November 9, 2009, Bilski v. Kappos was argued in the US Supreme Court, and the outcome of this case is expected to refine for the patent community the subject matter that may qualify, i.e., be patent eligible, for a
The US Supreme Court held in Diamond v. Diehr (1981) that a patent application describing an industrial process for effecting the opening of a rubber-molding press of a patent application, and claiming the use of a computer executing an equation, was indeed patent eligible. In doing so, the Court clarified the patent eligibility of software, embodied as algorithms in a computer, (perhaps) so long as the claimed process involved transforming or reducing an article (e.g., a rubber-based composition) into a different state or thing (e.g., a rubber-based, heat-cured article).
The intermediate/appellate federal court for patents (i.e., the Court of Appeals for the Federal Circuit, often referred to as the Federal Circuit) found in a 1998 case (State Street) that the opinion of Diamond v. Diehr meant that so long as the result of the process produced a useful, concrete and tangible result, then the process claim was patent eligible - and thereafter could be examined/analyzed for patentability. In that case, a patent eligible process need not produce an article; a patent eligible process claim could involve the transforming of data within a machine to produce a final share price, i.e., a useful, concrete and tangible result.
The Federal Circuit took up this matter again (In re Bilski, 2008), where the result was balanced risk, and where no machines/computers, nor compositions of matter, were involved in the claims at issue. The Federal Circuit held that the results-based test of State Street should no longer be relied upon to determine the patent eligibility of a process claim, and the Federal Circuit provided a new test (or rather, restated a Supreme Court test) for the patent eligibility of a method/process claim: the claimed process must transform matter or must transform representations (e.g., electronic signals representative) of tangible/physical articles, or the process (e.g., at least one inventive step of the process claim) must be tied to a machine. We await the opinion of the Court, expected in the spring of 2010, as to whether this machine-or-transformation test will stand, fall, or be revised.
The USPTO issued new interim patent subject matter eligibility examination instructions, and maintains a reference web page for business method related materials.
A note for patent prosecutors: the US Board of Patent Appeals and Interferences, in the precedential opinion of Ex Parte Gutta, requires an affirmative response to each part of a two-part inquiry in order of find a claim involving a mathematical algorithm to be patent-eligible. “For a claimed machine (or article of manufacture) involving a mathematical algorithm, (1) Is the claim limited to a tangible practical application, in which the mathematical algorithm is applied, that results in a real-world use (e.g., “not a mere field-of-use label having no significance”)? (2) Is the claim limited so as to not encompass substantially practical applications of the mathematical algorithm either ‘in all fields’ of use of the algorithm or even in ‘only one field?’ If the machine (or article of manufacture) claim fails either prong of the two-part inquiry, then the claim is not directed to a patent eligible matter.”
