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What is Patent Eligibility: The Role of the Judiciary

By Russell Pigg

The United States Supreme Court rulings of recent decades have impacted how the United States Code is applied on patent eligibility. Patent eligibility is different from patentability.

Eligibility is the subject matter that is in a category that can even be considered for a patent. Eligibility is a hot button topic, with different opinions over what should and should not be eligible.

According to 35 U.S.C. § 101, “[w]hoever 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.”[1] This section of 35 U.S.C. is the baseline for what can be eligible for a patent. 

The Supreme Court has added to the matter of eligibility with several different rulings. 

Back in 1980, The Supreme Court heard the case Diamond v. Chakrabarty, in which the Supreme Court ruled a live, human-made organism a patentable subject.[2]

In the majority opinion, Justice Burgman wrote that the creation of a new bacterium constitutes a patentable "manufacture" or "composition of matter”, opening up the door for wider patent eligibility with these expansive and broad terms.[3]

The next year in 1981 in Diamond v. Diehr, James Diehr created a computer program to improve a rubber curing press.[4]

He applied for a patent but was rejected on the basis that he simply combined the conventional rubber curing press with an unpatentable computer program.

Diehr appealed to the Supreme Court and they ruled that a machine which transforms materials physically under the control of a programmed computer is patent eligible, ruling in favor of Diehr.[5] The Diamond v. Diehr case opened up the door for patent eligibility of computer programs.

Many years later in 2010, in Bilski v. Kappos, the Supreme Court wrote that the machine or transformation test, where an invention must be tied to a particular machine or apparatus or transform a particular article into a different state, was not wrongly used by the Federal Circuit for patent eligibility, however, the machine or transformation test is not the sole test for determining patent eligibility as the Federal Circuit wrote.[6]

The Supreme Court also wrote that “business methods” are not entirely excluded from patent eligibility.[7] 

In the majority opinion written by Justice Kennedy, he outlined four unique categories for patent eligible subject matter: processes, machines, manufactures, and compositions of matter[8].  In the Bilski case was the first mention of the judicial exceptions, including an abstract idea.

In 2012, the Supreme Court heard the Mayo case, in which Prometheus Laboratories Inc. had a patent on a diagnostic for correct drug dosage levels.[9]

The Mayo Clinic used a similar diagnostic for their drug dosages and was sued by Prometheus Labs.[10]

The appeal went to The Supreme Court where the justices ruled that a patent cannot be eligible if the claim is merely an instruction on applying a law of nature, natural phenomena, or an abstract idea.[11] These are called the judicial exceptions to a patent.

The Supreme Court stated that “[f]or all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.”[12] For a judicial exception to receive patent eligibility, the exception must be used in a practical application.[13]

The test that Prometheus Labs had created simply instructed on how to execute a natural process, and thus was not patent eligible.[14]

An abstract idea was not clearly defined or laid out by the Supreme Court in this case, leaving lots of interpretation for future cases and for the USPTO examiners to correctly apply the case ruling.

Next came the Assoc. for Molecular Pathology v. Myriad Genetics[15] case in 2013, which dealt with the patent eligibility of natural products.

Myriad Genetics had a patent on the BRCA1 and BRCA2 genes, which when identified are a big indicator of future breast and ovarian cancer[16].

Myriad isolated the genes, and then received a patent on the isolated genes.

With the patented gene, Myriad obtained the sole rights of diagnostic testing and research.

The issue was brought before the Supreme Court with the petitioners arguing that Myriad had no standing for the patents as the genes are a product of nature and the patents limit scientific development.

The Supreme Court ruled that naturally occurring gene sequences, and their natural derivative products, are not patent eligible, but newly created genes can be patented[17].

Something new must be created. The lack of anything new made Myriad’s patent ineligible as the BRCA1 and BRCA2 genes were products of nature, and not created by Myriad, just isolated[18]. 

A very significant case regarding patent eligibility, primarily for software and business methods, came in 2014 with Alice Corporation v. CLS Bank International[19].

Alice Corporation held 4 different patents regarding a computerized trading platform[20].

Alice patented the software that would help minimize settlement risk by using a third party as a guarantor[21].

The Supreme Court ruled that these patents were just building blocks of human ingenuity and were abstract ideas[22].

Using a third party to eliminate risk in settlement is a fundamental and common business practice, combining a common business practice with a basic computer is not enough to move the common practice from an abstract idea to a patent eligible invention[23].

The Supreme Court created a two-step test with this ruling[24].

Step one is whether a claim is directed at a patent-ineligible subject such as an abstract idea, and step two is whether the claim is an inventive concept[25].

Some of the claims in Alice had clear, tangible hardware and were ruled to be abstract.

Before Alice, few software patents would get challenged, but following the case, challenges became very common.

The Supreme Court has not heard a patent eligibility case since Alice.

Since Alice many patents in a wide-range of technologies, including network-controlled electric car charging stations and garage door openers, were found to be abstract, such as in the Federal Circuit cases ChargePoint, Inc. v. SemaConnect, Inc. and The Chamberlain Group, Inc. v. Techtronic Industries Co., respectively[26].

These are two examples of many similar cases that have been ruled abstract following Alice. What constitutes an abstract idea has not been clearly defined by the court system.

With the ruling of Alice, patenting crucial innovations such as artificial intelligence, machine learning, and data science innovations are harder today.

In 2019, the USPTO sent out guidelines giving three categories of abstract ideas: mental processes, mathematical concepts, and methods of organizing human activity[27].

With these categories, to get a patent, you need to apply them practically into a unique invention.

These guidelines were to help USPTO employees with patent applications and have a more uniform approach to be able to apply the previous court cases.

However, in the case Cleveland Clinic Foundation v. True Health Diagnostics[28] the Federal Circuit ruled that they are not bound by the guidelines published by the USPTO.

The previous rulings of the Supreme Court and Federal Circuit take precedent over these guidelines put out by the USPTO and the courts have the final say over the USPTO, with the Federal Circuit writing “[w]hile we greatly respect the PTO's expertise on all matters relating to patentability, including patent eligibility, we are not bound by its guidance.”[29]

The guidelines were not created by the court and are not in line with previous rulings.

To many, the definition of an abstract idea is seemingly unclear and uncertainty looms over exactly how the Federal Circuit will rule in these patent eligibility cases.

Following Alice and subsequent cases, filing a patent may be more intimidating or uncertain, but with the help of an experienced attorney, filing is still a workable process.

[1] 35 U.S.C. § 101.

[2] Diamond v. Chakrabarty, 447 U.S. 303 (1980)

[3] Id.

[4] Diamond v. Diehr, 450 U.S. 175 (1981)

[5] Id.

[6] Bilski v. Kappos, 561 U.S. 593 (2010)

[7] Id.

[8] Id. at 6

[9] Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012)

[10] Id.

[11] Id. at 9

[12] Id. at 9

[13] Id. at 9

[14] Id. at 9

[15]  Assoc. for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013)

[16] Id.

[17] Id. at 15

[18] Id. at 15

[19]  Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014)

[20] Id.

[21] Id at 19

[22] Id. at 19

[23] Id. at 19

[24] Id. at 19

[25] Id. at 19

[26] ChargePoint, Inc. v. SemaConnect, Inc., No. 18-1739 (Fed. Cir. 2019) and Chamberlain Group, Inc. v. Techtronic Industries Co. Ltd., No. 18-2103 (Fed. Cir. 2019)

[27] The United States Patent and Trademark Office. (2019). Manual of Patent Examining Procedure (MPEP) Ninth Edition. Retrieved from Manual of Patent Examining Procedure (uspto.gov)

[28] Cleveland Clinic Foundation v. True Health Diagnostics. LLC, No. 16-1766 (Fed. Cir. 2017)

[29] Id.