Patentable Subject Matter in the United States

Patentable Subject Matter in

the United States

October 19, 2012

Daniel Altman

Tokyo

The recipient may only view this work. No other right or license is granted.

© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 2

The Law of Patentable Subject Matter

• 35 U.S.C. § 101: “Whoever invents or discovers any

new and useful process, machine, manufacture, or

composition of matter, or any new and useful

improvement thereof, may obtain a patent therefor, . . .”

• Congress intended statutory subject matter to “include anything under the sun that is made by man.”

Diamond v. Chakrabarty, 447 U.S. 303 (1980).


Implicit Exceptions to Patentable Subject Matter

• Judge-made exceptions to Patentable Subject Matter

– Products of Nature

– Natural Laws / Natural Phenomena

– Abstract Ideas / Mental Processes

They are “part of the storehouse of knowledge … free to all men and reserved exclusively to none.”

Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948).


Gottschalk v. Benson, 409 U.S. 63 (1972)

Representative Claim

8. The method of converting signals from binary coded decimal form

into binary which comprises the steps of:

(1) storing the binary coded decimal signals . . . ,

(2) shifting the signals to the right by at least three places, until

there is a binary ‘1’ in the second position . . . ,

(3) masking out said binary ‘1’ in said second position . . . ,

(4) adding a binary ‘1’ to the first position . . . ,

(5) shifting the signals to the left by two positions,

(6) adding a ‘1’ to said first position, and

(7) shifting the signals to the right by at least [3] positions in

preparation for a succeeding binary ‘1’ in the second position . . . .


Gottschalk v. Benson, 409 U.S. 63 (1972)

Holding

• The claims are patent ineligible because they merely recite a formula, rather than its discrete/limited practical application.

• Phenomena of nature, mental processes, and abstract ideas are not patentable, for “they are the basic tools of scientific and technological work.”

• The claim is not compliant with § 101 because it “would wholly preempt the . . . Formula.”


Parker v. Flook, 437 U.S. 584 (1978)


1. A method for updating the value of at least one alarm limit . . . in .

. . the catalytic chemical conversion of hydrocarbons . . . which

comprises:

(1) determining the present value of said process variable, said

present value being defined as PVL;

(2) determining a new alarm base B1, using the following

equation:

B1=Bo(1.0-F) + PVL(F)…;

(3) determining an updated alarm limit which is defined as B1 +

K; and thereafter

(4) adjusting said alarm limit to said updated alarm limit value.


Parker v. Flook, 437 U.S. 584 (1978)

Holding

• The claims cover a formula and are therefore patent

ineligible.

• A formula cannot be patented; the case must “be considered

as if the principle or mathematical formula were well known.”

• “[O]nce that algorithm is assumed to be within the prior art,

the application . . . contains no patentable invention.”

• A patent involving a law of nature or a mathematical formula

must include some other inventive concept in the application

of that law of nature or mathematical formula.

• Post-solution activity is insufficient to render a claim patent

eligible.


Diamond v. Chakrabarty, 447 U.S. 303 (1980)


1. A bacterium from the genus Pseudomonas containing

therein at least two stable energy-generating plasmids,

each of said plasmids providing a separate hydrocarbon

degradative pathway.


Diamond v. Chakrabarty, 447 U.S. 303 (1980)

Holding

• ‘Manufacture’ is a broad term meaning “the production of articles

for use from raw materials prepared by giving to these materials

new forms, qualities, properties, or combinations whether by hand

labor or by machinery.”

• While “a new mineral discovered in the earth or a new plant found

in the wild” or a “hitherto unknown natural phenomenon” is not

patentable subject matter,” a “nonnaturally occurring manufacture

or composition of matter - a product of human ingenuity having a

distinctive name, character and use” is patentable subject matter.

• The relevant distinction is “not between living and inanimate things,

but between products of nature, whether living or not, and human-

made inventions.”


Diamond v. Diehr, 450 U.S. 175 (1981)


1. A method of operating a rubber-molding press for precision molded compounds with the aid of a digital computer, comprising:

providing said computer with a data base . . . ,

initiating an interval timer in said computer upon the closure of the press . . . ,

constantly determining the temperature (Z) of the mold . . . and constantly providing the computer with the temperature (Z),

repetitively performing in the computer … integrations to calculate from the series of temperature determinations the Arrhenius equation . . . , which is ln v = CZ + x, where v is the total required cure time,

repetitively comparing in the computer . . . said calculation of the total required cure time . . . and said elapsed time, and

opening the press automatically when a said comparison indicates completion of curing.


Diamond v. Diehr, 450 U.S. 175 (1981)

Holding

• Claim is a patent-eligible application of the mathematical

formula.

• Claims are “drawn to an industrial process,” and therefore

do not wholly preempt the use of the equation recited in the

claim.


Bilski v. Kappos, 130 S. Ct. 3218, 561 US ___ (2010)


1. A method for managing the consumption risk costs of a commodity … comprising the steps of:

(a) initiating a series of transactions … wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;

(b) identifying market participants for said commodity having a counter-risk position to said consumers; and

(c) initiating a series of transactions … at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.


Bilski v. Kappos, 130 S. Ct. 3218, 561 US ___ (2010)

Holding

• Hedging risk is an unpatentable abstract idea.

• The claim would wholly preempt the use of this approach in

all fields and grant a monopoly over an abstract idea.

• Limiting this abstract idea to one field of use or adding

token post-solution steps does not render this claim

compliant with §101.

• The machine-or-transformation test is not the definitive test

of patent eligibility, but is merely a useful tool in the

analysis.


Cybersource v. Retail Decisions


3. A method for verifying the validity of a credit card transaction over the Internet comprising the steps of:

a) obtaining information about other transactions that have utilized an Internet address that is identified with the credit card transaction;

b) constructing a map of credit card numbers based upon the other transactions; and

c) utilizing the map of credit card numbers to

determine if the credit card transaction is valid.


Cybersource v. Retail Decisions

• Holding the claim does not satisfy § 101.

• “[W]e have never suggested that simply reciting the use of a computer to execute an algorithm that can be performed entirely in the human mind [is sufficient].”

• “Regardless of what statutory category (‘process, machine, manufacture, or composition of matter,’ 35 U.S.C. § 101) a claim’s language is crafted to literally invoke, we look to the underlying invention for patent-eligibility purposes.”

• “[T]he machine must play a significant part in permitting the claimed method to be performed.”


Ultramercial v. Hulu


1. A method for distributing products over the Internet via a facilitator, said method comprising the steps of:

a first step of receiving, from a content provider, media products that are covered by intellectual property rights protection and are available for purchase . . . ;

a second step of selecting a sponsor message to be associated with the media products . . . ;

a third step of providing the media product for sale at an Internet website;

a fourth step of restricting general public access to said media product;

a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;

. . .

an eleventh step of receiving payment from the sponsor of the sponsor message displayed.


Ultramercial v. Hulu

Holding

• Claim satisfies § 101

• Vacated by the Supreme Court (and remanded to Federal Circuit)

• “[T]he broadly claimed method in the ’545 patent does not specify a

particular mechanism for delivering media content to the consumer

(i.e., FTP downloads, email, or real-time streaming). This breadth

and lack of specificity does not render the claimed subject matter

impermissibly abstract.”

• “[A]s a practical application of the general concept of advertising as

currency and an improvement to prior art technology, the claimed

invention is not ‘so manifestly abstract as to override the statutory

language of section 101.’”

Daniel Altman 2040 Main Street, 14th Floor

Irvine, California 92614

[email protected]

Patentable Subject Matter in the United States

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