Tuesday, February 28, 2012

FORT PROPERTIES, INC. prevails at CAFC in 101 case

The CAFC noted:

Four seminal Supreme Court precedents provide guidance regarding when an invention qualifies as a patent-eligible process as opposed to an abstract idea: Bilski, 130 S.Ct. 3218; Diamond v. Diehr, 450 U.S. 175 (1981); Parker v. Flook, 437 U.S. 584 (1978); and Gottschalk v. Benson, 409 U.S. 63 (1972). First, in Benson, the Court found that an algorithm capable of convert- ing binary-coded decimal numerals into pure binary code was an unpatentable abstract idea. 409 U.S. at 64-67, 71- 72. In reaching this conclusion, the Court explained that allowing such an invention to qualify as patent-eligible subject matter “would wholly pre-empt [a] mathematical formula and in practical effect would be a patent on the algorithm itself.” Id. at 72.


Third, in Diehr, the Court explained that while an abstract idea could not be patented, “an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” 450 U.S. at 187. The invention at issue in Diehr was a method for “molding raw, uncured synthetic rubber into cured precision products” using a mathematical formula and a computer. Id. at 177. This invention qualified as patentable subject matter under § 101 because it was not “an attempt to patent a mathematical formula, but rather [was] an industrial process for the molding of rubber products.” Id. at 192-93.

In the present case:

For the reasons provided below, claims 1-31 of the ’788 patent do not satisfy the patent-eligibility requirements of § 101.


Fort Properties disagrees, arguing that the claimed method of aggregating property, making it subject to an agreement, and then issuing ownership interests to multiple parties consists entirely of mental processes and abstract intellectual concepts. Fort Proper- ties counters that under Bilski, 130 S.Ct. at 3218, the invention’s intertwinement with deeds, contracts, and real property does not transform the abstract method into a patentable process.
We agree with Fort Properties. Indeed, the claims in Bilski were tied to the physical world through at least two tangible means: commodities and money. Id. at 3223-24. These ties, however, were insufficient to render the abstract concept of hedging patentable. See id. at 3231. We view the present case as similar to Bilski.

Bottom line

Because claims 1-41 of the ’788 patent attempt to cap- ture unpatentable abstract subject matter, they are invalid under 35 U.S.C. § 101. Therefore, we affirm the district court’s grant of summary judgment in favor of Fort Properties.


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