Patentable subject matter

Patent law (patents for inventions)
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Patentable, statutory or patent-eligible subject matter is subject matter which is susceptible of patent protection. The laws or patent practices of many countries suggest that certain subject matter is or is not something for which a patent should be granted.

Together with novelty, inventive step or nonobviousness, utility and industrial applicability, the question of whether a particular subject matter is patentable is one of the fundamental requirements for patentability.

Legislations

The subject-matter which is regarded as patentable as a matter of policy, and correspondingly the subject-matter which is excluded from patentability as a matter of policy, depends on the national legislation or international treaty.

Canada

Main article: Canadian patent law

According to the Canadian Intellectual Property Office (CIPO) patents may only be granted for physical embodiments of an idea, or a process that results in something that is tangible or can be sold. This excludes theorems, computer programs per se, or business methods.^[1]

European Patent Convention

The European Patent Convention does not provide any positive guidance on what should be considered an invention for the purposes of patent law. However, it provides in Article 52(2) EPC a non-exhaustive list of what are not to be regarded as inventions, and therefore not patentable subject matter:

The following in particular shall not be regarded as inventions within the meaning of paragraph 1:

(a) discoveries, scientific theories and mathematical methods;

(b) aesthetic creations;

(c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;

(d) presentations of information.

Article 52(3) EPC then qualifies Art. 52(2) EPC by stating:

The provisions of paragraph 2 shall exclude patentability of the subject-matter or activities referred to in that provision only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.

(Some further items are excluded under Article 52(4) EPC, as formally being not industrially applicable).

Practice at the European Patent Office

Under Article 52(1) EPC, "European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step." So, four questions need to be assessed:

1. Is there an invention?
2. Is the invention susceptible of industrial application?
3. Is the invention novel?
4. Does the invention involve an inventive step?

The first question "Is there an invention?" is equivalent to: "Is the claimed subject-matter as a whole excluded from the realm of patentable subject-matter?" The invention question or patentable subject-matter question necessarily precedes the three further questions, which cannot be assessed when there is no invention.^[2]

According to the case law of the Boards of Appeal of the EPO, the question "Is there an invention?" also implicitly implies the further question: "Does the claimed subject-matter have a technical character?" "Having technical character is an implicit requirement of the EPC to be met by an invention to be an invention within the meaning of Article 52(1) EPC".^[3]

Patentable subject-matter considerations also intervene again at a secondary level, during the inventive step examination. T 641/00 (Comvik/Two Identities) states that, "An invention consisting of a mixture of technical and non-technical features and having technical character as a whole is to be assessed with respect to the requirement of inventive step by taking account of all those features which contribute to said technical character whereas features making no such contribution cannot support the presence of inventive step." ^[4] The non-technical features are the ones that are excluded from the realm of patentable subject-matter as a matter of policy. T 258/03 (Hitachi/Auction Method) further developed this test for patentable subject-matter.

Under this test, a patent application or patent which does not provide a technical solution to a technical problem would be refused ^[5] or revoked ^[6] as lacking inventive step.

Practice in the United Kingdom

Following the 2006 Court of Appeal judgment in Aerotel v Telco and Macrossan's application, which contains a lengthy discussion of case law in the area, the UKPO has adopted the following test:^[7]

(1) properly construe the claim

(2) identify the actual contribution

(3) ask whether it falls solely within the excluded subject matter

(4) check whether the actual or alleged contribution is actually technical in nature.

The Court decided that the new approach provided a structured and more helpful way of applying the statutory test for assessing patentability which was consistent with previous decisions of the Court.

This test is quite different from the test used by the EPO, as expressed in T 641/00 (Comvik/Two Identities) and T 258/03 (Hitachi/Auction Method), but it is considered that the end result will be the same in nearly every case.^[7]

United States

Section 101 of Title 35 U.S.C. sets out the subject matter that can be patented:

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.

In October 2005, the United States Patent and Trademark Office (USPTO) issued interim guidelines ^[8] for patent examiners to determine if a given claimed invention meets the statutory requirements of being a useful process, manufacture, composition of matter or machine (35 U.S.C. § 101). These guidelines assert that a process, including a process for doing business, must produce a concrete, useful and tangible result to be patentable. It does not matter whether the process is within the traditional technological arts or not. A price for a financial product, for example, is considered to be a concrete useful and tangible result (see State Street Bank v. Signature Financial Group). However, on August 24, 2009, the USPTO issued new interim guidelines ^[9] so that examination would comport with the Federal Circuit opinion in In re Bilski, which held that the "useful, concrete, and tangible" test for patent-eligibility is incorrect and that State Street is no longer valid legal authority on this point. Instead, the Federal Circuit and the new USPTO guidelines use a Machine-or-Transformation Test to determine patentability for processes. The Supreme Court determined that the claims in the Bilski case covered non-statutory subject matter as it was too abstract and broad.

The USPTO has reasserted its position that literary works, compositions of music,^[10] compilations of data, legal documents (such as insurance policies), and forms of energy (such as data packets transmitted over the Internet), are not considered "manufactures" and hence, by themselves, are not patentable. Nonetheless, the USPTO has requested comments from the public on this position. The Federal Circuit has ruled, in In re Nuitjen,^[11] that signals are not statutory subject matter, because articles of manufacture (the only plausible category under 35 U.S.C. § 101) do not include intangible, incorporeal, transitory entities.

The USPTO was prompted to issue the guidelines by a recent decision by their board of appeals, Ex Parte Lundgren.^[12] This decision asserted that according to US judicial opinions, inventions do not have to be in the "technological arts" to satisfy the requirements of 35 U.S.C. § 101. They must, however, produce a concrete, useful and tangible result. As indicated above, however, In re Bilski supersedes that legal test (as to the "useful, concrete, and tangible" test). The Bilski majority opinion also rejects the "technological arts" test, although three Federal Circuit judges (Mayer, dissenting, and Dyk and Linn, concurring) stated that they considered being technological an indispensable condition of patent-eligibility.

The algorithm exception and the patent-eligibility trilogy

Main article: Software patents under United States patent law

The exception to patenting algorithms arose out of three Supreme Court cases commonly referred to as the "Supreme Court Trilogy" or "patent-eligibility trilogy". This is a designation for three Supreme Court cases decided within a decade on whether, and in what circumstances, a claimed invention was within the scope of the US patent system (that is, was eligible to be considered for a patent grant). The three cases of the trilogy can be harmonized on the basis of when a claimed implementation of an idea or principle is old or departs from the prior art in only a facially trivial way, the claim is patent-ineligible (as Nielson and Morse said, and Flook reaffirmed, it must be treated as if in the prior art).

Gottschalk v. Benson

Main article: Gottschalk v. Benson

The invention in this case was a method of programming a general-purpose digital computer using an algorithm to convert binary-coded decimal numbers into pure binary numbers. The Supreme Court noted that phenomena of nature, mental processes and abstract intellectual concepts were not patentable, since they were the basic tools of scientific and technological work. However, new and useful inventions derived from such discoveries are patentable. The Court found that the discovery in Benson was unpatentable since the invention, an algorithm, was no more than abstract mathematics. Despite this holding, the Court emphasized that its decision did not preclude computer software from being patented, but rather precluded the patentability of software where the only useful characteristic was an algorithm. The Court further noted that validating this type of patent would foreclose all future use of the algorithm in question. Therefore, like the traditional exceptions to patentable subject matter, the purpose of the algorithm exception was to encourage development of new technologies by not granting patents that would preclude others from using abstract mathematical principles.

Parker v. Flook

Main article: Parker v. Flook

The invention in this case was a method of calculating alarm limits by using a "smoothing algorithm" to make the system responsive to trends but not momentary fluctuations in process variables (such as temperature). Because it was conceded that the implementation of the algorithm was conventional, the Court found that the inventor did not even purport to have invented anything on which a patent could be granted.^[13] The Court did so on the basis of the principle that the nonstatutory subject matter (the algorithm) must be regarded as already in the prior art. Therefore, there was nothing left on which a patent could issue. In a case in which a patent was sought on an implementation of a principle (the algorithm), the implementation itself must be inventive for a patent to issue. Since that was not so, the Court held that the patent office had properly rejected Flook's claim to a patent. The Court relied on the decision in Neilson v. Harford, an English case that the Supreme Court had relied upon in O'Reilly v. Morse, for the proposition that an idea or principle must be treated as if it were already in the prior art, irrespective of whether it was actually new or old.^[14] This approach is something like that of analytic dissection in computer-software copyright law, although its use in patent law preceded its use in copyright law by a century or more.

Diamond v. Diehr

Main article: Diamond v. Diehr

In this case the Court backed away from the analytic dissection approach, and insisted that patent-eligibility must be decided on the basis of the claim (or invention) considered as a whole. That requirement is found in the statute, but only for section 103 (governing obviousness or inventive step) and not for section 101 (governing patent-eligibility). Despite this difference in emphasis, however, Diehr can be harmonized with Flook and Benson, and the Diehr Court studiously avoided stating that Flook and Benson were overruled or limited.

Bilski v. Kappos

On June 28, 2010, the United States Supreme Court ruled in Bilski v. Kappos^[15] that Bernard Bilski's patent application for a method of hedging the seasonal risks of buying energy is an abstract idea and is therefore unpatentable. However, it also said that business methods are not inherently unpatentable, and was silent on the subject of software patents. The majority opinion also said that the Federal Circuit's "machine or transformation" test, while useful, is not an exclusive test for determining the patentability of a process. Instead, the Supreme Court reviewed the "Supreme Court Trilogy" described above and said that future decisions should be grounded in the examples and concepts expressed in those opinions. As has been reported,^[16] the decision leaves many questions unanswered, including the patentability of many medical diagnostic technologies and software.

Controversies

The question of what should and should not be patentable subject matter has spawned a number of battlegrounds in recent years, setting against each other those in each area supporting patentability, claiming that patents would cause increased innovation and public good, against opponents with views that patentability was being sought only for private good but would do public harm.

Flashpoints have included the patenting of naturally occurring biological material; genetic sequences; stem cells; "traditional knowledge"; programs for computers; business methods.

In March 2010, a federal district court judge in the Southern District of New York ruled that purified DNA sequences and the inventions using them are unpatentable.^[17] As has been discussed,^[18] Judge Sweet relied entirely upon Supreme Court precedent and ignored contrary case law of the Federal Circuit Court of Appeals^[19] to conclude that isolated DNA is of the same fundamental quality as natural DNA and is thus unpatentable under section 101 of the Patent Act; and that the method claims of the patents were abstract mental processes that were also unpatentable. His rationale is controversial and his ruling has been appealed to the Federal Circuit.^[20]

In the process, different jurisdictions have come to different views as to what should be allowed and what should not.

Patents on business methods have proven to be a particularly controversial type of statutory subject matter. They have been criticized because the patents granted are perceived as being too broad, perhaps due to the difficulty in searching for prior art and recruiting suitably qualified patent examiners who have historically had a science background rather than a business background. Patent applications for business methods are also subject to delays in prosecution at the United States Patent and Trademark Office and other patent offices.

References and notes

1. ^ CIPO What can you patent?
2. ^ See Article 57 EPC: "An invention shall be considered as susceptible of industrial application if (...)", Article 54(1) EPC: "An invention shall be considered to be new if (...)", and Article 56(1) EPC: "An invention shall be considered as involving an inventive step (...)")
3. ^ T 931/95 (Pension Benefit Systems Partnership)
4. ^ T 641/00 (OJ EPO 2003,352; cf headnote I)
5. ^ Article 97(1) EPC
6. ^ Article 102(1) EPC
7. ^ ^{a b} Patents Act 1977: Patentable subject matter
8. ^ United States Patent and Trademark Office, Interim Guidelines for Examination of Patent Applications for Patent Subject Matter Eligibility, OG Notices: 22 November 2005 (html)
9. ^ United States Patent and Trademark Office, New Interim Patent Subject Matter Eligibility Examination Instructuons, August 24, 2009
10. ^ Some new forms of musical notation, however, have been patented in the United States. See Music notation#Patents.
11. ^ 500 F.3d 1346 (Fed. Cir. 2007)
12. ^ Precedential opinion, Paper No. 78, United States Patent and Trademark Office, Before the Board of Patent Appeals and Interferences, Ex parte Carl A. Lundgren, Appeal No. 2003-2088, Application 08/093,516 April 20, 2004
13. ^ See Flook, 437 U.S. at 594.
14. ^ Lower court cases using this rule include Armour Pharm. Co. v. Richardson-Merrell, Inc., 396 F.2d 70, 74 (3d Cir.1968) (facially-trivial device-implementation of newly-discovered natural phenomenon); National Lead Co. v. Western Lead Co., 324 F.2d 539 (9th Cir.1963) (similar); Davison Chem. Corp. v. Joliet Chems., Inc., 179 F.2d 793 (7th Cir.1950) (similar); Loew's Drive-In Theatres v. Park-In Theatres, 174 F.2d 547 (1st Cir.1949).
15. ^ Bilski v. Kappos Supreme Court slip opinion
16. ^ Bilski v. Kappos: The Supreme Court Strikes a Blow for Inventors by Thomas Carey
17. ^ Association for Molecular Pathology v. U.S. Patent and Trademark Office Court decision.
18. ^ "Federal Judge Would Invalidate All DNA Patents, But His Rationale Is Controversial" by Justin P. Huddleson and Bruce Sunstein
19. ^ In re Duel, 51 F3d 1552(Fed Cir 1995); In re Bell, 991 F.2d 781 (Fed Cir. 1993).
20. ^ Federal District Court Rules Isolated DNA Claims are Not Patentable: Myriad to Appeal Decision to the Federal Circuit Court of Appeals

Further reading

• Peter Mole, Economics, ethics and the subject-matter definition of the EPC, The CIPA Journal, April 2003
• Justine Pila, The Requirement for an Invention in Patent Law, Oxford University Press, 2010, ISBN 978-0-19-929694-1

See also

• Business method patent
• Computer programs and the Patent Cooperation Treaty
• Machine-or-transformation test (United State patent law)
• Software patent
  • Software patents under the European Patent Convention
  • Software patents under TRIPs Agreement
  • Software patents under United Kingdom patent law
  • Software patents under United States patent law

External links

• Typepad.com, Ex parte Lundgren (U.S. Board of Patent Appeals and Interferences, October 2005), especially the dissent of Judge Barrett, which contains a lengthy presentation of statutory subject matter following page 19.
• Patent.gov, UK Patent Office Manual of Patent Practice section on patentability.