In The Wake Of Bilski, U.S. Patent Office Issues Guidelines For Determining Whether Method Claims Recite Eligible Subject Matter

Tuesday, November 2, 2010 - 01:00

The United States Patent and Trademark Office (PTO) published Interim Guidance on July 27, 2010, for evaluating method claims for subject-matter eligibility under § 101 of the Patent Act.1 The guidance follows this year's long-awaited Supreme Court decision in Bilski v. Kappos .2The Court held that the prevailing "machine-or-transformation test" - whereby a method may be patentable only if it is tied to a particular apparatus, or transforms a particular article to a different state or thing - is not the exclusive test under § 101.3The majority also held that business methods are not categorically excluded from protection under the Patent Act.4Four concurring justices, however, would have gone further and held that methods of doing business are never patentable.5

Although the Supreme Court reaffirmed the viability of the machine-or-transformation test, it declined to adopt any additional test for determining whether a method is eligible for patentability, or to categorically exclude any type of processes from patentability.6The PTO's Interim Guidance seeks to fill this void by providing a set of factors for patent examiners to employ to determine if a method or process is patent-eligible. Several factors are drawn from the machine-or-transformation test, while others are directed to identifying attempts to claim unpatentable natural phenomena, scientific facts, general concepts, or other abstract ideas. The Interim Guidance also emphasizes that subject-matter eligibility is a threshold inquiry, and that in most cases patentability will hinge on novelty, non-obviousness, written description, and enablement.

Factors That May Weigh In Favor Of, Or Against, Patentability

In Bilski the Supreme Court returned to basic principles, explaining that method and process claims are generally patent-eligible unless they are directed to a law of nature, physical phenomenon, or an abstract idea. Although the machine-or-transformation test is a "useful and important clue" to determine whether a claimed method includes unpatentable subject matter, it is not the only test.7The Interim Guidance accordingly provides a non-exclusive list of factors to determine "whether the claimed invention, viewed as a whole, is disqualified as being a claim to an abstract idea."8Each relevant factor is to be considered, and no single factor is determinative.9

Factors weighing toward eligibility include:

1. Recitation of a particular machine or particular transformation.

2. The machine implements the steps of the method.

3. An article undergoes a change in state or thing (e.g., an objectively different function or use).

4. The article being transformed is an object or substance.

5. If the claim is directed to applying a law of nature, the application meaningfully limits the execution of the steps.

6. The claim is more than a mere statement of a concept, and either describes a particular solution to a problem or implements the concept in some tangible way.10

Factors that weigh against eligibility include:

1. No recitation, or insufficient recitation, of a machine or transformation.

2. The machine or transformation is nominally, insignificantly, or tangentially related to performance of the steps of the method.

3. The machine is only generically recited or is merely an object on which the method operates.

4. The transformation involves only a change in position or location of an article.

5. The claim would monopolize a natural force, patent a scientific fact, or effectively grant a monopoly over a concept.11

Although it is no longer the exclusive test, the machine-or-transformation test continues to play a prominent role in the analysis. According to the Interim Guidance, a method is more likely patentable if it is tied to a specifically identified machine or apparatus that implements a step of the method, it is integral to the method, or it imposes nontrivial limits on the method.12Additionally, a method is more likely patentable if it involves the transformation of a particular object or substance to one with a different function or use.13

Other factors identified by the Interim Guidance are directed to subject matter that might fail the machine-or-transformation test but might nevertheless be patentable. Even in the absence of a particular machine, apparatus, or transformation, a method could be patentable if performing it involves only a specific application of a law of nature, does not cover every mode of accomplishing its effect, or does not rely solely on subjective determinations.14

The Interim Guidance notes that the involvement of a "general concept" is "a clue that the claim is drawn to an abstract idea."15One frequent objection to allowing patents on abstract ideas is that the coverage would be unacceptably broad, encompassing potentially every solution to a certain problem, or every application of a natural force or scientific fact. Where a method involves a general concept, the Interim Guidance instructs that the degree to which the claim would foreclose others is relevant to whether it is an unpatentable abstract idea. A method is less likely to be patentable if it preempts use in other fields, effectively covers all possible solutions to a particular problem, or encompasses uses that are not yet known.16Additionally, a method that is disembodied or has subjective or imperceptible results also is less likely to be patentable.17 The Interim Guidance offers several examples of general concepts: basic economic practices or theories, legal theories and rules of law, mathematical concepts, mental activity, interpersonal interactions, teaching concepts, human behavior, or instructing how business should be conducted.18By and large, method claims directed to these types of general concepts would not be patent-eligible.

The Interim Guidance cautions that these factors "are intended to be useful examples and are not intended to be exclusive or limiting."19The PTO explains that new factors might be developed, and existing factors might be modified, to take into account developments in the law and PTO practice.20

The Role Of Subject-Matter Eligibility In Patent Prosecution

The Interim Guidance instructs that examiners should reject claims that attempt to cover abstract ideas, and should "specifically point out the factors that are relied upon" as the basis of a rejection under § 101 or, if appropriate, allowance of a claim.21To establish a prima facie case of unpatentability under § 101, the examiner must "provid[e] clear rationale supporting the determination that an abstract idea has been claimed . . . ."22The conclusion must be based on "the claim as a whole ."23The applicant will then have the opportunity to explain why the claimed method is not drawn to an abstract idea.24

Although the focus of the Interim Guidance is the subject-matter eligibility analysis under § 101, the Interim Guidance also downplays the relative importance of this analysis as a determiner for patentability:

Section 101 is merely a coarse filter and thus a determination of eligibility under § 101 is only a threshold question for patentability. Sections 102 [novelty], 103 [obviousness], and 112 [written description and enablement] are typically the primary tools for evaluating patentability unless the claim is truly abstract . . . .25

Accordingly, the Interim Guidance instructs examiners to "avoid treating an application solely on the basis of patent-eligibility under § 101 except in the most extreme cases."26

Implications

Although the Interim Guidance lacks the force of law or a substantive rule, it will guide the examination of patent applications and may be considered by courts in evaluating the validity of method claims.27And although business methods are not categorically excluded from patent protection under Bilski , these and other types of methods - including software, financial services, pharmaceutical testing, or medical treatment methods - might be subjected to scrutiny in the PTO and in litigation based on the various factors set out in the Interim Guidance.

The PTO requested public comment on its Interim Guidance by September 27, 2010, and in particular sought comments on (1) the scope of the holding in Bilski , (2) the extent to which the machine-or-transformation test would exclude otherwise patentable methods or include unpatentable abstract ideas, and (3) whether certain classes of business methods are categorically unpatentable.28Many organizations submitted comments, including the American Intellectual Property Law Association and the Intellectual Property Owners Association. The PTO is expected to finalize its guidance for evaluating method claims under § 101 within the next few months. 1 Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos , 75 Fed. Reg. 43922 (July 27, 2010), available at http://edocket.access.gpo.gov/2010/pdf/2010-18424.pdf; see 35 U.S.C. § 101.

2 130 S. Ct. 3218 (2010).

3 Id. at 3227.

4 Id. at 3228-29.

5 Id. at 3249-50 (Stevens, J., dissenting).

6 Id. at 3227-29.

7 Id . at 3227. The Interim Guidance observes, however, that "[t]o date, no court, presented with a subject matter eligibility issue, has ever ruled that a method claim that lacked a machine or transformation was patent-eligible."Interim Guidance, 75 Fed. Reg. at 43924.

8 Interim Guidance, 75 Fed. Reg. at 43924.

9 Id . at 43926.

10 Id . at 43927.

11 Id.

12 Id . at 43925.

13 Id .

14 Id .

15 Id .

16 Id . at 43925-26.

17 Id . at 43926.

18 Id .

19 Id . at 43924.

20 See id .

21 Id . at 43926.

22 Id .

23 Id . (emphasis in original).

24 See id . at 43923, 43926.

25 Id . at 43926.

26 Id . at 43923-24.

27 Id . at 43926.

28 See id. at 43922.

Kelsey I. Nix is a Partner in the Intellectual Property Department of Willkie Farr & Gallagher LLP. He focuses his practice on trials and appeals of patent, trade secret, copyright and trademark infringement cases. The author acknowledges with appreciation the assistance of Robert Kofsky , an Associate at Willkie Farr & Gallagher LLP, in the research and preparation of this article. Copyright © 2010 by Willkie Farr & Gallagher LLP. All rights reserved.

Please email the authors at knix@willkie.com or rkofsky@willkie.com with questions about this article.