Archive for the ‘Section 101’ Category

What, if anything, does Mayo v. Prometheus mean for Software Patents?

Wednesday, April 4th, 2012

Recently, the Supreme Court decided Mayo Collaborative Services (“Mayo”) v. Prometheus Laboratories, Inc. (“Prometheus”). Although it does not involve software patents, the decision clarifies the proper place of the Machine-or-Transformation test in section 101 analysis, discusses abstract principles of nature, and rejects a recent suggestion by the Federal Circuit to invalidate a claim under Section 101 only after it first passes muster under Sections 102, 103 and 112.

At issue here are two patents—U. S. Patent No. 6,355,623 (’623 patent) and U. S. Patent No. 6,680,302(’302 patent)—which, cover “processes that help doctors who use thiopurine drugs to treat patients with autoimmune diseases determine whether a given dosage level is too low or too high.” Id. at 3. Mayo Collaborative Servs. v. Prometheus Labs., Inc., No. 10–1150, slip op. at 5 (Mar. 20, 2012). “The claims purport to apply natural laws describing the relationships between the concentration in the blood of certain thiopurine metabolites and the likelihood that the drug dosage will be ineffective or induce harmful side-effects.” Id. at 3.

Claim 1 of the ’623 Patent is illustrative:
A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:
(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and
(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,
wherein the level of 6-thioguanine less than about 230 pmol per 8×108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and
wherein the level of 6-thioguanine greater than about 400 pmol per 8×108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.
’623 patent, col. 20, ll. 10–20, 2 App. 16.

Prometheus “is the sole and exclusive licensee of the ’623 and ’302 patents.” Id. at 6. “It sells diagnostic tests that embody the processes the patents describe.” Id. This dispute arose when Mayo stopped using the Prometheus test and “announced that it intended to begin using and selling its own test.” Id. The District Court found for Mayo, noting that although its test did infringe Prometheus’s patents, the patents were invalid as they claimed natural laws. Id. at 6–7. On Appeal, the Court of Appeals for the Federal Circuit reversed, noting that the invention met the machine-or-transformation test because the steps in the claims “involve the transformation of the human body or of blood taken from the body.” Id. at 7.

Upon review, the Supreme Court rejected the Federal Circuit’s analysis and held that the patents were invalid. Id. at 24. On the one hand, this decision can be read quite narrowly. The Court does say it is not persuaded that there is a relevant transformation here and, accordingly, the machine-or-transformation test fails. Id. at 19. There is, however, a lot more to this decision than a mere disagreement as to how the machine-or-transformation test applies to Prometheus’s claimed invention. The Court also says that “the ‘machine-or-transformation’ test is an ‘important and useful clue’ to patentability,” but it does not “trump[] the ‘law of nature’ exclusion.” The Court further explained, “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” 2. The question then becomes “whether the claimed processes have transformed these unpatentable natural laws into patent eligible applications of those laws.” Id. at 3.

Ultimately, we are left with little guidance from the Court. It is quite clear that analysis under Section 101 is here to stay. It also clear that the machine-or-transformation is now a useful clue rather than a test. But a new test was not provided. Only time will tell how the courts, the USPTO, and practitioners apply this decision.

Machine-or-Transformation is not always enough.
With a bit of sleight of hand, the Court cites Bilski v. Kappos for the proposition that the machine-or-transformation test “is not a definitive test of patent eligibility, but only an important and useful clue.” Id. at 7. It is helpful to look back at Bilski to spot the sleight of hand. “This Court’s precedents establish that the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible ‘process.’” Bilski v. Kappos, 130 S. Ct. 3218, 3227 (2010). Bilski never said that the machine-or-transformation was insufficient to determine whether a process was patent-eligible. Instead, it said that there might also be other ways to identify a patent-eligible process. After Mayo, the machine-or-transformation test is not really a test at all. Rather, it is, as the Court says, a useful clue.

The transformation branch of the machine-or-transformation test now seems less than dispositive. This suggests that software patents should, when possible, include claims that tie the invention to a machine. Claims that are tied to a machine are often more difficult to draft broadly than a process claim, so include both. More importantly, claims directed to software inventions should be described, as much as possible, in terms of actual electronic circuits that are programmed to carry out a series of electronic operations. The more detail provided at the electronic circuit level, the better.

Applying an abstract principal of nature is not enough.
It has long been understood that a principle of nature cannot be patented. See Mayo, at 1. The Court also explains that “to transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words ‘apply it.’” Id. at 3. To cover patent-eligible subject matter, the claim must contain an “‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself.” Id. This again suggests that narrow claims are more likely to withstand judicial scrutiny. At times, the Court discusses algorithms in the same breath as principles of nature – as though algorithms are all laws of nature floating in the ether awaiting discovery. Claims tied to a machine do not ensure that the “invention” therein recited is patent-eligible, but could improve the odds that the claimed invention will be viewed as a Seciton 101 compliant “machine.”

Section 101 is not going away.
The Court also weighed in on the ongoing debate in the Federal Circuit on the judicial morass of section 101, which we have discussed previously. In rejecting a proposal offered by the United States as Amicus Curiae, the Court said that relying on Sections 102, 103, and 112 in place of Section 101 would be inconsistent with prior case law. Id. at 20–22. Further, this approach would “creat[e] significantly greater legal uncertainty.” Id. at 21. The Court did acknowledge that there at times may be overlap between Section 101 analysis and the other sections of the patent act. Id. But it also noted that the other sections are unequipped to deal with laws of nature. Id. It seems that Section 101 analysis and uncertainty is here to stay.

CLS Bank Int’l: DC District Court Drives Stake into “Heart” of Business Method Patents

Sunday, March 20th, 2011

In CLS Bank v Alice (D.D.C. 2011),  the District Court for the District of Columbia found four patents (U.S. Patent No. 7149720; U.S. Patent No. 6912510; U.S. Patent No. 5970479; and U.S. Patent No. 7725375) owned by Alice Corporation invalid under 35 U.S.C. Sec. 101.   In short, the district court found that the “heart” of the patented invention in suit, as claimed in its various forms (including method claims, system claims and Beauregard claims) was a business method “directed to an abstract idea of employing an intermediary to facilitate simultaneous exchange of obligations in order to minimize risk.”  The court found this idea was “a basic business or financial concept” much like that struck down in Bilski v. Kappos, 130 S. Ct. 3218 (2010)

In distinguishing Research Corp. Techs. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010), the district court noted that  “[u]nlike the concrete and palpable blue noise mask and pixel-by-pixel comparison method which resulted in a higher quality halftone digital image all while using less processor power and memory space which was before the Federal Circuit in Research Corp., see 627 F.3d at 865, Alice’s method claims are hardly limited to “specific applications” of an fundamental concept.” 

As to the system claims of the ’720 patent, the court found the claims, “as written, would wholly preempt the use of the abstract concept in any computer.”  The court further noted that “[d]espite the fact that the ’720 Patent system claims and Alice’s asserted method claims are directed to different patent eligible categories under § 101, their preemptive effect would be largely one and the same.”

 The Beauregard “article of manufacture” claims, in the court’s view, fared no better than the system claims:  “Lastly, the three program claims in the ’375 Patent are also directed to the same abstract concept despite the fact they nominally recite a different category of invention under § 101 than the other claims asserted by Alice.” 
While the court’s decision gave little or no heed to the system or article of manufacture claims of the CLS patents, it did recognize that under some circumstances the application of an abstract concept can be patentable:  “To be sure, the application of an abstract idea does not render a claim unpatentable under § 101, see Diehr, 450 U.S. at 187, however these claims seek to claim the fundamental  concept itself, and not a limited or specific application of the concept.” 
As the courts, patent practicioners and industry all struggle to understand the contours of the “abstract idea” exception to Section 101 subject matter, it is helpful to have a somewhat broader construct in which to understand this evolving legal doctrine.  Here are a few of my thoughts on the subject:
1) All inventions begin as “ideas,” since, at least at the instance of conception, all inventions arise as a thought in the human mind. 
2) Not all inventive ideas, however, despite existing only as thought, are considered “abstract”, so as to fall within the judicially created exceptions to Section 101 subject matter, for if all inventive ideas were considered “abstract”, all claimed inventions would require analysis to determine if they “wholly preempt” the abstract idea from which they were born.   In other words, every invention would have an “abstract idea” component that could not be “wholly preempted.”  Since this type of analysis, so far, has not been applied to all inventive ideas, we can deduce that only certain types of “abstract ideas” are considered objectionable under the judicially created exceptions to Section 101 subject matter. 
3) Accordingly, the judicially-created exceptions to patent-eligibility under Section 101 implicitly sorts ideas into those that are “abstract” and those that are not. 
4)  Based on the exceptions explicitly enumerated by the Supreme Court to date, it is not clear if scientific principles, laws of nature and mathematical algorithms are not considered abstract ideas, but rather are excluded from Section 101  for separate reasons. 
5) Precisely why financial and/or contract-based ideas are considered excluded “abstract ideas”, while other ideas, although existing only in the human mind, are somehow considered “not-abstract”, is unclear based on jurisprudence to date.
6)  If we accept the proposition that some ideas are not considered abstract, and therefore do not have to be analyzed as a judicially-created exception to Section 101, and others are abstract, and therefore cannot “wholly preempt” the ideas, then we need one or more rules to logically seperate objectionable abstract ideas from non-objectionable ideas. 
7) One can argue that the Research Corp. case, introduced the “technological arts” test to determine if an idea is abstract and therefore subject to the restrictions governing the patenting of abstract ideas, or are not, and therefore not subject to those restrictions.  (“Indeed, this court notes that inventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act.” (emphasis added) Research Corp., Id. at 869.)  
8) In the instant case, the court in CLS seems to acknowlege this test by finding that there were no technological innovations described in the CLS patents — that only routine, non-innovative application of technology was described for implementing the judicially excluded abstract ideas.
So, what’s the practicioner to do?  I would say, for now, that if you are patenting inventions related to a financial or contractual idea, consider claiming first those aspects of the innovation that involve non-obvious implementations of the idea.  You might also consider filing at least one application that avoids discussing the financial or contractual aspects of the innovation at all, instead treating the data representative of such financial or contractual aspects generically as “processed data.”  If there is no point of novelty left after subtracting the financial or contractual limitations from the claims, then be forwarned that the claim may not pass muster under Section 101 if the logic used in CLS holds up on appeal.

BPAI Finds Method for Interpreting an MRI Image Statutory Even Though Not Tied to a Machine Implementation

Sunday, February 20th, 2011

In Ex Parte Jack, (Appeal 2009-015192), handed down February 9, 2011, the Board of Patent Appeals and Interferences (BPAI) found a method for classifying tissue in a magnetic resonance image statutory subject matter under Section 101.  The BPAI reversed the Examiner’s rejection of the claim under Section 101, as well as a rejection of the claims under Section 103.  Quoting from the opinion:

 “Similar to the Research Corporation claims, the instant claims are directed to a method for interpreting a magnetic resonance image by measuring, pixel-by-pixel, the image intensity and statistically analyzing a frequency-versus-intensity histogram. The Examiner has not alleged that the claims are directed to a law of nature or physical phenomenon, and we conclude that the claimed process is not so manifestly abstract as to override the broad statutory categories of eligible subject matter recited in § 101. SeeResearch Corporation, 627 F.3d at 868. The rejection of the claims as directed to nonstatutory subject matter is reversed.”

 The Specification of the Ex Parte Jack application discloses a method for “automatically measuring the volume of tissue in a region of interest by acquiring a magnetic resonance image, constructing a pixel intensity histogram of the image, and segmenting the histogram using a statistical regression analysis” (Spec. 5, qr 18). The “histogram is produced by counting the number of image pixels at each possible image intensity level and plotting the result as a frequency versus intensity graph” (id. at 5, qr 20).

Claims 1 and 4 are representative of the claims found statutory and read as follows:

1. A method of classifying tissue in a magnetic resonance image, the method comprising:

(a) acquiring a magnetic resonance image of a region of interest;

(b) constructing a pixel intensity histogram of the magnetic resonance image; and

(c) applying a statistical regression analysis to the histogram to determine a pixel intensity threshold value for segmenting the histogram into at least two regions, wherein at least one of the regions is representative of a tissue of interest.

4. The method as defined in claim 1, wherein the statistical regression analysis of step (c) comprises:

(i) identifying a consistently identifiable statistical characteristic of the histogram;

(ii) determining a statistical parameter of the consistently identifiable statistical characteristic; and

(iii) applying the statistical parameter as an independent variable in a regression analysis to determine a threshold value to classify pixels based on pixel signal intensity.

            What is interesting about this case and the RCT decision is that the method claims in question are not in any way tied to a computer implementation, although in both cases the claims involve imaging applications so are inherently limited to the interpretation or display of images that are certainly not “manifestly abstract.”  If this line of reasoning holds up, patentees and practicioners may finally be relieved from having to follow formalistic claiming conventions invoking computer implementation of methods in order to avoid abstract idea objections under Section 101.  These formalisms do little if anything to limit the substantive scope of claims but can complicate claim drafting so as to introduce unnecessary limitations that unfairly limit the patentee’s claim scope purely to meet formalistic and anachronistic Section 101 requirements.

Research Corporation Technologies Inc. v. Microsoft Corp.: Sanity Returns to Section 101 Abstraction Analysis

Thursday, December 9th, 2010

Since the U.S. Supreme Court’s Bilski v. Kappos decision, there have been a raft of District Court and Board decisions that took the “abstract idea” exclusion for patentable subject matter past the point of absurdity.  Thankfully it did not take long for some sanity to return to the legal precedent on this all-important issue.   On December 8, a three judge panel (Judges Rader, Newman and Plager) of the U.S. Court of Appeals for the Federal Circuit ruled that, to be found unpatentable under the abstract idea exclusion from 35 U.S.C. §101, an invention’s abstractness must “exhibit itself so manifestly as to override the broad statutory categories” of patent eligibility.  Research Corporation Technologies Inc. v. Microsoft Corp., Fed. Cir., No. 2010-1037, 12/8/10.  RCT v. Microsoft Federal Circuit Decision

The patents in question, owned by Research Corporation Technologies Inc. (for a profile of this company’s patent holdings see:, involved digital imaging process claims.  The Federal Circuit found that these claims, which had been found unpatentable under Section 101 by the district court, are patentable subject matter because they claim “functional and palpable applications in the field of computer technology.”


In re Kelkar — Half Right for the Wrong Reason?

Sunday, November 28th, 2010

In re Kelkar involves a patent application owned by the IBM Corporation that claims methods and computer program articles for processing gene expression profiles to find clusters of similar profiles.  The Board of Patent Appeals and Interferences found the following claim 1 of the application non-statutory as attempting to claim a prohibited abstract idea under Bilski v. Kappos, 561 U.S. ___ (2010):

 1.  A method for determining similarity between portions of gene expression profiles in a computer comprising the steps of:

processing a number of gene expression profiles with a similar sequences algorithm that is a time and intensity invariant correlation function to obtain a data set of gene expression profile pairs and a match fraction for each gene expression profile pair;

listing gene expression profile pairs in clusters by their match fractions;

removing a first gene expression profile from a cluster when another cluster has another gene expression profile with a higher match fraction with the first gene expression profile, unless the another gene expression profile requires a larger number of subsequences to achieve similarity with the first gene expression profile;

repeating the removing step until all gene expression profiles are listed in only one cluster;

providing output of the listing of clusters of gene expression profiles. (emphasis added)


The Board Takes Bilski for a Test Drive and Runs Over Some Software Claims

Tuesday, September 28th, 2010

July and August have been busy months for the Board of Patent Appeals and Interferences.  Not including the Ex Parte Proudler and Ex Parte Birger cases I previously reported on, the BPAI has issued at least ten opinions in which software-related claims were rejected under Section 101 in view of Bilski.  These opinions, excerpts of which are provided below, present both understandable and puzzling Section 101 rejections.  A number of the rejections are understandable due to a lack of computer structure or electronic functionality in the claim to tie the software elements to a machine implementation. Of particular note, it appears that machine limitations in method claims are not enough per se to bring the claim into the machine sphere of the machine or transformation test, according to these Board decisions, despite the PTO’s Interim Guidance, which seems to indicate otherwise.


Have Software Patent Critics Been Drinking Their Own Cool-Aid for Too Long?

Monday, September 6th, 2010

The anti-software patent rhetoric has really ramped up ever since Apple sued HTC, Oracle sued Google and Paul Allen’s Interval Licensing sued Apple, Google and others.  Just about every day there is another diatribe about the insanity of software patents.  The problem with these commentaries is that they are premised on so many mistaken assumptions it’s difficult to believe that the authors have put even an ounce of critical thought or research into their opinions.

To begin with, technically and substantively, software per se is not patentable in the US or any other country that I am aware of.  Patents only cover the electronic functionality that is produced or enabled by a programmed machine.  Even so-called Beauregard claims, which cover computer instructions encoded on  computer media, are predicated strictly on the electronic functionality carried out by a machine executing the instructions — i.e., the patentability of such claims is predicated on the electronic functionality, not words or symbols in a list of instructions.


Bilski vs. Kappos Death Star Vaporizes Ultramercial Patent

Thursday, August 26th, 2010

I don’t want to be overly dramatic, but if the Ultramercial, LLC et al. v. Hulu, LLC, et al., decision (U.S. District Court for the Central District of California)  (Ultramercial Decision) holds up on review at the Federal Circuit, the Bilski v. Kappos decision may become an unstoppable death star for any computer-related invention that hinges on an “abstract idea.”  

The inventions at issue (US Patent 7,346,545 — US07346545) are both expressly claimed as methods for distribution of products over the Internet and are clearly and unequivocably limited to use with the Internet, an Internet web site and interactive messages.  Although the claim could be more explicit, it would also be reasonable to interpret many of the steps specified in the claims as Internet-implemented.  Notwithstanding the express limitations tying the invention to an Internet implementation, the Court found that the claims were not “meaningfully” limited to machine implementation and, accordingly, did not pass muster under the machine prong of the machine or transformation test. The claims also failed the transformation test as well according to the Court.

I think the following passage from the opinion fairly well sums up Judge Klausner’s thinking about the value of limiting claims to computers or computer networks in order to pass the machine test: 


Experience Teaches that Lack of Sales, not Software Patents, Kill Innovative Products

Tuesday, August 24th, 2010

I have been a patent attorney since 1981 and have always been interested in software as a hobby, as an investor, as an entreprenuer, and most predominantly as an intellectual property attorney who has helped countless software companies establish the intellectual property procedures and protections they needed in order to try to build a viable enterprise.   Along the way, I have recommended many different strategies to my clients running the gamut from giving away their code, making their code open source but subject to license restrictions, keeping their source code trade secret and licensing only object code under a restrictive license, and including sometimes a recommendation to make patent protection a core protection strategy.  The approach a company takes will depend greatly on the demands of the industry they seek to compete in and the amount of risk the company must take to establish an ongoing concern.

Unfortunately, I have seen many of these start-up software companies go under — many after years of a hard fight to get traction.  Not a single one ever died because they were sued for patent infringement or even because there was a danger of patent infringement or being sued.  No, the real problem facing software companies, contrary to notions promoted by certain anti-patent organizations, is not the risk of infringing a patent but rather the risk of not being able to find any customers who want to buy, or sometimes even use, their software.  As Bob Dylan sings in the song Workingman Blues, “Sometimes no one wants what we got, Sometimes you can’t give it away.”  As Bob knows from experience, the first thing an author worries about is just getting someone to want their stuff, and if that ain’t happening, they won’t be worried too much about getting sued for infringement.  The reality is that most of new innovation just can’t find profitable traction in the marketplace — not even enough “profit” to keep one programmer going.  In other words, its the lack of sales that kills innovative new products, not software patents.


A Quick Look at a Representative Claim in Ferguson v. Kappos, the “Other” Business Method Case Disposed of by the Supreme Court

Tuesday, August 3rd, 2010

The interim guidance published by the USPTO last month (see my postings of last week) noted that the day after deciding Bilski, the Supreme Court denied certiorari in Ferguson v. Kappos, U.S. Supreme Court No. 09–1501, while granting, vacating, and remanding two other Federal Circuit section 101 cases. The USPTO guidance surmised that the denial of certiorari left intact the rejection of all of Ferguson’s claims, and that although the Federal Circuit had applied the machine-or-transformation test to reject Ferguson’s process claims, the Supreme Court’s disposition of Ferguson made it likely that the Ferguson claims also run afoul of the abstract idea exception.  As such, if you have not yet seen Ferguson’s claim 1, which is representative, here it is:

1. A method of marketing a product, comprising:

developing a shared marketing force, said shared marketing force including at least marketing channels, which enable marketing a number of related products;

using said shared marketing force to market a plurality of different products that are made by a plurality of different autonomous producing company [sic], so that different autonomous companies, having different ownerships, respectively produce said related products;

obtaining a share of total profits from each of said plurality of different autonomous producing companies in return for said using; and

obtaining an exclusive right to market each of said plurality of products in return for said using.

Clearly this claim does not require any physical steps per se, or require the use of any “mechanisms”, as its core limitations constitute the abstract concepts of marketing, obtaining exclusive rights and sharing profits.