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DNA Not Patentable Subject Matter – Synthetically Created DNA (cDNA) Is A Patentable Subject

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The U.S. Supreme Court, in a critical ruling, held that the naturally occurring segments of deoxyribonucleic acid (DNA) in the human body (and presumably in other living organisms) is not patent eligible subject matter under 35 U. S. C. §101 by virtue of its isolation from the rest of the human genome. However, synthetically created DNA known as complementary DNA (cDNA), which contains the same protein-coding information found in a segment of natural DNA but omits portions within the DNA segment that do not code for proteins is patent eligible subject matter. Assoc. for Molecular Pathology v. Myriad Genetics, Inc., Case No. 12-398 (S. Ct. June 13, 2013) (available here).  “[W]e hold that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring.”

Myriad discovered the precise location and sequence of what are now known as the BRCAI and BRCA2 genes which can be used to predict a certain type of breast cancer in women.  Myriad identified the exact location of the BRCA1 and BRCA2 genes on chromosomes 17 and 13. Chromosome 17 has approximately 80 million nucleotides, and chromosome 13 has approximately 114 million.  Within those chromosomes, the BRCA1 and BRCA2 genes are each about 80,000 nucleotides long. If just exons are counted, the BRCA1 gene is only about 5,500 nucleotides long; for the BRCA2 gene, that number is about 10,200.

Myriad obtained a patent on the BRCAI and BRCA2 genes and built a lucrative and, to some, a controversial business testing for these genes.  Isolation is necessary to conduct such genetic testing, and Myriad was not the only entity to offer BRCA testing after it discovered the genes.

“We have ‘long held that this provision contains an important implicit exception [:] Laws of nature, natural phenomena, and abstract ideas are not patentable.’ Mayo, 566 U. S., at _ (slip op., at 1).   Rather, ‘they are the basic tools of scientific and technological work’ that lie beyond the domain of patent protection.” Id., at _ (slip op., at 2).

“As we have recognized before, patent protection strikes a delicate balance between creating ‘incentives that lead to creation, invention, and discovery’ and ‘imped[ing] the flow of information that might permit, indeed spur, invention.’” Id., at _ (slip op., at 23).  “Instead, Myriad’s principal contribution was uncovering the precise location and genetic sequence of the BRCA1 and BRCA2 genes within chromosomes 17 and 13. The question is whether this renders the genes patentable.”

“In this case, by contrast, Myriad did not create anything. To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention.”

“Myriad found the location of the BRCA1 and BRCA2 genes, but that discovery, by itself, does not render the BRCA genes ‘new … composition[s] of matter,’ §101, that are patent eligible.”  Myriad explained that the location of the gene was unknown until Myriad found it among the approximately eight million nucleotide pairs contained in a subpart of chromosome 17.

“As already explained, creation of a cDNA sequence from mRNA results in an exons-only molecule that is not naturally occurring.”  Therefore, cDNA is patentable since it is created by man.

Fractured Patent Appeals Court Casts Shadow Over Computer Software Patents

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The Court of Appeals for the Federal Circuit (the Federal Circuit), in a highly fractured en banc decision, throws doubt on the validity of many computer software patents in its recent decision,  CLS Ba by nk International v. Alice Corporation, Case No. 2011-1301 (Fed. Cir. May 10, 2013) (available here).  Rather  than clarify the law as to whether computer program patents (with computer method claims, computer media claims and computer system claims) are patent eligible subject matter under the Patent Act, Section 101, 35 U.S. C. Sec. 101, the per curium opinion notes “While Chief Judge Rader is correct to note that no single opinion issued today commands a majority, seven of the ten members, a majority, of this en banc court have agreed that the method and computer-readable medium claims before us fail to recite patent-eligible subject matter. In addition, eight judges, a majority, have concluded that the particular method, medium, and system claims at issue in this case should rise or fall together in the§ 101 analysis.”

Procedurally, the trial court had earlier held that certain claims of Alice’s patents were invalid under 35 U.S.C. § 101 as being abstract ideas which are not patentable subject matter under the Patent Act.  The first Federal Circuit decision held that Alice’s patent claims were all patent eligible under § 101.  CLS Bank Int’s v. Alice Corp., 685 F.3d 1341 (Fed. Cir. 2012), vacated, 484 F. App’x 559 (Fed. Cir. 2012).  As noted, the Federal Circuit vacated its earlier ruling and, in this en banc case before all the appellate court judges, the Court affirmed “the district court’s judgment in its entirety and [held] that the method, computer-readable medium, and corresponding system claims … recite patent-ineligible subject matter under 35 U.S.C. § 101.”

Because the opinions from the highly divided Court span 135 pages, only the per curium opinion is reported herein. The Court’s opinion is extensively quoted since condensation may further confuse our readers.

“The statute sets forth four broadly stated categories of patent-eligible subject matter: processes, machines, manufactures, and compositions of matter. As the Supreme Court has explained, Congress intended that the statutory categories would be broad and inclusive to best serve the patent system’s constitutional objective of encouraging innovation.” (citing Diamond v. Diehr, 450 U.S. 175, 191 (1981) and  Diamond v. Chakrabarty, 447 U.S. 303, 308-09 (1980)).

“While the categories of patent-eligible subject matter recited in § 101 are broad, their scope is limited by three important judicially created exceptions. ‘[L]aws of nature, natural phenomena, and abstract ideas’ are excluded from patent eligibility, Diehr, 450 U.S. at 185, because such fundamental discoveries represent ‘the basic tools of scientific and technological work.’” (citing  Gottschalk v. Benson, 409 U.S. 63, 67 (1972)).

“But danger also lies in applying the judicial exceptions too aggressively because ‘all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.’ Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012). Taken too far, the exceptions could swallow patent law entirely.”

Preemption

“For example, deciding whether or not a particular claim is abstract can feel subjective and unsystematic, and the debate often trends toward the metaphysical, littered with unhelpful analogies and generalizations. What is needed is a consistent, cohesive, and accessible approach to the § 101 analysis – a framework that will provide guidance and predictability for patent applicants and examiners, litigants, and the courts. As set forth below, the Supreme Court’s foundational § 101 jurisprudence offers the guideposts to such a system, one that turns primarily on the practical likelihood of a claim preempting a fundamental concept.”

Once the abstract idea is identified, the Supreme court has “measured the scope of the claims [in the Benson case] against the scope of that overarching abstract idea. In practice, the claims [in for converting binary coded decimal (BCD) numerals into pure binary numerals] were ‘so abstract and sweeping as to cover both known and unknown uses of the BCD to pure binary conversion’ and would thus reach every application of the basic conversion algorithm, in contrast to earlier cases concerning patent-eligible process claims that had been cabined to discrete applications ‘sufficiently definite to confine the patent monopoly within rather definite bounds.’” (citing Gottschalk v. Benson, 409 U.S. at 68 – 69).

In Benson, the Supreme Court said: ”The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself.”  Id. at 71 – 72.   However in that Benson case, the predecessor of the Federal Circuit, the CCPA, had approved those patent claims and “had interpreted both claims as requiring a computer and had upheld them on that basis.”  See In re Benson, 441 F.2d 682, 687-88 (CCPA 1971).

“Six years later [after Benson], in Parker v. Flook, 437 U.S. 584 (1978), the Supreme Court again considered the patent eligibility of a computerized process – in particular, a method for updating alarm limits for continuously monitored industrial process variables (e.g., temperature or pressure) according to a disclosed mathematical formula.”

“Although the claim would not wholly preempt’ the mathematical formula, id. at 589, the [Supreme] Court nonetheless held that the claimed process fell under the abstract ideas exception to patent eligibility. In its analysis, the Court viewed the formula as an abstract principle and stated that the case must ‘be considered as if the principle or mathematical formula were well known.’ Id. at 592. The Court then asked whether, to confer patent eligibility, the claim contained sufficient substance beyond the abstract mathematical formula itself-that is, ‘some other inventive concept in its application.’ Id. at 594; see also id. at 590 (‘A competent draftsman could attach some form of post-solution activity to almost any mathematical formula . . . .’). Concluding that the field-of-use, monitoring, adjusting, and computer limitations were trivial or ‘well known’ under such an analysis, the Court held that the claims were not patent eligible, …).”

In Diamond v. Diehr, 450 U.S. 175, 191 (1981), “[t]he claimed methods included steps for operating a rubber molding press that included constantly determining the temperature inside the mold, repetitively calculating the necessary cure time using a mathematical formula known as the Arrhenius equation, and opening the press whenever the elapsed cure time equaled the calculated necessary cure time.”

“[T]he [Supreme] Court distinguished Flook on the basis that the claim there provided no substantive details regarding the method’s actual performance— rather, ‘[a]ll that it provides is a formula for computing an updated alarm limit.’  See id. at 186–87 (quoting Flook, 437 U.S. at 586). In contrast, in Diehr, the claimed process incorporating the Arrhenius equation also called for steps including ‘constantly measuring the actual temperature inside the mold,’ a step that was said to be new in the art. See id. at 178 – 79.”

The Federal Circuit then discussed Bilski v. Kappos, 130 S. Ct. 3218 (2010).  “Applying Benson, Flook, and Diehr, the Supreme Court held that the claims [in Bilski] failed to recite a patent-eligible process because they covered the abstract idea of hedging against risk. ‘Allowing [the claims] would pre-empt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea.’ Id. at 3231.”

The Federal Circuit further considered Mayo v. Prometheus.  “Accordingly, the claims [in Mayo] recited the specific steps of administering the thiopurine drug and determining the resulting metabolite concentration in the patient’s blood, wherein a concentration above or below predefined thresholds indicated a need to adjust the drug dose. See id. at 1295 (claim 1).”  “The Supreme Court held that those claims failed the § 101 test for subject-matter eligibility. Therefore, the question was ‘whether the claims do significantly more than simply describe these natural relations’; did they ‘add enough’ to the natural law to render the claimed processes patent eligible? Id. at 1297. Examining the other limitations, the [Supreme] Court concluded that the ‘administering’ and ‘determining’ steps were insufficiently limiting or inventive to confer patent eligibility.”

“First and foremost is an abiding concern that patents should not be allowed to preempt the fundamental tools of discovery-those must remain ‘free to all … and reserved exclusively to none.’ Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948).” Preemption features prominently in the Supreme Court’s decisions of Mayo, 132 S. Ct. at 1301; Bilski, 130 S. Ct. at 3231; Diehr, 450 U.S. at 187; Benson, 409 U.S. at 72, O’Reilly v. Morse, 56 U.S. 62, 113 (1853) (rejecting a claim that would have broadly conferred “a monopoly” in the use of electromagnetism, ”however developed, for the purpose of printing at a distance”).

“To be clear, the proper focus is not preemption per se, for some measure of preemption is intrinsic in the statutory right granted with every patent to exclude competitors, for a limited time, from practicing the claimed invention. See 35 U.S.C. § 154. Rather, the animating concern is that claims should not be coextensive with a natural law, natural phenomenon, or abstract idea; a patent-eligible claim must include one or more substantive limitations that, in the words of the Supreme Court, add ‘significantly more’ to the basic principle, with the result that the claim covers significantly less. See Mayo 132 S. Ct. at 1294. Thus, broad claims do not necessarily raise § 101 preemption concerns, and seemingly narrower claims are not necessarily exempt. What matters is whether a claim threatens to subsume the full scope of a fundamental concept, and when those concerns arise, we must look for meaningful limitations that prevent the claim as a whole from covering the concept’s every practical application.” (Citing Mayo at 1302).

“Thus, claim drafting strategies that attempt to circumvent the basic exceptions to § 101 using, for example, highly stylized language, hollow field-of-use limitations, or the recitation of token post-solution activity should not be credited.”

“Finally, the [Supreme Court’s] cases urge a flexible, claim-by-claim approach to subject – matter eligibility that avoids rigid line drawing. Bright – line rules may be simple to apply, but they are often impractical and counterproductive when applied to § 101.”

“Accordingly, the Supreme Court has rejected calls for a categorical exclusion of so-called business method claims and has held that the formulaic ‘machine-or-transformation’ test cannot be the exclusive means for determining the patent eligibility of process claims. Bilski, 130 S. Ct. at 3227-29. What is needed is a flexible, pragmatic approach that can adapt and account for unanticipated technological advances while remaining true to the core principles underlying the fundamental exceptions to § 101.”

“A preliminary question in applying the exceptions to such claims is whether the claim raises § 101 abstractness concerns at all. Does the claim pose any risk of preempting an abstract idea? In most cases, the answer plainly will be no.”

“In short, one cannot meaningfully evaluate whether a claim preempts an abstract idea until the idea supposedly at risk of preemption has been unambiguously identified. Although not required, conducting a claim construction analysis before addressing § 101 may be especially helpful in this regard by facilitating a full understanding of what each claim entails.” (Citing Bancorp Servs., LLC v. Sun Life Assurance Co. of Can., 687 F.3d 1266, 1273 – 74 (Fed. Cir. 2012)).

The Section 101 Inventive Concept – Substantive Claim Limitations

“The requirement for substantive claim limitations beyond the mere recitation of a disembodied fundamental concept has ‘sometimes’ been referred to as an ‘inventive concept.’  See Mayo, 132 S. Ct. at 1294 (citing Flook, 437 U.S. at 594). We do not read the [Supreme] Court’s occasional use of that language in the § 101 context as imposing a requirement that such limitations must necessarily exhibit ‘inventiveness’ in the same sense as that term more commonly applies to two of the statutory requirements for patentability, i.e., novelty and nonobviousness. See 35 U.S.C. §§ 102, 103. The phrase ‘inventive concept’ originated with Flook, yet the Court began its discussion of § 101 in that case by stating that the question of patenteligible subject matter ‘does not involve the familiar issues of novelty and obviousness that routinely arise under §§ 102 and 103.’  437 U.S. at 588.”

“An ‘inventive concept’ in the§ 101 context refers to a genuine human contribution to the claimed subject matter.”  “In addition, that human contribution must represent more than a trivial appendix to the underlying abstract idea. The § 101 preemption analysis centers on the practical, real – world effects of the claim.  Limitations that represent a human contribution but are merely tangential, routine, well – understood, or conventional, or in practice fail to narrow the claim relative to the fundamental principle therein, cannot confer patent eligibility.”

“For example, the ‘administering’ and ‘determining’ steps in Mayo might have appeared to be concrete limitations representing true human contributions to the claimed methods … Yet the Court held that those steps failed to render the claims patent eligible because, as a practical matter, they were necessary to every practical use of what it found to be a natural law and therefore were not truly limiting. Mayo, 132 S. Ct. at 1298.”

“Also in Mayo, the [Supreme] Court instructed that the added steps, apart from the natural law itself, must amount to more than ‘well-understood, routine, conventional activity previously engaged in by researchers in the field.’ 132 S. Ct. at 1294. Similarly, token or trivial limitations, see Diehr, 450 U.S. at 191-92 (stating that ‘insignificant post-solution activity will not transform an unpatentable principle into a patentable process’), or vague limitations cast in ‘highly general language,’ Mayo, 132 S. Ct. at 1302, have failed to satisfy § 101. Finally, bare field-of-use limitations cannot rescue a claim from patent ineligibility where the claim as written still effectively preempts all uses of a fundamental concept within the stated field. Bilski, 130 S. Ct. at 3230 (discussing  Flook and Diehr). Whether a particular claim satisfies the § 101 standard will vary based on the balance of factors at play in each case, and the fact that there is no easy bright – line test simply emphasizes the need for the PTO and the courts to apply the flexible analysis above to the facts at hand.”

To recap, claim limitations which do not support Section 101 patent eligible subject matter are: (1) well-understood steps, routine or conventional steps which are used by researchers in the field; (2) token or trivial limitations; (3) insignificant post-solution activity; (4) vague limitations cast in highly general language; (5) “extravagant language to recite a basic function” (see “Alice Patents” section below); (6) generic computer functionality that lends speed or efficiency to the performance; and (7) bare field-of-use limitations.  These claim limitations effectively preempt all uses of a fundamental concept within the stated field.

Section 101 Inventive Concept Is Different Than Novelty and Nonobviousness

“Thus, the Supreme Court used the language ‘routine’ and ‘conventional’ in Mayo to indicate what qualities added to a natural law do not create patent-eligible subject matter. See Mayo, 132 S. Ct. at 1298. We do not therefore understand that language to be confused with novelty or nonobviousness analyses, which consider whether particular steps or physical components together constitute a new or nonobvious invention. Analyzing patent eligibility, in contrast, considers whether steps combined with a natural law or abstract idea are so insignificant, conventional, or routine as to yield a claim that effectively covers the natural law or abstract idea itself.”

Inventive Concept Is A Separate, Not A Threshold, Analysis And Issued Patents Are Presumed Valid

“Two other considerations are worth noting with respect to the § 101 analysis. First, some have argued that because § 101 is a ‘threshold test,’ Bilski, 130 S. Ct. at 3225, district courts must always consider subject-matter eligibility first among all possible bases for finding invalidity. That is not correct.”

“Second, it bears remembering that all issued patent claims receive a statutory presumption of validity. 35 U.S.C. § 282; Microsoft Corp. v. i4i Ltd. P’ship, 131 S. Ct. 2238 (2011).”

The Alice Patents in Suit

The patent owner Alice Corp. argued that the following claim limitations for “shadow accounts” made the computer method claims, the computer readable medium claims (so-called ‘Beauregard claims,’ named for In re Beauregard, 53 F.3d 1583 (Fed. Cir. 1995)) and the apparatus or computer system claims eligible patent subject matter.

Computer Method Claims

Claim 33.  A method of exchanging obligations as between parties including: (1) creating a shadow credit record and a shadow debit record for each stakeholder party and (2) at the end-of-day, the supervisory institution instructing ones of the exchange institutions to exchange credits or debits to the credit record and debit record of the respective parties in accordance with the adjustments of the said permitted transactions, the credits and debits being irrevocable, time invariant obligations placed on the exchange institutions.

“Briefly, the claimed process requires the supervisory institution to create shadow records for each party that mirror the parties’ real-world accounts held at their respective ‘exchange institutions.’ At the end of each day, the supervisory institution irrevocably instructs the exchange institutions to carry out the permitted transactions.”

The Court found that the shadow accounts were “a form of escrow.  CLS describes that concept as ‘fundamental and ancient,’ but the latter is not determinative of the question of abstractness.  But whether long in use or just recognized, abstract ideas remain abstract. The concept of reducing settlement risk by facilitating a trade through third-party intermediation is an abstract idea because it is a ‘disembodied’ concept, In re Alappat, 33 F.3d 1526, 1544 (Fed. Cir. 1994) (en banc).”

“First, the requirement for computer implementation could scarcely be introduced with less specificity; the claim lacks any express language to define the computer’s participation. In a claimed method comprising an abstract idea, generic computer automation of one or more steps evinces little human contribution. There is no specific or limiting recitation of essential, see SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1332 – 33 (Fed. Cir. 2010), or improved computer technology, see Research Corp. Techs., Inc. v. Microsoft Corp., 627 F.3d 859, 865, 868 – 69 (Fed. Cir. 2010), and no reason to view the computer limitation as anything but ‘insignificant postsolution activity’ relative to the abstract idea, see Fort Props., Inc. v. Am. Master Lease LLC, 671 F.3d 1317, 1323 – 24 (Fed. Cir. 2012). Furthermore, simply appending generic computer functionality to lend speed or efficiency to the performance of an otherwise abstract concept does not meaningfully limit claim scope for purposes of patent eligibility.”

“With the term ‘shadow record,’ the claim uses extravagant language to recite a basic function required of any financial intermediary in an escrow arrangement.”

“Finally, providing end-of-day instructions to the exchange institutions to reconcile the parties’ real – world accounts with the day’s accumulated adjustments to their shadow records is a similarly trivial limitation that does not distinguish the claimed method. According to the claim, each permitted transaction during the day prompts corresponding shadow record adjustments, which the
exchange institutions must honor as ‘irrevocable’ payment obligations. E.g., ‘479 patent col. 65 11. 36-50. Whether the instructions are issued in real time, every two hours, or at the end of every day, there is no indication in the record that the precise moment chosen to execute those payments makes any significant difference in the ultimate application of the abstract idea.”

Computer-Readable Medium Claims

“As with the method claims, two other judges of this court, in addition to those joining this [per curium] opinion, similarly conclude that the computer-readable medium claims are not patent eligible.”

Computer System Apparatus Claims

The Federal Circuit noted the disjointed opinions of the Court on this topic and stated: “Before addressing these claims in particular, we again note that our colleagues on the court, other than those joining this opinion, have agreed that, at least in this case, the method, medium, and system claims should be considered together for purposes of § 101. Three other judges on this court – for a total of eight – have so concluded.”

A truncated version of Claim 1 of the Alice ‘720 patent stated: “1. A data processing system to enable the exchange of an obligation between parties … a data storage unit having stored therein information about a shadow credit record and shadow debit record … a computer, coupled to said data storage unit, that is configured to (a) receive a transaction; (b) electronically adjust; (c) generate an instruction.”  The claim then closely followed the method steps.

“Indeed, Alice’s method and system claims use similar and often identical language to describe those actions. Compare id.  Other claims specify additional components, such as a ‘first party device’ and a ‘communications controller.’ See, e.g., ‘375 patent col. 66 11. 65 – 66.”  “As illustrated by the obvious parallels between the method and system claims now before us, it is often a straightforward exercise to translate a method claim into system form, and vice versa. That much has long been recognized. See In re Johnston, 502 F.2d 765, 773 (CCPA 1974).”

“The computer – based limitations recited in the system claims here cannot support any meaningful distinction from the computer-based limitations that failed to supply an ‘inventive concept’ to the related method claims.”

“They set forth the same steps for performing third-party intermediation and provide for computer implementation at an incrementally reduced, though still striking level of generality. Instead of wholly implied computer limitations, the system claims recite a handful of computer components in generic, functional terms that would encompass any device capable of performing the same ubiquitous calculation, storage, and connectivity functions required by the method claims.”

“Despite minor differences in terminology, e.g., first and third ‘independent’ accounts instead of ‘shadow’ records, the asserted method and system claims require performance of the same basic process.”

“For all practical purposes, every general purpose computer will include ‘a computer,’ ‘a data
storage unit,’ and ‘a communications controller’ that would be capable of performing the same generalized functions required of the claimed systems to carry out the otherwise abstract methods recited therein.”

“But that is not the question. The question we must consider is whether a patent claim that ostensibly describes such a system on its face represents something more than an abstract idea in legal substance. Claims to computers were, and still are, eligible for patent. No question should have arisen concerning the eligibility of claims to basic computer hardware under § 101 when such devices were first invented. But we are living and judging now (or at least as of the patents’ priority dates), and have before us not the patent eligibility of specific types of computers or computer components, but computers that have routinely been adapted by software consisting of abstract ideas, and claimed as such, to do all sorts of tasks that formerly were performed by humans. And the Supreme Court has told us that, while avoiding confusion between § 101 and §§ 102 and 103, merely adding existing computer technology to abstract ideas — mental steps — does not as a matter of substance convert an abstract idea into a machine.”

Commentary: In conclusion, patent practitioners and the courts continue to “seek [a] framework that will provide guidance and predictability for patent applicants and examiners, litigants, and the courts.”  CLS Bank v Alice Corp., Slip opn. P. 9.  Given the Court’s fractured positions, although this opinion gives practitioners additional guidelines, the Court’s stated goal of  predictability has not been achieved. The leap from “a form of escrow” (an abstract idea) to “shadow accounts” and end-of-day instructions for credits or debits which are “irrevocable, time invariant obligations placed on the exchange institutions” seems tenuous and not particularly predictable.  Also, critical comments regarding claim drafting strategies and the use of  highly stylized claim language ignores a patent practitioner’s obligation to draft patent claims as broad as possible to capture his or her client’s constitutional rights to reap the fruits of their invention.

DNA and Method Patents With Simple Steps – One Patentable, The Other Non-Patentable Abstract Idea

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The Federal Circuit Court of Appeals (the Court that hears all patent appeals) again waded into the murky waters of what is a non-patentable method (a simple abstract idea) and what is a patentable process, machine, article of manufacture, composition of matter, or any improvement thereof.  DNA, when chemically manipulated by a human, is patentable but the method of comparing or analyzing DNA sequences is an abstract idea which is not patentable under the Patent Act.  Ass’n for Molecular Pathology v. U.S. Patent and Trademark Ofc. and Myriad Genetics, Inc., Case No. 2010-1406 (Fed. Cir. Aug. 16, 2012) (available here).

Under the Patent Act, “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, subject to the conditions and requirements of this title.” 35 U.S.C. § 101.  The Court began by noting that the patent laws would be given wide scope. Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010); Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980); Promethens Labs Inc. v. Mayo Collaborative Servs., 628 F.3d 1947 (Fed Cir. 2010), rev’d, 132 S. Ct. 1289 (2012) and remanded.

Plaintiffs challenged under §101 Myriad’s composition claims directed to “isolated” DNA molecules, its method claims directed to “analyzing” or “comparing” DNA sequences, and its claim to a method for screening potential cancer therapeutics. Myriad argued that an isolated DNA molecule is patent eligible because it is, as claimed, “a nonnaturally occurring manufacture or composition of matter” with “a distinctive name, character, and use.” The Patent Office (USPTO) argued that DNA molecules engineered by man, including the claimed cDNAs,9 are patent-eligible compositions and have been for decades.

The Court stated that one distinction between nonpatentable products of nature and patentable human-made inventions for purposes of § 101 turns on a change in the claimed composition’s identity compared with what exists in nature.

The parties in Myriad did not dispute that Myriad’s claimed isolated DNAs “exist in a distinctive chemical form — as distinctive chemical molecules — from DNAs in the human body, i.e., native DNA.”  Per the Court, Myriad’s “isolated DNA, in contrast, is a free-standing portion of a larger, natural DNA molecule,,” the BRCAI gene, isolated BRCAI and BRCA2.  “Although isolated DNA is removed from its native cellular and chromosomal environment, it has also been manipulated chemically so as to produce a molecule that is markedly different from that which exists in the body.”

Claim 2 of Myriad’s ’282 patent is narrower than claim 1 and creates a new chemical entity which “is the work of human transformation, requiring skill, knowledge, and effort.” Slip opn. P. 52, citing Mayo, 132 S. Ct. at 1294.  “In this case, the PTO has issued patents relating to DNA molecules for almost thirty years.”   To dirive the point home, the Court stated: a “patent directed to isolated DNA molecules recite patent-eligible subject matter under § 101.”

Myriad’s method or process claims did fare as well as the isolated DNA claims.  “Claims to ‘comparing’ or ‘analyzing’ two gene sequences fall outside the scope of § 101 because they claim only abstract mental processes.”  Citing Benson, 409 U.S. at 67. “This claim thus recites nothing more than the abstract mental steps necessary to compare two different nucleotide sequences: one looks at the first position in a first sequence; determines the nucleotide sequence at that first position; looks at the first position in a second sequence; determines the nucleotide sequence at that first position; determines if the nucleotide at the first position in the first sequence and the first position in the second sequence are the same or different, wherein the latter indicates an alteration; and repeats the process for the next position.”

Finally, the Court turned its attention to Myraid’s “screening” claims, holding them patentable subject matter under the Patent Act.  “Lastly, we turn to claim 20 of the ’282 patent, directed to a method for screening potential cancer therapeutics via changes in cell growth rates of transformed cells… Claim 20 recites a method that comprises the steps of (1) growing host cells transformed with an altered BRCA1 gene in the presence or absence of a potential cancer therapeutic, (2) determining the growth rate of the host cells with or without the potential therapeutic, and (3) comparing the growth rate of the host cells.”

“By definition, however, performing operations, even known types of steps, on, or to create, novel, i.e., transformed subject matter is the stuff of which most process or method invention consists …. Furthermore, the claim does not cover all cells, all compounds, or all methods of determining the therapeutic effect of a compound. Rather, it is tied to specific host cells transformed with specific genes and grown in the presence or absence of a specific type of therapeutic. Accordingly, we hold that claim 20 of the ’282 patent recites patent-eligible subject matter under § 101.”

Computer Patent Claims for Life Insurance Product Declared Invalid – Not Patentable Subject Matter

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The Federal Circuit Court of Appeals has invalidated computer method patent claims, computer system claims and computer readable medium claims for a life insurance product. Bancorp Services, LLC v. SunLife Assurance Co. of Canada (U.S.), Case No. 2011-1467 (Fed Cir. July 26, 2012) (available here). Bancorp, the patentee, sued defendant Sun. The court said the claims were nothing more than abstract mathematical algorithms executed by a computer. Although complex, the algorithms could be done manually without the assistance of a computer.

The computer was not integral to the process as compared to a GPS position detector system, a computerized operation for opening a rubber mold, or a method for transforming half tone gray scale pixels for a better computer monitor display. Bancorp’s patent specifications disclosed systems and methods for administering and tracking the value of life insurance. The value of a separate account policy fluctuated with the market value of the underlying investment assets. The asserted patents disclosed a specific formula for determining the values required to manage a stable value protected life insurance policy. For example, the specification disclosed creating and initializing a fund by performing particular “calculations and comparisons” to determine an “initial unit value of the policy.” One of the patent claims is reproduced at the end of this commentary. The district court concluded that there was no meaningful distinction between the asserted “process,” “system,” and “media” claims, and that each would be analyzed as a process claim.

“To salvage an otherwise patent-ineligible process, a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not. See SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1333 (Fed. Cir. 2010) (‘In order for the addition of a machine to impose a meaningful limit on the scope of a claim, it must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly, i.e., through the utilization of a computer for performing calculations’).” Slip opn. p. 19-20.

The computer required by some of Bancorp’s claims was employed only for the computer’s most basic function, the performance of repetitive calculations, and as such the recitation of a computer did not impose meaningful limits on the scope of those claims. Bancorp sought to analogize its case to SiRF, contending that a computer “plays a significant part” in its claims because they require “precise and repetitive calculation.” The Court said that misses the point. It is the management of the life insurance policy that is “integral to each of [Bancorp’s] claims at issue,” not the computer machinery that may be used to accomplish it. See SiRF, 601 F.3d at 1332.

Bancorp also argued that its computer system was more akin to the one in Research Corp. Techs., Inc. v. Microsoft Corp., 627 F.3d 859, 867 (Fed. Cir. 2010). The Court stated that Research Corp. was different from the present case in two critical respects. First, the claimed processes in Research Corp. plainly represented improvements to computer technologies in the marketplace. For example, as compared to the prior art, the “inventive mask produce[d] higher quality halftone images while using less processor power and memory space.” Id. at 865. No such technological advance was evident in the present invention. Rather, the claims merely employ computers to track, reconcile, and administer a life insurance policy with a stable value component—i.e., the computer simply performs more efficiently what could otherwise be accomplished manually. Bancorp, 771 F. Supp. 2d at 1065.

Second, the method in Research Corp., which required the manipulation of computer data structures (the pixels of a digital image and the mask) and the output of a modified computer data structure (the halftoned image), was dependent upon the computer components required to perform it.

Procedurally, Bancorp and Sun Life jointly stipulated to dismiss their case due to collateral estoppel arising from the district court’s invalidity ruling in Hartford. Bancorp’s’792 patent was the subject of two prior appeals to the Court. See Metro. Life Ins. Co. v. Bancorp Servs., L.L.C., 527 F.3d 1330 (Fed. Cir. 2008) (vacating summary judgment of noninfringement); Bancorp Servs., L.L.C. v. Hartford Life Ins. Co., 359 F.3d 1367 (Fed. Cir. 2004) (reversing summary judgment of invalidity for indefiniteness). The parties agreed that if the district court’s Hartford ruling was reversed on appeal then their case would be reinstated. The district court then entered a judgment of conditional dismissal.

The Federal Circuit Court found no error in the district court’s failure to construe the patent claims prior to entering its decision. In Ultramercial, LLC v. Hulu, LLC, the Court stated that “[t]his court has never set forth a bright line rule requiring district courts to construe claims before determining subject matter eligibility.” The Court did state that it is ordinarily desirable—and often necessary— to resolve claim construction disputes prior to a § 101 analysis, for the determination of patent eligibility requires a full understanding of the basic character of the claimed subject matter.” 657 F.3d 1323, 1325 (Fed. Cir. 2011), vacated sub nom. Wild- Tangent, Inc. v. Ultramercial, LLC, No. 11-962, 2012 WL 369157 (U.S. May 21, 2012)(no bright line requiring construing claims before section 101 analysis).

However in this appeal, the Court concluded that the asserted system claims required “one or more computers,” as Bancorp asserted and as Sun conceded. The plain language of the system claims required particular computing devices, such as a “generator,” a “calculator,” and “digital storage.” Regarding the computer-readable medium claims, the specification explained that the term refers generally to a “high density removable storage means,” such as a “compact disc.” The district court’s failure to construe the claims, did not preclude the Court from making that legal determination on appeal. See Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1455 (Fed. Cir. 1998) (en banc) (concluding that claim construction is a pure issue of law). Just as a district court may construe the claims in a way that neither party advocates, Exxon Chemical Patents, Inc. v. Lubrizol Corp., 64 F.3d 1553, 1555 (Fed. Cir. 1995) (“[T]he trial judge has an independent obligation to determine the meaning of the claims, notwithstanding the views asserted by the adversary parties.”), the appellate court may depart from the district court’s decision and adopt a new construction on appeal, Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1323–24 (Fed. Cir. 2008) (adopting “a new claim construction on appeal.”

As for the literal fact that the computer system claims are facially different than the computer method claims, the Court held that the district court correctly treated the asserted system and computer readable medium claims as being no different from the asserted method claims for patent eligibility purposes. Under Cybersource and CLS, a machine, system, medium, or the like may in some cases be equivalent to an abstract mental process for purposes of patent ineligibility. In CyberSource Corp. v. Retail Decisions, Inc. the Court did not just look to the type of claim but also “to the underlying invention for patent-eligibility purposes.” 654 F.3d 1366, 1374 (Fed. Cir. 2011). In CLS Bank International v. Alice Corp., the Court held that the format of the various method, system, and media claims asserted in that case “d[id] not change the patent eligibility analysis under § 101.” No. 2011-1301, 2012 WL 2708400, at *10 (Fed. Cir. July 9, 2012).

Bancorp owns the ’792 and ’037 patents, both entitled “System for Managing a Stable Value Protected Investment Plan.” The patents share a specification and the priority date of September 1996. The ’792 patent has been the subject of two prior appeals to this court. See Metro. Life Ins. Co. v. Bancorp Servs., L.L.C., 527 F.3d 1330 (Fed. Cir. 2008) (vacating summary judgment of noninfringement); Bancorp Servs., L.L.C. v. Hartford Life Ins. Co., 359 F.3d 1367 (Fed. Cir. 2004) (reversing summary judgment of invalidity for indefiniteness). An example of the claim follows.

“9.A method for managing a life insurance policy on behalf of a policy holder, the method comprising the steps of: [a] generating a life insurance policy including a stable value protected investment with an initial value based on a value of underlying securities; [b] calculating fee units for members of a management group which manage the life insurance policy; [c] calculating surrender value protected investment credits for the life insurance policy; [d] determining an investment value and a value of the underlying securities for the current day; [e] calculating a policy value and a policy unit value for the current day; [f] storing the policy unit value for the current day; and [g] one of the steps of: removing the fee units for members of the management group which manage the life insurance policy, and accumulating fee units on behalf of the management group.” USPN ‘792, clm 9 (alpha designators added).

Commentary: The ruling in the Bancorp case will place many financial patents at risk. The courts are carefully scrutinizing all computer patent claims and the boundaries of patentable subject matter are being re-drawn with considerable speed. See Dealertrack, Inc. v. Huber, Case No. 2009-1566 (Fed. Cir. Jan. 20, 2012).

Computer Trading Platform with Trusted Third Party is Valid Patentable Subject

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The Federal Circuit Court of Appeals has held that Alice’s patents that cover a computerized trading platform for exchanging obligations wherein a trusted third party settles obligations between a first and second party so as to eliminate “settlement risk,” define patentable subject matter under 35 U.S.C. § 101.  CLS Bank International v. Alice Corp. Pty. Ltd, Case No. 2011-1301 (Fed. Cir. July 9, 2012) (available  here).  The dissenting opinion by Judge Prost objected stating that the majority’s opinion uses a subjective “manifestly evident” standard which is nothing more than an escape hatch rather than a yardstick.  The majority concluded that the system, method, and media claims at issue are not drawn to mere “abstract ideas” but rather are directed to practical applications of invention falling within the categories of patent eligible subject matter defined by 35 U.S.C. § 101.

“The asserted claims appear to cover the practical application of a business concept in a specific way, which requires computer implemented steps of exchanging obligations maintained at an exchange institution by creating electronically maintained shadow credit and shadow debit records, and particularly recite that such shadow credit and debit records be held independently of the exchange institution by a supervisory institution; that start-of-the-day balances be obtained from the exchange institution; that adjustments be made to the credit records based on only certain specified allowed transactions under the ‘adjusting’ limitation; that such adjustments be made in chronological order; that at the end of the day, instructions be given to the exchange institution to reflect the adjustments made on the basis of the permitted transactions; and that such adjustments affect irrevocable, time invariant obligations placed on the exchange institution.”  Slip opn. p. 26 (“P. 26″).

CLS, who challenged Alice’s patent, agreed for purposes of the summary judgement, that all of Alice’s asserted claims require a computer system. See Phillips v. AWH Corp., 415 F.3d 1303, 1315-16 (Fed. Cir. 2005) (en banc).  Some claims in the ‘479 Patent did not contain the “electronic adjustment” limitation, but they did  contain the same “shadow credit record” and “shadow debit record” limitations as the ‘510 Patent claims. The specification of the ‘479 Patent, like the ‘510 Patent, supported an understanding that the shadow debit/credit record limitations require computer implementation.  The specification explained that the shadow debit/credit records are electronically stored in a system called “INVENTICO.”

The district court analyzed the method claims under the machine-or-transformation (MOT) test and interpreted the shadow credit and debit records require electronic implementation and a computer.  However, the district court found on summary judgment that the claims were drawn to mere abstract ideas.  The Appeals Court ruled otherwise, reversing the district court, but spilled much link on the issue of abstract ideas and preemption of such ideas.

“Notwithstanding these well intentioned efforts and the great volume of pages in the Federal Reporters treating the abstract ideas exception, the dividing line between inventions that are directed to patent ineligible abstract ideas and those that are not remains elusive. ‘’Put simply, the problem is that no one understands what makes an idea abstract.’  Mark A. Lemley et al., Life After Bilski, 63 Stan. L. Rev. 1315, 1316 (2011).” P. 14.  See also Donald S. Chisum, Weeds and Seeds in the Supreme Court’s Business Method Patent Decision: New Directions for Regulating Patent Scope, 15 Lewis & Clark L. Rev. 11, 14 (2011) (“Because of the vagueness of the concepts of an ‘idea’ and ‘abstract,’ … the Section 101 abstract idea preemption inquiry can lead to subjectively-derived, arbitrary and unpredictable results. This uncertainty does substantial harm to the effective operation of the patent system.”).

“Several decisions have looked to the notion of ‘preemption’ to further elucidate the ‘abstract idea’ exception. In Bilski, the Supreme Court explained that ‘[a]llowing petitioners to patent risk hedging would preempt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea.’ Bilski v. Kappos, 130 S.Ct. 3218, 3231.  Previously, in O’Reilly v. Morse, 56 U.S. 62 (1853), the Supreme Court held that a claim to electromagnetism was not eligible for patent protection because the patentee ‘claim[ed] the exclusive right to every improvement where the motive power is the electric or galvanic current, and the result is the marking or printing intelligible characters, signs, or letters at a distance.’ Id. at 112-13 (emphases added). The Morse Court reasoned that the claim would effectively ‘shut[] the door against inventions of other persons . . . in the properties and powers of electro-magnetism” because “it matters not by what process or machinery the result is accomplished.’ Id. at 113 (emphasis added). Again, in Gottshalk v. Benson, 409 U.S. 64 (1972), the Supreme Court emphasized the concept of ‘preemption,’ holding that a claim directed to a mathematical formula with ‘no substantial practical application except in connection with a digital computer’ was directed to an unpatentable abstract idea because ‘’the patent would wholly preempt the mathematical formula and in practical effect would be a patent on an algorithm itself.’ Id. at 71-72. In Parker v. Flook, 437 U.S. 584 (1978), the Court again emphasized the importance of claims not ‘preempting’ the ‘basic tools of scientific and technological work,’ and further held that mere field of use limitations-there, to the oil refining and petrochemical industries-or the addition of ‘’post-solution’ activity there, adjusting an ‘alarm limit’ according to a claimed mathematical calculation–could not ‘transform an unpatentable principle into a patentable process.’ Id. at 589.”  P. 14-15.

“Thus, the essential concern is not preemption, per se, but the extent to which preemption results in the foreclosure of innovation. Claims that are directed to no more than a fundamental truth and foreclose, rather than foster, future innovation are not directed to patent eligible subject matter under § 101. No one can claim the exclusive right to all future inventions. Morse, 56 U.S. at 112-13; Benson, 409 U.S. at 68.”  P. 16-17.

“[A] claim is drawn to a specific way of doing something with a computer is likely to be patent eligible whereas a claim to nothing more than the idea of doing that thing on a computer may not.  But even with that appreciation, great uncertainty remains, and the core of that uncertainty is the meaning of the ‘abstract idea’ exception.  The claim limitations can be characterized as being integral to the method, as ‘play[ing] a significant part in permitting the method to be performed,’ and as not being token post solution activity. It is clear, moreover, that the limitations requiring specific ‘shadow’ records leave broad room for other methods of using intermediaries to help consummate exchanges, whether with the aid of a computer or otherwise, and, thus, do not appear to preempt much in the way of innovation.”  P. 27.

CLS Bank argued that all of Alice’s claims are directed to the unpatentable concept of ‘exchanging an obligation’ between parties (i.e., effectuating a legal obligation) after an intermediary ensures that there is ‘adequate value’ in independent accounts maintained for the parties to allow the exchange to go forward-in effect, a two-sided escrow arrangement.  See SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1333 (Fed. Cir. 2010); Gottshalk v. Benson, 409 U.S. 64 (1972), and Parker v. Flook, 437 U.S. 584 (1978)’ CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011); and Research Corp. v. Microsoft Corp., 627 F.3d 859, 868-69 (Fed. Cir. 2010).

The Dissent

The dissent took a very high level view of Alice’s invention.  “The basic idea behind the claimed invention is the use of an intermediary in a financial transaction. At its most basic form, in a transaction between parties ‘A’ and ‘B,’ a middle-man collects funds from ‘A’ but will not pass them to ‘B’ until ‘B’ has also performed.”  Dissent opn. p. 4.  The claims chart in the dissent’s opinion arguably greatly over-simplifies the claimed invention.

“The only hint appears where the majority points to the phrase ‘shadow records,’ as if that alone transmutes the abstract idea of the claims into patentable subject matter. Maj. Op. 27. But the claims use ‘shadow’ to simply define an account that is used to track a party’s payments (the account is a shadow of the party’s performance). That is not a limiting feature at all; any financial intermediation would in one way or another use a ‘shadow’ account.” Dissent p. 6; citing Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1331-35 (Fed. Cir. 2012).

Commentary: This case highlights the difficulties in applying the machine or transformation (MOT) test and the abstract idea preemption test to computer methods and systems.  The dissent took a very broad, high level view of the patentee’s invention as noted by the highly truncated, simplified claim chart in its opinion.  The majority drilled down to the claim language and the specification found that the steps of the asserted claims appear to cover the practical application of a business concept in a specific way.  The computer implemented steps include: exchanging obligations, with an exchange institution; maintaining shadow credit and shadow debit records independently of the exchange institution; obtaining start-of-the-day balances; adjusting credit records based on specified allowed transactions; adjusting balances, in chronological order, at the end of the day; and providing instructions to the exchange institution to reflect the adjustments; wherein such adjustments affect irrevocable, time invariant obligations.  The claim limitations can be characterized as being integral to the computer, as “play[ing] a significant part in permitting the method to be performed,” and as not being token post solution activity. The court noted that the limitations requiring specific “shadow records” leave broad room for other methods of using intermediaries to help consummate exchanges, whether with the aid of a computer or otherwise, and, thus, do not appear to preempt much in the way of innovation. It is uncertain if the Supreme Court will review this Federal Circuit decision.

Computer-Aided Clearinghouse Is Not Patent Eligible Subject Matter

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The Court of Appeals for the Federal Circuit (“Federal Circuit”) has held that a computer aided method of managing a credit application, by receiving data, sending credit data and forwarding funding decision (with certain alternative steps of selectively sending portions data) is not patent eligible subject matter under 35 U.S.C. § 101. Dealertrack, Inc. v. Huber, Case No. 2009-1566 (Fed. Cir. Jan. 20, 2012) (available here).

One view of this case involves the problem associated with the use of alternative “OR” claim language to define inventive claim elements D1, D2, D3 or D4. See the claim set forth below. The truncated “nominal” claim defining the invention with bracketed elements A, B, C. D and D1 is reproduced below.

 “A computer aided method of managing a credit application, the method comprising the steps of: [A] receiving credit application data from a remote application entry and display device; [B] selectively forwarding the credit application data to remote funding source terminal devices; [C] forwarding funding decision data from at least one of the remote funding source terminal devices to the remote application entry and display device; [D] wherein the selectively forwarding the credit application data step further comprises: [D1] sending at least a portion of a credit application to more than one of said remote funding sources substantially at the same time.”

Dealertrack’s claimed inventive process in its simplest form includes three steps: receiving data from one source (step A), selectively forwarding the data (step B, performed more specifically in step D1), and forwarding reply data to the first source (step C). “The claim ‘explain[s] the basic concept’ of processing information through a clearinghouse, just as claim 1 in Bilski II ‘explain[ed] the basic concept of hedging.’ The steps that constitute the method here do not ‘impose meaningful limits on the claim’s scope.’ Neither Dealertrack nor any other entity is entitled to wholly preempt the clearinghouse concept.” Slip Opn. p. 35 (quoting In re Bilski, 545 F.3d 943, 961-62 (Fed. Cir. 2008) (en banc) (“Bilski I”); Bilski v. Kappos, 130 S. Ct. 3218, 3231 (2010) (Bilski II”); Gottschalk v. Benson, 409 U.S. 63, 71-72 (1972)). “The claims were silent as to how a computer aids the method, the extent to which a computer aids the method, or the significance of a computer to the performance of the method.” p. 35.

“The notion of using a clearinghouse generally and using a clearinghouse specifically to apply for car loans, like the relationship between hedging and hedging in the energy market in Bilski II, is of no consequence without more. See Diehr, 450 U.S. at 191 (noting that the principle that a mathematical formula ‘is not accorded the protection of our patent laws . . . cannot be circumvented by attempting to limit the use of the formula to a particular technological environment’ (emphasis added)).” p. 37 (citing Diamond v. Diehr, 450 U.S. 175, 191 (1981).

In conclusion, receiving data, sending credit application data and forwarding funding decision data and simultaneously sending the credit data to several funding sources is too abstract and not a “machine” under the “machine or transformation” (MOT) test. Also, no transformation of data was present. Compare this case to Ultramercial LLC v. Hulu LLC, Case No. 2010-1544 (Fed. Cir. Sept. 15, 2011) wherein the selective access, and sometimes free access, ad display, tracking transactions and making payment was found to be patent eligible subject matter.

Prometheus: Laws of Nature Plus Conventional Steps Not Patentable

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The Supreme Court extended the prohibition that laws of nature, combined with “well-understand, routine [and] conventional” method steps are not patent eligible subject matter under 35 U.S.C. Sec. 101. Mayo Collaborative Serv. v. Prometheus Labs., Inc., Case No. 10-1150 (U.S., March 20, 2012) (available here). The Patent Statute provides: “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, subject to the conditions and requirements of this title.” 35 U. S. C. §101.

The Supreme Court has held that this provision contains an important implicit exceptions on patentable subject matter. “[L]aws of nature, natural phenomena, and abstract ideas” are not patentable. Prometheus Opn. 1; citing Diamond v. Diehr, 450 U. S. 175, 185 (1981); see also Bilski v. Kappos, 561 U. S. ___, ___ (2010) (slip op., at 5); Diamond v. Chakrabarty, 447 U. S. 303, 309 (1980); Le Roy v. Tatham, 14 How. 156, 175 (1853); O’Reilly v. Morse, 15 How. 62, 112–120 (1854).

“Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.” p. 2; Gottschalk v. Benson, 409 U. S. 63, 67 (1972). The exclusion of laws of nature was extended in Parker v. Flook, 437 U.S. 584, 590 (1978) (adjusting alarm limits in catalytic conversion of hydro carbons not patentable subject mater) and Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (mathematical process for converting binary-coded decimal numerals into pure binary numbers). In Bilski, the Court considered claims covering a process for hedging risks of price changes by, for example, contracting to purchase commodities from sellers at a fixed price, reflecting the desire of sellers to hedge against a drop in prices, while selling commodities to consumers at a fixed price, reflecting the desire of consumers to hedge against a price increase. p. 5; Bilski v. Kappos, 561 U.S. – (2010). This hedging risk method was also not patentable subject matter.

Is “Inventive Concept” a New Requirement For Process Patents?

The Court in Prometheus stated that Flook and Benson “insist[ed] that a process that focuses upon the use of a natural law also contain other elements or a combination of elements, sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself.” p. 3, citing O’Reilly v. Morse, 15 How. 62, 112-120 (1854)(Morse’s telegraph case).

“In particular, the steps in the claimed processes (apart from the natural laws themselves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field.” P. 4. “Claim 1, for example, states that if the levels of 6–TG in the blood (of a patient who has taken a dose of a thiopurine drug) exceed about 400 pmol per 8×108 red blood cells, then the administered dose is likely to produce toxic side effects.” P. 8.

Laws of Nature: Process Plus What

“If a law of nature is not patentable, then neither is a process reciting a law of nature, unless that process has additional features that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself. A patent, for example, could not simply recite a law of nature and then add the instruction ‘apply the law.’ P. 8-9.

In the Promotheus case, first, the “administering” step refered to the relevant audience, namely doctors who treat patients with certain diseases with thiopurine drugs. Second, the “wherein” clauses “simply” tell a doctor about the relevant natural laws, at most adding a suggestion that he should take those laws into account when treating his patient. Third, the “determining” step tells the doctor to determine the level of the relevant metabolites in the blood, through whatever process the doctor or the laboratory wishes to use. Fourth, to consider the three steps as an ordered combination “adds nothing” to the laws of nature that is not already present when the steps are considered separately.

“Thus, this step tells doctors to engage in well-understood, routine, conventional activity previously engaged in by scientists who work in the field. Purely ‘conventional or obvious’ ‘[pre]-solution activity’ is normally not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law.” P. 10.

Like Flook, the instructions “add nothing specific to the laws of nature other than what is well-understood, routine, conventional activity, previously engaged in by those in the field. And since they are steps that must be taken in order to apply the laws in question, the effect is simply to tell doctors to apply the law somehow when treating their patients.” “The ‘determining’ step too is set forth in highly general language covering all processes that make use of the correlations after measuring metabolites, including later discovered processes that measure metabolite levels in new ways.” P. 18.

In a cautionary statement, the Court stated “We need not, and do not, now decide whether were the steps at issue here less conventional, these features of the claims would prove sufficient to invalidate them. For here, as we have said, the steps add nothing of significance to the natural laws themselves.” P. 18.

The Supreme Court confirmed that the Bilski, machine or transformation (MOT) test for patentable subject matter, is a useful clue, but stated the MOT test does not trump the law of nature exclusion. P. 19. Also, the Court indicated that the law of nature exclusion under § 101 is independent of the novelty requirements of § 102, non-obvious requirements of § 103 and the requirement to clearly and exactly describe the invention under § 112.

The Claim

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 tincrease 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. See U.S.P.N. 6,355,623.

In conclusion, with respect to method or process claims, the transformation of blood chemistry coupled with only a “determining” step, is not patentable statutory subject matter under § 101. Such “chemical transformation” with a “determining step” is now held to fall within the “conventional post solution” category as does issuing an alarm (Flook) or printing or displaying a result. These are “well understood, routine, conventional activity, previously engaged in by those in the field.” P. 13. Further, the sequence of the steps was not unique.

Isolated DNA BRCA Claims Patentable; Comparing DNA Not Patentable; Method of Screening Cancer Patients Patentable

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In the widely contested and controversial field of patenting DNA testing for BRCA breast cancer, the Court of Appeals for the Federal Circuit has held that (a) isolated DNA molecules falls within patentable subject matter under Section 101 because these compositions are created by human intervention which has given the claimed composition “markedly different” or “distinctive” characteristics; (b) the method claims of comparing or analyzing DNA sequences are directed to patent-ineligible, abstract mental processes and fail the machine-or-transformation test; and (c) Myriad’s method claims directed to a method for screening potential cancer therapeutics via changes in cell growth rates define patentable 101 subject matter. Association for Molecular Pathology v. Myriad Genetics, Inc., Case No. 2010-1406 (Fed. Cir. July 29, 2011)(available here).

Myriad appealed from the district court’s decision granting summary judgment that all of the challenged claims are drawn to nonpatentable subject matter under 35 U.S.C. § 101. Assoc. for Molecular Pathology v. U.S. Patent & Trademark Office, 702 F. Supp. 2d 181 (S.D.N.Y. 2010). The Federal Circuit affirmed in part and reversed in part.

Samples of Myriad’s claims are reproduced at the end of this article.

The District Court held that the composition claims fall within the judicially created “products of nature” exception to § 101 because such isolated DNAs are not “markedly different” from native DNAs. (quoting Diamond v. Chakrabarty, 447 U.S. 303 (1980)). As for the method claims, the district court held them patent ineligible under the machine- or-transformation test. (citing In re Bilski, 545 F.3d 943 (Fed. Cir. 2008), affirmed on other grounds by Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010)). The lower court held that claims covered “analyzing” or “comparing” DNA sequences by any method are mental processes independent of any physical transformations and are invalid as not being patentable subject matter under Section 101.

Under the Patent Act, “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, subject to the conditions and requirements of this title.” 35 U.S.C.

§ 101. “The Supreme Court has consistently construed § 101 broadly, explaining that ‘[i]n choosing such expansive terms . . . modified by the comprehensive ‘any,’ Congress plainly contemplated that the patent laws would be given wide scope.’” Myriad, at pg. 36 (citing Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010) and quoting Chakrabarty, 447 U.S. at 308)).

“The Supreme Court, however, has also consistently held that § 101, although broad, is not unlimited. Id. The Court’s precedents provide three judicially created exceptions to § 101’s broad patent-eligibility principles: ‘laws of nature, physical phenomena, and abstract ideas.’ Id. (quoting Chakrabarty, 447 U.S. at 309). The Court has also referred to these exceptions as precluding the patenting of phenomena of nature, mental processes, Gottschalk v. Benson, 409 U.S. 63, 67 (1972), and products of nature, Chakrabarty, 447 U.S. at 313 (‘[T]he relevant distinction for purposes of § 101 is . . . between products of nature . . . and human-made inventions.’).” Myriad at pg. 36.

Composition Claims: Isolated DNA Molecules – Held Patentable

The Government argued that these claims were not patentable by describing a “magic microscope” which could focus in on the claimed DNA molecule as it exists in the human body. “The government thus argues that because such a microscope could focus in on the claimed isolated BRCA1 or BRCA2 sequences as they exist in the human body, the claims covering those sequences are not patent eligible.” Myraid ay pg. 39. The Federal Circuit disagreed with this position.

In Chakrabarty, the Supreme Court held that the bacteria qualified as patentable subject matter because the “claim is not to a hitherto unknown natural phenomenon, but to a nonnaturally occurring manufacture or composition of matter — a product of human ingenuity ‘having a distinctive name, character [and] use.’” Myraid at pg. 40 (quoting Chakrabarty and Hartranft v. Wiegmann, 121 U.S. 609, 615 (1887)).

“The distinction, therefore, between a product of nature and a human-made invention for purposes of § 101 turns on a change in the claimed composition’s identity compared with what exists in nature. Specifically, the Supreme Court has drawn a line between compositions that, even if combined or altered in a manner not found in nature, have similar characteristics as in nature, and compositions that human intervention has given ‘markedly different,’ or ‘distinctive,’ characteristics.” Myriad at pg. 41. The Federal Circuit found that the DNA composition claims had markedly different or distinctive, characteristics and, as such, the claims were patentable subject matter under Section 101.

Method Claims “Comparing” or “Analyzing” Sequences – Not Patentable

The Federal Circuit held that all but one of Myriad’s method claims are directed to patent-ineligible, abstract mental processes, and fail the machine-or-transformation test. These claims comparing or analyzing two gene sequences and fall outside the scope of § 101 because they claim only abstract mental processes. See Benson, 409 U.S. at 67 (“Phenomena of nature, . . . mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.”). “The claims recite, for example, a ‘method for screening a tumor sample,’ by ‘comparing’ a first BRCA1 sequence from a tumor sample and a second BRCA1 sequence from a non-tumor sample, wherein a difference in sequence indicates an alteration in the tumor sample. ’001 patent claim 1. This claim thus recites nothing more than the abstract mental steps necessary to compare two different nucleotide sequences.” Myriad at pg. 50.

Method of Screening Potential Cancer Therapeutics – Patentable

Myriad’s method claims directed to a method for screening potential cancer therapeutics via changes in cell growth rates clearly identify a transformative event. As such, the claims were held patentable. See ’282 patent claim 20.

“Starting with the machine-or-transformation test, we conclude that the claim includes transformative steps, an ‘important clue’ that it is drawn to a patent-eligible process. Bilski, 130 S. Ct. at 3227. Specifically, the claim recites a method that comprises the steps of (1) ‘growing’ host cells transformed with an altered BRCA1 gene in the presence or absence of a potential cancer therapeutic, (2) ‘determining’ the growth rate of the host cells with or without the potential therapeutic, and (3) ‘comparing’ the growth rate of the host cells. The claim thus includes more than the abstract mental step of looking at two numbers and ‘comparing’ two host cells’ growth rates. The claim includes the steps of ‘growing’ transformed cells in the presence or absence of a potential cancer therapeutic, an inherently transformative step involving the manipulation of the cells and their growth medium.” Myraid at pg. 53.

Samples of Myriad Claims

The challenged composition claims cover two “isolated” human genes, BRCA1 and BRCA2 (collectively, “BRCA”), and certain alterations, or mutations, in these genes associated with a predisposition to breast and ovarian cancers. Representative composition claims include claims 1, 2, and 5 of the ’282 patent follow.

Composition Claim 1. An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2. Composition Claim 2. The isolated DNA of claim 1, wherein said DNA has the nucleotide sequence set forth in SEQ ID NO:1. Composition Claim 5. An isolated DNA having at least 15 nucleotides of the DNA of claim 1.

All but one of the challenged method claims cover methods of “analyzing” or “comparing” a patient’s BRCA sequence with the normal, or wild-type, sequence to identify the presence of cancer-predisposing mutations. A representative method claim, claim 1 of the ’999, follow.

Claim 1. A method for detecting a germline alteration in a BRCA1 gene, said alteration selected from the group consisting of the alterations set forth in Tables 12A, 14, 18 or 19 in a human which comprises analyzing a sequence of a BRCA1 gene or BRCA1 RNA from a human sample or analyzing a sequence of BRCA1 cDNA made from mRNA from said human sample with the proviso that said germline alteration is not a deletion of 4 nucleotides corresponding to base numbers 4184-4187 of SEQ ID NO:1.

The final set of challenged method claims are directed to a method of screening potential cancer therapeutics. Specifically, claim 20 of the ’282 patent follows.

Claim 20. A method for screening potential cancer therapeutics which comprises: growing a transformed eukaryotic host cell containing an altered BRCA1 gene causing cancer in the presence of a compound suspected of being a cancer therapeutic, growing said transformed eukaryotic host cell in the absence of said compound, determining the rate of growth of said host cell in the presence of said compound and the rate of growth of said host cell in the absence of said compound and comparing the growth rate of said host cells, wherein a slower rate of growth of said host cell in the presence of said compound is indicative of a cancer therapeutic.

Computer Methods and Media Claims Held Not Patentable Subject Matter Under Section 101

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The Court of Appeals for the Federal Circuit has held that patent method claims, reciting steps that can be carried out by a human (mental steps), and corresponding computer readable medium claims (arguably an article of manufacture) are not valid and not within the statutory subject matter for patents under 35 U.S.C. §101. See Cybersource Corp. v. Retail Decisions Inc., Fed. Cir. No. 2009-1358 (Fed. Cir. August 16, 2011) (available here).

CyberSource sued Retail Decisions, Inc. (“Retail Decisions”) alleging infringement of the ‘154 patent. Retail Decisions sought reexamination of the ‘154 patent before the U.S. Patent and Trademark Office (“PTO”). After the reexam, the district court resumed proceedings with amended claims. Two claims were at issue. Claim 3 recites a process for verifying the validity of credit card transactions over the Internet. Claim 2 recites a computer readable medium containing program instructions for executing the same process.

The ‘154 patent solves the problem of “who is using the credit card” ( a validation issue) by using Internet address information (IP addresses, MAC addresses, e-mail addresses, etc.) to determine whether an Internet address relating to a particular transaction “is consistent with other Internet addresses [that have been] used in transactions utilizing [the same] credit card.” See ‘154 Patent, col. 3 ll. 15-16 (available here).

Claim 3, as amended during reexamination, reads as follows. 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.”

Claim 2 reads: “A computer readable medium containing program instructions for detecting fraud in a credit card transaction between a consumer and a merchant over the Internet, wherein execution of the program instructions by one or more processors of a computer system causes the one or more processors to carry out the steps of: [1] obtaining credit card information relating to the transactions from the consumer; and [2] verifying the credit card information based upon values of plurality of parameters, in combination with information that identifies the consumer, and that may provide an indication whether the credit card transaction is fraudulent, [3] wherein each value among the plurality of parameters is weighted in the verifying step according to an importance, as determined by the merchant, of that value to the credit card transaction, so as to provide the merchant with a quantifiable indication of whether the credit card transaction is fraudulent, [4] wherein execution of the program instructions by one or more processors of a computer system causes that one or more processors to carry out the further 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.”

The Patent Statute identifies patent-eligible subject matter categories in §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, subject to the conditions and requirements of this title.” 35 U.S.C. §101. The Patent Statute defines the “process” category tautologically and provides little guidance as to the scope of a protectable method. “The term ‘process’ means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.” Id.The Federal Circuit has adopted a “machine-or-transformation” test to determine the patentability of process claims. In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc). A claimed process is “patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus; or (2) it transform a particular article into a different state or thing.” Id. at 954. Also, to satisfy the machine prong of the test, the use of a machine “must impose meaningful limits on the claim’s scope.” Id. at 961. See Cybersource at slip opn. 6. The Supreme Court in Bilski v. Kappos, 130 S. Ct. 3218 (2010) stated that the “machine-or-transformation test is a useful an important clue,” but it “is not the sole test for deciding whether an invention is a patent-eligible ‘process.”‘ Id. at 3227. “The Court declined to ‘define further what constitutes a patentable ‘process,’ beyond pointing to the definition of that term provided in § 100(b) and looking to the guideposts in [the Court’s precedents].’” Cybersource p. 7, quoting Bilski v. Kappos, 130 S.Ct. at 3232.

Precedents set forth three specific exceptions to § 101’s broad patent-eligibility principles: ‘laws of nature, physical phenomena, and abstract ideas.”‘ Id. at 3225 (quoting Diamond 447 U.S. at 309).

By reading claim 3, one notes that the only “machine” item in the claim is the “Internet.” It does not identify any computer or computer memory storage facility or database processing facility. Per the Court, “[t]he method of claim 3 simply requires one to ‘obtain and compare intangible data pertinent to business risks.’ The mere collection and organization of data regarding credit card numbers and Internet addresses is insufficient to meet the transformation [of data] prong of the test… Regardless of whether ‘the Internet’ can be viewed as a machine, it is clear that the Internet cannot perform the fraud detection steps of the claimed method.” Cybersource, pg. 8-9.

The Court held that claim 3 failed to recite patent-eligible subject mater because it was “drawn to an unpatentable mental process – a subcategory of unpatentable abstract ideas.” Id, see also In re Grams, 888 F.2d 835, 840 (Fed. Cir. 1989)(data-gathering steps cannot make an

otherwise nonstatutory claim statutory); In re Meyer, 688 F.2d 789, 794 (CCPA 1982); Gottschalk v. Benson, 409 U.S. 63, 67 (1972)(method of programming a general-purpose computer to convert

binary-coded decimal (“BCD”) numbers into pure binary through the use of a mathematical algorithm not patentable subject matter); Parker v. Flook, 437 U.S. 584 (1978)(method for calculating alarm limits for catalytic chemical conversion not patentable); In re Schrader, 22 F.3d 290, 291 (Fed. Cir. 1994)(holding unpatentable a method of conducting auctions to maximize total

sales revenue); In re Warmerdam, 33 F.3d 1354, 1355, 1360 (Fed. Cir. 1994) (holding unpatentable a process for controlling objects to avoid collisions); In re Comiskey, 554 F.3d 967, 980 (Fed. Cir. 2009)(method of arbitration).

As for the computer readable medium claim (see claim 2 above), the Court looks to the underlying invention for patent-eligibility purposes. Since the steps in the computer program recited in claim 2 could be a mental process conducted by a person, the computer readable medium claim does not fall within one of another of the statutory categories of “process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101.

This case shows the importance of asserting data processing events, such as storing, processing, and interactively converting data, in claims to obtain a transformation of data useful as an output. Further, patent claims that were considered to pass muster in the past may no longer be deemed patentable subject matter. The simple nature of the Cybersource claims can be used as a teaching tool for patent litigators and district courts.

Abstract Ideas: Patent Claims Which Are More Than Abstract Ideas

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If a patent claim only covers an abstract idea, it does not define patentable subject matter but if the claim is narrower, such as one defining a machine or describing a transformation of data, then the claim does come within the purview of the Patent Statute.  The boundaries of what is or is not an abstract idea are currently fluid.  See the Supreme Court case of Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010).  The Federal Circuit Court of Appeals, in Research Corp. v. Microsoft Corp, Case No. 2010-1037 (Fed. Cir. Dec. 8, 2010)(available here), stated “The Supreme Court did not presume to provide a rigid formula or definition for abstractness.” Slip opn. p. 14 (herein “Research P. 14″), citing Bilski, 130 S.Ct. at 3236 (The Court has “never provide[d] a satisfying account of what constitutes an unpatentable abstract idea.” (Stevens, J., concurring)).  In the absence of a formula or definition, it is often difficult to identify the contours of an abstract idea and what is or is not patentable subject matter under 35 U.S.C. § 101.  The Research Corp. case and Prometheus Lab. Inc. v. Mayo Collaborative Serv., Case No. 2008-1403 (Fed. Cir. Dec. 17, 2010)(available here), provide some guidance.  With guidance from Judge Rich of the Federal Circuit who stated “the name of the game is the claim,” the language in the claims is critical.  Giles S. Rich, The Extent of the Protection and Interpretation of Claims-American Perspectives, 21 Int’l Rev. Indus. Prop. & Copyright L. 497, 499, 501 (1990).

The Patent Statute provides that “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 therefore, subject to the conditions and requirements of this title.”
35 U.S.C. § 101.  The Research Corp Court stated that: “The Supreme Court has articulated only three exceptions to the Patent Act’s broad patent-eligibility principles: ‘laws of nature, physical phenomena, and abstract ideas.’” Research P. 13, citing Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980).  The accused infringer in Research Corp asserted that the following claims, related to the processing of digital image data, were only abstract ideas and therefore not patentable subject matter.  The Federal Circuit held that the following claims in Research Corp for the ’310 patent and the ’228 patent (see note 1 below) defined patent-eligible subject matter .

1. A method for the halftoning of gray scale images by utilizing a pixel-by-pixel comparison of the image against a blue noise mask in which the blue noise mask is comprised of a random non-deterministic, non-white noise single valued function which is designed to produce visually pleasing dot profiles when thresholded at any level of said gray scale images. (’310 patent)

2. The method of claim 1, wherein said blue noise mask is used to halftone a color image. (’310 patent)

11. A method for the halftoning of color images, comprising the steps of utilizing, in turn, a pixel-by-pixel comparison of each of a plurality of color planes of said color image against a blue noise mask in which the blue noise mask is comprised of a random non-deterministic, non-white noise single valued function which is designed to provide visually pleasing dot profiles when thresholded at any level of said color images, wherein a plurality of blue noise masks are separately utilized to perform said pixel-by-pixel comparison and in which at least one of said blue noise masks is independent and uncorrelated with the other blue noise masks. (’228 patent)

In Research, the Federal Circuit stated:

With that guidance, this court also will not presume to define “abstract” beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act. In that context, this court processes claimed in the ’310 and ’228 patents. The ’310 and ’228 patents claim methods (statutory “processes”) for rendering a halftone image of a digital image by comparing, pixel by pixel, the digital image against a blue noise mask.  The invention presents functional and palpable applications in the field of computer technology. These inventions address “a need in the art for a method of and apparatus for the halftone rendering of gray scale images in which a digital data processor is utilized in a simple and precise manner to accomplish the halftone rendering.” ’310 patent col.3 ll.33-40. The fact that some claims in the ’310 and ’228 patents require a “high contrast film,” “a film printer,” “a memory,” and “printer and display devices” also confirm this court’s holding that the invention is not abstract. 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.This court also observes that the claimed methods incorporate algorithms and formulas that control the masks and halftoning. These algorithms and formulas, even though admittedly a significant part of the claimed combination, do not bring this invention even close to abstractness that would override the statutory categories and context.

Research Pp. 14-15.

The patent claims in play in Prometheus (see Note 2 below) were:

1.  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. (Claim 1 of the ‘623 patent).

46.  A method of optimizing therapeutic efficacy and reducing toxicity associated with treatment of an immune-mediated gastrointestinal disorder, comprising:
(a)  determining the level of 6-thioguanine or 6-methylmercaptopurine in a subject administered a drug selected from the group consisting of 6-mercaptopurine, azathiop[u]rine, 6-thioguanine, and 6-methyl-mercaptoriboside, 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 or a level of 6-methylmercaptopurine greater than about 7000 pmol per 8×108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject. (Claim 46 of the ‘302 patent).

The Federal Circuit in Prometheus stated: “In our pre-Bilski decision in this case, we held not only that Prometheus’s asserted claims recite transformative ‘administering’ and ‘determining’  steps, but also that Prometheus’s claims are drawn not to a law of nature, but to a particular application of naturally occurring correlations, and accordingly do not preempt all uses of the recited correlations between metabolite levels and drug efficacy or toxicity.” Prometheus P. 14.  As a result, the Federal Circuit again approved Prometheus’ claims to define patentable subject matter.

More than a century ago, the Supreme Court addressed the limits of the abstract idea test in a case involving Samuel Morse’s telegraph patent.  O’Reilly v. Morse, 56 U.S. 15 How. 62 (1853).  Notwithstanding its age, the Supreme Court in Bilski v Kappos cited with approval the 1853 Morse case. The Court in that case found that one of Morse’s patent claims, using electromagnetism for writing at a distance, would preempt a wide swath of technological developments and was not patentable.  Morse claimed: “the use of the motive power of the electric or galvanic current, which I call electro-magnetism, however developed for marking or printing intelligible characters, signs, or letters, at any distances.”  This claim was too broad and would preempt the entire technical field without regard to the machinery associated with the process.  The Court rejected the patent claim due to preemption of an entire field of technologic advances.  However, the Court approved other Morse patent claims, one of which claimed: “the system of signs, consisting of dots and spaces, and of dots, spaces, and horizontal lines, substantially as herein set forth and illustrated, in combination with machinery for recording them, as signals for telegraphic purposes.”

These cases highlight the importance of defining in a patent claim either data transformation elements or machine related aspects of an invention.  Further, litigators need to present the “functional and palpable application [of the invention]  in the field” and the “need in the art for a method of and apparatus” of the invention. See Research Pp. 14-15.

Note 1: The patents in Research were: U.S. Patent Nos. 5,111,310 (“’310 patent”); 5,341,228 (“’228 patent”); 5,477,305 (“’305 patent”); 5,543,941 (“’941 patent”); 5,708,518 (“’518 patent”); and 5,726,772 (“’772 patent”).

Note 2: The patents in Prometheus were: U.S. Patent Nos. 6,355,623 (“‘623 patent”) and 6,680,302 (“‘302 patent).