United Inventors Association, Abstract vs. Tangible, March 2008
“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 . . ..” - 35 U.S.C. § 101
The above excerpt of § 101 is the basis of patent law in the U.S. With the exception of a small modification in 1952, § 101 has remained virtually unchanged since written by Thomas Jefferson. Until recent times, the statute gathered little attention. However, with the addition of software and business method patents in the 1980’s, the statute has been the subject of dispute. Until about 1981, the U.S. Patent Office held that steps performed by a computer could not be patented under at least § 101. However, in Diamond v. Diehr, 450 U.S. 175 (1981), the Supreme Court overruled the Patent Office and held that, though an algorithm and the like are abstract and cannot be protected with a patent, the fact that an otherwise patentable process is carried out on a computer does not preclude obtaining a patent on such technology.
As a result, to this day, software and business method patents are often written in a roundabout manner. For example, Einstein could not patent his famous E=MC2 formula because this is considered an abstract law of nature. However, claim a method of determining the mass of an object based on measurements of light passing through the object, and you have probably at least overcome § 101.
If the difference between the first and second example seem fuzzy, it is because it is. A patent is nothing less than the creation of a property right from an intangible concept, and it is no easy task to define the boundary of an intangible right. King Solomon said, “. . . that which has been done is that which will be done. So there is nothing new under the sun” (Ecclesiastes 1:9). Yet, the Supreme Court famously ruled, “anything new under the sun made by man” is patentable. Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980), quoting S.Rep.No 1979, 82d Cong., 2d Sess., 5 (1952).
For the past 30 years, the Patent Office and the courts have defined and redefined the difference between a patentable process and an abstract concept. No test has ever stood the test of time. A colleague of mine filed a patent we both knew the Patent Office was likely to reject under § 101. He retorted, “Who knows what the law will be in three years when the Patent Office finally examines this application?”
One of the presently used tests was stated by the Court of Appeals for the Federal Circuit in State Street Bank & Trust Co. Here, it was found that an idea is patentable if it produces a useful, concrete and tangible result. State Street Bank & Trust Co. v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. Jul. 23, 1998). However in 2006 Justices Scalia, Thomas, and Alito noted, “this Court has never made such a statement and, if taken literally, the statement would cover instances where this Court has held the contrary. " Lab Corp. v. Metabolite, 548 U.S. ___ (2006) (referring to O'Reilly v. Morse, 15 How. 62 (1854) for Morse code).
Meanwhile, while the U.S. Patent Office’s Interim Guidelines for Examination of Patent Applications for Patent Subject Matter Eligibility (2005) generally follow the Federal Circuit, the U.S. Patent Office Appeals Board in Bilski distinguished State Street, as only applying to “machine implemented” processes (contradicting State Street itself). The decision, complete with an excerpt from Disney’s Pirates of the Caribbean, is nothing less than a demand that the Federal Circuit’s test be overturned, perhaps, in a bid to decrease that Patent Office’s seven-year backlog for business method patent applications. The Supreme Court may agree.
The Bilski opinion is in the process of being heard en banc at the Federal Circuit, but the issue over whether to draw the line between a man-made discovery versus an abstract concept will likely remain a controversy for a long time to come.