Alice Corporation loses 35 USC 101 appeal
Upon consideration en banc, a majority of the court
affirms the district court’s holding that the asserted
method and computer-readable media claims are not
directed to eligible subject matter under 35 U.S.C. § 101.
An equally divided court affirms the district court’s holding
that the asserted system claims are not directed to
eligible subject matter under that statute.
Alice Corp., the patentee/appellant/DJ defendant, loses.
Footnote 1 of the Lourie opinion states
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.
Judge Lourie also noted:
It is also important to recognize that § 101, while farreaching,
only addresses patent eligibility, not overall
patentability. The statute directs that an invention that
falls within one of its four enumerated categories “may”
qualify for a patent; thus, inventions that are patent
eligible are not necessarily patentable. As § 101 itself
explains, the ultimate question of patentability turns on
whether, in addition to presenting a patent-eligible inven
tion, the inventor also satisfies “the conditions and requirements
of this title,” namely, the novelty, nonobviousness,
and disclosure requirements of 35 U.S.C. §§ 102,
103, and 112, among others. See 35 U.S.C. § 101. Congress’s
broad approach to subject-matter eligibility ensures
that the patent office doors remain open to most
inventions, but even so, those that gain entry still must
surmount various substantive and procedural hurdles
that stand between patent eligibility and a valid patent.
See Diamond v. Diehr, 450 U.S. 175, 191 (1981).
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, id. at 185, because such
fundamental discoveries represent “the basic tools of
scientific and technological work,” Gottschalk v. Benson,
409 U.S. 63, 67 (1972). Thus, even inventions that fit
within one or more of the statutory categories are not
patent eligible if drawn to a law of nature, a natural
phenomenon, or an abstract idea. The underlying concern
is that patents covering such elemental concepts would
reach too far and claim too much, on balance obstructing
rather than catalyzing innovation. 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. (...)
While simple enough to state, the patent-eligibility
test has proven quite difficult to apply. The difficulty lies
in consistently and predictably differentiating between,
on the one hand, claims that would tie up laws of nature,
natural phenomena, or abstract ideas, and, on the other,
claims that merely “embody, use, reflect, rest upon, or
apply” those fundamental tools. Mayo, 132 S. Ct. at 1293.
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. We would adopt this approach
to address the abstractness of the specific
computer-implemented inventions presented in this case,
but it might also inform patent-eligibility inquiries arising
in other contexts.
Judge Newman wrote an interesting opinion, joined by no one.
The text began:
The ascendance of section 101 as an independent
source of litigation, separate from the merits of patentability,
is a new uncertainty for inventors. The court, now
rehearing this case en banc, hoped to ameliorate this
uncertainty by providing objective standards for section
101 patent-eligibility. Instead we have propounded at
least three incompatible standards, devoid of consensus,
serving simply to add to the unreliability and cost of the
system of patents as an incentive for innovation. With
today’s judicial deadlock, the only assurance is that any
successful innovation is likely to be challenged in opportunistic
litigation, whose result will depend on the random
selection of the panel.
Reliable application of legal principles underlies the
economic incentive purpose of patent law, in turn implementing
the benefits to the public of technology-based
advances, and the benefits to the nation of industrial
activity, employment, and economic growth.
The direction of Judge Newman is seen in the text:
This section 101 issue appears to have its foundation
in a misunderstanding of patent policy, for the debate
about patent eligibility under section 101 swirls about
concern for the public’s right to study the scientific and
technologic knowledge contained in patents. The premise
of the debate is incorrect, for patented information is not
barred from further study and experimentation in order
to understand and build upon the knowledge disclosed in
3. The court should confirm that experimental use
of patented information is not barred–
of this principle appears to be the impetus for
the current debate, for the popular press, and others who
know better, have stated that patented subject matter
cannot be further studied. This theory is presented to
support section 101 ineligibility, on the reasoning that
important discoveries should be ineligible for patenting so
that they can be further studied. I propose that the court
reaffirm the long-standing rule that study and experimentation
are not infringement, whether the experimentation
is for basic or applied purposes.
Myriad appears in footnote 2:
See, e.g., Adam Liptak, Supreme Court to Look at
a Gene Issue, N.Y. Times, Nov. 30, 2012 (“Myriad and
other gene patent holders have gained the right to exclude
the rest of the scientific community from examining the
naturally occurring genes of every person in the United
States”); Michael Specter, Can We Patent Life?, The New
Yorker, April 2, 2013 (“Any scientist who wants to conduct
research on such a gene—even on a small sequence
of its DNA—has to pay license fees.”).
AND there is a journal cite:
Judicial precedent is sparse on the issue of experimental
use, for until recently the principle was not in
question. Technical publications often describe research
in patent-heavy fields, apparently without fear of lawsuits.
At a recent conference reported in the Trademark,
& Copyright Journal, a spokesman stated that “research
has been spurred rather than inhibited as a result of the
[Myriad] patents, citing 18,000 researchers who have
published over 10,000 articles . . . .” 85 PTCJ 759 (2013).
[Note presumably this reference is to the BNA Patent, Trademark & Copyright Journal.
The PTCJ was cited in IPT, March 2012 by Robert Oake: See Int'l Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233, 1240 (Fed. Cir. 2009) (Federal Circuit concluded that the ordinary observer test is the sole test for anticipation and that the ordinary designer standard is used only to determine whether to combine earlier references to construct a single piece of art for comparison under the ordinary observer test). This decision is criticized in Oake, Rethinking Design Patent Infringement Law, pages 19, 20 (November 2011) (available at designpatentschool.com) and Saidman, Design Patents Sunk in International Seaway, 83 Patent. Trademark & Copyright Journal 278 (BNA December 23, 2011). PTCJ was cited by LBE in IPT in November 2001: Festo Briefs: Which Future for 21st Century Patent Law? ]
Heisenberg is quoted by Judge Newman on "uncertainty"-->
The intrinsic uncertainty of the meaning of words
was of course recognized very early and has
brought about the need for definitions, or—as the
word “definition” says—for the setting of boundaries
that determine where the word is to be used
and where not to. But definitions can be given only
with the help of other concepts, and so one will
finally have to rely on some concepts that are taken
as they are, unanalyzed and undefined.
Werner Heisenberg, Physics and Philosophy 168 (1958).
Judge Newman's conclusion:
I share the majority view that all of the claims stand
or fall together. I would hold that the system, the method,
and the media claims are eligible under section 101,
and would remand to the district court for determination
of patentability under the substantive provisions of the
**In passing, Diamond v. Chakrabarty, 447
U.S. 303 (1980) is mentioned a few times, but is not emphasized in any of the opinions.
The central point of the Chakrabarty case:
A live, human-made micro-organism is patentable subject matter under 35 U.S.C. § 101
Of the technology, GE researcher Chakrabarty transferred naturally-available plasmids to the bacterium Pseudomonas. Footnote 1 states:
Plasmids are hereditary units physically separate from the chromosomes of the cell. In prior research, Chakrabarty and an associate discovered that plasmids control the oil degradation abilities of certain bacteria. In particular, the two researchers discovered plasmids capable of degrading camphor and octane, two components of crude oil. In the work represented by the patent application at issue here, Chakrabarty discovered a process by which four different plasmids, capable of degrading four different oil components, could be transferred to and maintained stably in a single Pseudomonas bacterium, which itself has no capacity for degrading oil.
Of the "maintained stably" part: By irradiating the transformed organism with UV light after plasmid transfer, Chakrabarty discovered a method for genetic cross-linking that fixed all four plasmid genes in place and produced a new, stable, bacteria species .
As the dissent st the Supreme Court pointed out, the legal question was obtaining a patent on a living organism, NO MATTER HOW IT WAS PRODUCED:
The only question we need decide is whether Congress, exercising its authority under Art. I, 8, of the Constitution, intended that he be able to secure a monopoly on the living organism itself, no matter how produced or how used.
Genetic transformation was not at legal issue in Chakrabarty, and the technical matter was transfer of naturally-occurring plasmids to a bacterium.
Observe that footnote 16 of Rebecca Eisenberg, Prometheus Rebound: Diagnostics, Nature, and Mathematical Algorithms, 122 Yale L.J. Online 341 (2013) states:
e.g., Diamond v. Chakrabarty, 447 U.S. 303 (1980) (finding that bacteria transformed to incorporate multiple naturally occurring DNA plasmids were patent eligible);