The Subject Matter of Patents II

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The Subject Matter of Patents II

• Class Notes April 8, 2003
• Law 677 Patent Law Spring 2003
• Professor Wagner

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Todays Agenda

• The Subject Matter of Patents The Supreme
  Courts most recent statements
• The Federal Circuits Response

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Statutory Subject Matter

• Diamond v Chakrabarty (1980)
• Claims
• 1 process of producing a bacterial organism
• 2 method of using a bacterial organism
• 3 the bacterial organism itself
• Why does the examiner allow 1 and 2 but not
  3?
• (Does this make practical sense?)
• As a matter of statutory construction, is a
  bacterial organism a composition of matter or
  manufacture?
• What does the Court suggest is the real issue
  here?
• So what is the rule of Chakrabarty? (What
  living things are patentable? Which are not?)

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Statutory Subject Matter

• Diamond v Diehr (1981)
• Claim process for curing synthetic rubber
  (includes the use of a formula)
• What is the rule of Diehr?
• Cannot patent mathematical formulas in the
  abstract?
• When a claim containing a mathematical formula
  implements or applies that formula in a structure
  or process which, when considered as a whole, is
  performing a function which the patent laws are
  designed to protect (e.g., transforming or
  reducing an article to a different state or
  thing), then the claim satisfies the requirements
  of 101.
• After Diehr, is software patentable? Business
  models?

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Statutory Subject Matter

• The Supreme Courts Approach
• Two categories of impermissible subject matter
• Living things
• What does the court mean by living things?
• See, e.g., Diamond v Chakrabarty
• Abstract ideas
• What does the court mean by abstract ideas?
• See, e.g., Diamond v Diehr
• What, if anything, do these categories have in
  common? Is 101 the right place to hang such a
  concern?

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The Federal Circuits Response

• In re Alappat (Fed Cir. 1994)
• What is the claimed invention?
• Is it an algorithm? (A mathematical algorithm?
  )
• What does the court say about the mathematical
  algorithm exception?
• Why does the court suggest this claim is
  patentable?
• Is this consistent with the rule of Diamond v
  Diehr?
• Why do you think the court places weight on the
  machine vs process distinction?
• The court suggests that software is easily
  patentable on pp 798-99. Do you agree with the
  reasoning? (Again, is this consistent with
  Diehr?)
• Consider the Archer dissent after Alappat, can
  you patent music? (How? Any problem with this?)

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The Federal Circuits Response

• State Street Bank (Fed. Cir. 1998)
• What is the claimed invention?
• What is the claim format? (Is this important?)
• The court considers two exceptions to statutory
  subject matter
• The business method exception
• The mathematical algorithm exception
• What is the test for this exception? (How does
  the calculation of share prices meet that test?)
• How does this differ from the analysis in
  Alappat? Is it closer -- or further -- from
  Diehr? What does the court say about
  transformations?
• Does the focus on whether the claim does
  something useful suggest anything about the
  scope of the 101 subject matter requirement?

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The Federal Circuits Response

• ATT v Excel (Fed. Cir. 1999)
• What is the claimed invention? (What is the
  claim format?)
• Why is this claim not subject to the 101
  exceptions?
• What was the ATT court trying to do in its
  lengthy discussion of the caselaw? (Do you agree
  with its conclusion?)

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Overview of Subject Matter Exceptions

• Two basic categories of exceptions
• Natural phenomena
• Living things e.g., natural organisms
• But see Chakrabarty, allowing non-natural
  (isolated, purified) living organisms to be
  patented
• Laws of nature e.g., Einsteins theory of
  relativity
• Basic theory of exclusion lack of novelty,
  concerns about overbreadth
• Abstract ideas
• Mathematical algorithms
• But see ATT/State Street, allowing useful
  algorithms to be patented
• Basic theory of exclusion concerns about lack of
  utility, overbreadth

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Why have Subject Matter Exceptions?

• Is there an affirmative case for more robust
  subject matter exceptions?
• Norms-based objections
• Industry custom (e.g., financial industry)
• Economic concerns certain technologies are
  better innovated without patents

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• Next Class
• Patent Economics II
• Approaches to the Patent System