either (1) be Tied to a particular machine or (2) Transform a Particular Article

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In re Bilski, __ F.3d __ (Fed. Cir. 2008)(en banc)

The Federal Circuit has affirmed the PTO’s Board of Patent Appeals (BPAI) finding that Bilski’s claimed invention (a method of hedging risks in commodities trading) does not satisfy the patentable subject matter requirements of 35 U.S.C. § 101. In doing so, the nine-member majority opinion (penned by Chief Judge Michel) spelled out the “machine-or-transformation” test as the sole test of subject matter eligibility for a claimed process.

The Supreme Court … has enunciated a definitive test to determine whether a process claim is tailored narrowly enough to encompass only a particular application of a fundamental principle rather than to pre-empt the principle itself. A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.

….

Because the applicable test to determine whether a claim is drawn to a patent-eligible process under § 101 is the machine-or-transformation test set forth by the Supreme Court and clarified herein, and Applicants’ claim here plainly fails that test, the decision of the Board is AFFIRMED.

State Street Test Is Out: In State Street, the Federal Circuit used the “useful, concrete, and tangible result” of a process as a touchstone for patentability. In Bilski, the en banc panel found the State Street formulation “insufficient to determine whether a claim is patent-eligible under § 101.”

[W]e also conclude that the “useful, concrete and tangible result” inquiry is inadequate and reaffirm that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply.

Some Business Methods and Software Are Still In: Still, the court made clear that business methods and Software will still be patentable – if they meet the machine-or-transformation test.

We rejected [a categorical] exclusion in State Street, noting that the so-called “business method exception” was unlawful and that business method claims (and indeed all process claims) are “subject to the same legal requirements for patentability as applied to any other process or method.” We reaffirm this conclusion.

…

[A]lthough invited to do so by several amici, we [also] decline to adopt a broad exclusion over software or any other such category of subject matter beyond the exclusion of claims drawn to fundamental principles set forth by the Supreme Court

To be clear, the machine-or-transformation test is not a physicality test – i.e., a claim can still be patentable even if it does not recite sufficient “physical steps.” On the flip-side, “a claim that recites ‘physical steps’ but neither recites a particular machine or apparatus, nor transforms any article into a different state or thing, is not drawn to patent-eligible subject matter.” Here, the court spelled out the specific issue in mind: a claimed process where every step may be performed entirely in the human mind. In that situation, the machine-or-transformation test would lead to unpatentability. “Of course, a claimed process wherein all of the process steps may be performed entirely in the human mind is obviously not tied to any machine and does not transform any article into a different state or thing. As a result, it would not be patent-eligible under § 101.”

Along this line, the court also dispelled two rising concerns, noting that that (1) neither novelty nor obviousness have any relevance to the section 101 inquiry, and (2) the fact that an individual claim element is – standing alone – patent ineligible does not render the claim unpatentable because patent eligibility is considered while examining the claim as a whole.

What is a Transformation?: The courts have already developed an understanding of transformation as it relates to the Section 101 inquiry. Here, the Federal Circuit referred to the distinction made in the 1982 Abele case. There, the court distinguished between two of Abele’s claims – finding only one patentable. The unpatentable claim recited “a process of graphically displaying variances of data from average values” without specifying “any particular type or nature of data … or from where the data was obtained or what the data represented.” The patentable dependent claim identified the “data [as] X-ray attenuation data produced in a two dimensional field by a computed tomography scanner.” In retrospect, the Federal Circuit sees the difference between these two claims to be that of transformation. The second claim included sufficiently specific transformation because it changed “raw data into a particular visual depiction of a physical object on a display.” Notably, the transformation did not require any underlying physical object. As the court noted later in the opinion, the transformed articles must be “physical objects or substances [or] representative of physical objects or substances.”

The Bilski claims themselves were not seen as transforming an article:

Purported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances. Applicants’ process at most incorporates only such ineligible transformations. . . . As discussed earlier, the process as claimed encompasses the exchange of only options, which are simply legal rights to purchase some commodity at a given price in a given time period. The claim only refers to “transactions” involving the exchange of these legal rights at a “fixed rate corresponding to a risk position.” Thus, claim 1 does not involve the transformation of any physical object or substance, or an electronic signal representative of any physical object or substance.

The principle behind the test is to prevent a patentee from obtaining claims that preempt the use of fundamental principles. That principle reaches back more than 150 years to the Morse case where the inventor was precluded from claiming all uses of electromagnetism to print characters at a distance.

We believe this is faithful to the concern the Supreme Court articulated as the basis for the machine-or-transformation test, namely the prevention of pre-emption of fundamental principles. So long as the claimed process is limited to a practical application of a fundamental principle to transform specific data, and the claim is limited to a visual depiction that represents specific physical objects or substances, there is no danger that the scope of the claim would wholly pre-empt all uses of the principle.

What is a “Particular Machine”?: For software and business methods, the question will remain as to whether a general purpose computer is sufficiently particular to qualify as a “particular machine.” “We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.” As Professor Duffy noted in an earlier Patently-O article, the PTO Board of Patent Appeals (BPAI) has already answered this question: “A general purpose computer is not a particular machine, and thus innovative software processes are unpatentable if they are tied only to a general purpose computer.” See Ex parte Langemyr (May 28, 2008) and Ex parte Wasynczuk (June 2, 2008). More commonly, the claim may tie the software to computer memory or a processor – is that sufficiently particular? I suspect this fact pattern will arise shortly.

Unpatentability Affirmed

Notes:

  • Although three dissenting opinions were filed, Judge Newman is the only judge who found patentable subject matter in Bilski’s claim.
  • In Dissent, Judge Mayer thought the decision did not go far enough: “Affording patent protection to business methods lacks constitutional and statutory support, serves to hinder rather than promote innovation and usurps that which rightfully belongs in the public domain.” Citing work by Professors Dreyfuss and Pollack, Mayer argues that business method patents have the overall effect of stifling innovation by restricting competition.
  • In his Dissent, Judge Rader asks the insightful question of why a new test is necessary when settled law already answers the question. Rader would have decided the opinion with one line: “Because Bilski claims merely an abstract idea, this court affirms the Board’s rejection.” I believe Rader’s position is quite defensible. In particular, the majority justifies its need for the test as a way to ensure that we avoid the “preemption of fundamental principles.” In the majority construct, the machine-or-transformation test serves as a fairly accurate proxy for preventing preemption. The court does not, however, answer why any proxy is necessary – if the purpose is to exclude overbroad abstract ideas why not simply rely on the current rule preventing patenting of abstract ideas (as well as the law requiring full enablement)?

Concurring opinion by Judge DYK (joined by Judge LINN) attempt to reconcile the history of the patent system with the new rule of patentability.

Paul Cole, Patentability of Computer Software As Such

Articles and Publications, Patent, Patentable Subject Matter, Software

In Symbian Limited v. Comptroller General of Patents [2008] EWCA Civ 1066, the UK Court of Appeal recently took a broader approach to patentability of software. UK patent attorney and author Paul Cole has written a short article for the Patently-O Patent Law Journal discussing the case and its impact. [Paul Cole Article]. The opinion cites John Duffy’s recent “Death of Google’s Patents” article also published on Patently-O.

The Death of Google’s Patents?

Patent, Patentable Subject Matter, Software, ,

By John F. Duffy* [File Attachment (42 KB)]

            The Patent and Trademark Office has now made clear that its newly developed position on patentable subject matter will invalidate many and perhaps most software patents, including pioneering patent claims to such innovators as Google, Inc.

            In a series of cases including In re Nuijten, In re Comiskey and In re Bilski, the Patent and Trademark Office has argued in favor of imposing new restrictions on the scope of patentable subject matter set forth by Congress in § 101 of the Patent Act.  In the most recent of these three—the currently pending en banc Bilski appeal—the Office takes the position that process inventions generally are unpatentable unless they “result in a physical transformation of an article” or are “tied to a particular machine.”[1] Perhaps, the agency has conceded, some “new, unforeseen technology” might warrant an “exception” to this formalistic test, but in the agency’s view, no such technology has yet emerged so there is no reason currently to use a more inclusive standard.[2]  

            The Bilski en banc hearing attracted enormous attention, and yet there has remained a sense among many patent practitioners that the PTO’s attempts to curtail section 101 would affect only a few atypical patent claims.  The vast bulk of patents on software, business and information technology are thought by some not to be threatened because those innovations are typically implemented on a machine—namely, a computer—and the tie to a machine would provide security against the agency’s contractions of § 101.  Even if that view were right, the contraction of patent eligibility would be very troubling because the patent system is supposed to be designed to encourage the atypical, the unusual and the innovative.  But that view is wrong.

            The logic of the PTO’s positions in Nuijten, Comiskey and Bilski has always threatened to destabilize whole fields of patenting, most especially in the field of software patents.  If the PTO’s test is followed, the crucial question for the vitality of patents on computer implemented inventions is whether a general purpose computer qualifies as a “particular” machine within the meaning of the agency’s test.  In two recent decisions announced after the oral arguments in the Bilski case, Ex parte Langemyr (May 28, 2008) and Ex parte Wasynczuk (June 2, 2008),[3] the PTO Board of Patent Appeals and Interferences has now supplied an answer to that question: A general purpose computer is not a particular machine, and thus innovative software processes are unpatentable if they are tied only to a general purpose computer.  

(more…)

USPTO Examiner Guidance on Business “Processes”

Patent, Patentable Subject Matter

Patent Attorney Jeff Spangler recently attended the PTO’s business method partnership where he received a copy of the written clarification given to examiners to help them determine when a claimed business method is eligible for patent protection as a statutory process under 35 USC 101.  According to the memo:

“Based on Supreme Court precedent and recent Federal Circuit decisions, the Offic’s guidance to examiners is that a Section 101 process must (1) be tied to another statutory class (such as a particular apparatus) or (2) transform underlying subject matter (such as an article or material) to adifferent thing. If neither of these requirements is met by the claim, the method is not a patent eligible process under Section 101 and should be rejected as being directed to non-statutory subject matter.

An example of a method claim that would not qualify as a statutory process would be a claim that recited purely mental steps. Thus, to qualify as a Section 101 statutory process, the claim should positively recite the other statutory class (the thing or product) to which it is tied, for example, by identifying the apparatus that accomplishes the method steps, or positively recite the subject matter being transformed, for example by identifying the material that is being changed to a different state.

 

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