In re Bilski

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Eric E. Bensen

384 Euston Road South

Garden City, New York

(516) 486
-
2250

ericbensen@gmail.com


December 3, 2009

Suffolk County Bar Association

Intellectual Property Law Committee



In re Bilski

in the Supreme Court

With its grant of certiorari in the
In re Bilski

matter, the Supreme Court has again
decided to take up a fundamental issue of patent law, this time, the question of what
constitutes a patent eligible “process” under 35 U.S.C. § 101.

I.

Pertinent Statute

A.

35 U.S.C. § 101
: “
Inventions patentable. Whoever 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
con
ditions and requirements of this
title.” (Emphasis added.)

B.

In re Bilski

addresses only the meaning of “process.”

II.

Background

A.

Scope of § 101
.

1.

The statutory definition of patentable subject matter under
§

101 is
unquestionably broad,
see
,
e.g
.,
Diamond v.
Chakrabarty
, 447 U.S. 303, 309
(1980) (“
The Committee Reports accompanying the 1952 Act inform us that
Congress intended statutory subject matter to ‘include anything under
the sun
that is made by man.’”).


2.

However,
the Supreme Court has placed limits on t
hat scope holding that
abstract ideas, laws of nature, and natural phenomena, even if limited to a
specific field of use or inclusive of physical data gathering steps or post
solution applications, are not patent eligible.
Parker v. Flook
, 437

U.S. 584,
59
0 (1978) (“
The notion that post
-
solution activity, no matter how
conventional or obvious in itself, can transform an unpatentable principle into
a patentable process exalts form over substance.”)
;
Gottschalk v. Benson
, 409
U.S. 63, 67 (1972) (“
Phenomena of

nature, though just discovered, mental
processes, and abstract intellectual concepts are not patentable, as they are the
basic tools of scientific and technological work.”);
see also

Le Roy v. Tatham
,

14 How. 156, 175 (1853) (“
It is admitted, that a princ
iple is not patentable. A
principle, in the abstract, is a fundamental truth; an original cause; a motive;
these cannot be patented, as no one can claim in either of them an exclusive
right
.”).


2

3.

Distinguishing between patent

eligible processes and
unpatentable abstract
ideas or

laws of nature has always presented the courts with

difficult issues.
See
,
e.g
.,
Parker v. Flook
, 437 U.S. 584,

589 (1978) (“The line between a
patentable ‘process’ and

an unpatentable ‘principle’ is not always clear.”);
Risd
on

Iron & Locomotive Works
, 158 U.S. 68, 71 (1895) (“That

certain
processes of manufacture are patentable is as

clear as that certain others are
not, but nowhere is the

distinction between them accurately defined.”).

4.

The tension between the broad language
of section 101 and the Court’s
limitations of its scope is most frequently highlighted in cases involving the
patent eligibility of a process where the process is arguably nothing more than
a mathematical algorithm.
See
,
e.g
.,
Benson
, 409 U.S. at 67 (proc
ess for
converting binary
-
coded decimal numerals into pure binary numbers not
patent eligible).

B.

Contemporary Supreme Court Decisions Addressing Patent Eligibility


1.

Gottschalk v. Benson
, 409 U.S. 63 (1972) (“
Benson
”). The Court addressed
the patent eligib
ility of a

process for converting binary
-
coded decimal
numerals into pure binary numbers, which related to a general use computer,
but could be performed mentally using a mathematical table, and held that it
was not patent eligible because it was merely an

abstract idea.
Id.

at 64, 67,
71
-
72. Underlying the Court’s decision was the fact that the claim would
have preempted all uses of the algorithm and, thus, was drawn to the
algorithm itself.
Id.

71
-
72.

2.

Parker v. Flook
, 437 U.S. 584 (1978) (“
Flook
”). The Court addressed the
patent eligibility of
a mathematical algorithm to update “alarm limits” used in
a catalytic conversion process, which, although primarily useful for
computerized calculations, did not claim the use of a machine, and held it was

not patent eligible.
Id.

at 585, 590, 594.

3.

Diamond v. Diehr
, 450 U.S. 175 (1981) (“
Diehr
”). The Court addressed the
patent eligibility of a process for curing synthetic rubber products that
involved taking temperature readings during the process and
using
mathematical algorithm to calculate the time at which the rubber would be
properly cured.
Id.

177
-
179. The Court held that although several steps in
the claimed process were mathematical algorithms concerning the
recalculation of cure times, the p
rocess as a whole was patent eligible because
it involved the transformation of an article.
Id.

at 184
-
85.

4.

Machine
-
or
-
Transformation Test
. The
Benson
,
Flook

and
Diehr

decisions
support the conclusion that a claimed process is patent eligible if it is t
ied to a
particular machine or transforms a particular article into a different state or
thing. However,
Benson

and
Diehr

arguably differ as to whether that is the
only

standard for patent eligibility of a process.


3

a.

Benson

(1972): “Transformation and red
uction of an article ‘to a different
state or thing’ is the clue to the patentability of a process claim that does
not include particular machines. …
We do not hold that no process patent
could ever qualify if it did not meet the requirements of our prior
precedents
.” 409 U.S. 63, 70
-
71 (emphasis added)

b.

Diehr

(1981): “Transformation and reduction of an article ‘to a different
state or thing’ is the clue to the patentability of a process claim that does
not include particular machines.” 450 U.S. 175, 184
(quoting
Benson
, but
omitting the additional language highlighted above).

C.

The Federal Circuit’s Decisions in
State Street Bank
and

AT&T

1.

The
State Street Bank &
Trust Co. v. Signature Fin.

Group Inc.
, 149 F.3d
1368 (Fed. Cir. 1998) (“
State Street
”), and
A
T&
T Corp. v. Excel Comm
s
.

Inc.
,
172 F.3d 1352, (Fed. Cir. 1999) (“
AT&T
”)
decisions involved, respectively,
a
claim drawn to the implementation of an investment structure, called “HUB
and Spoke
®
,” whereby mutual funds could pool their assets in an investment
portfolio, and
a method for routing long distance telephone calls involving the
generation of a primary interexchange carrier indicator to be added to the
message records.
149 F.3d at 1370; 172 F.3d at 1353
-
54. The Federal Circuit
held both claims to be
patent eligible.

2.

However, language in each case suggested that in finding patent eligibility,
the Federal Circuit focused solely on whether the claimed method produced
some practical application rending it “useful,”
State Street
, 149 F.3d at 1375
(analys
is should focus on “practical utility”);
AT&T Corp.
, 172 F.3d at 1357
(analysis should focus on whether “
the mathematical concept has been
reduced to some practical application rendering it useful”),
arguably, a lower
threshold for patent eligibility than
that laid out in
Benson
,
Flook

and
Diehr
.

D.

Claim at Issue in
In re Bilski

1.

Bilski’s Claim
:

“A method for managing the consumption risk costs of a
commodity sold by a commodity provider at a fixed price comprising the
steps of:

a.

initiating a series of transactions between said commodity provider and
consumers of said commodity wherein said consumers purchase said
commodity at a fixed rate based upon historical averages, said fixed rate
corresponding to a risk position of said cons
umer;

b.

identifying market participants for said commodity having a counter
-
risk
position to said

c.

initiating a series of transactions between said commodity provider and
said market participants at a second fixed rate such that said series of

4

market parti
cipant transactions balances the risk position of said series of
consumer transactions.

2.

Summary Description
:
The claimed method is for hedging risk in the field
of commodities

trading. Under it, a provider of a

commodity, such as coal,
would initiate a

series of

transactions with consumers at a fixed rate to
insulate

them from higher rates that would result from a spike

in demand due
to unusually cold weather. The

provider would then initiate transactions with
coal

suppliers at a second fixed rate that

would insulate them

from lower
prices for coal that would result from a drop

in demand du
e to unusually warm
weather.

The

offsetting positions would then operate as a hedge for

the
provider against unusual demand for coal.

E.

The PTO’s Decision.
The PTO
rejected the
claim

on the grounds that (i) it was
not patentable as a “process” because it was neither tied to a machine nor
transformed physical subject matter into a different state or thing, (ii) it was
directed to an “abstract idea,” specifically, a ma
thematical algorithm, in the sense
that it preempted every possible way of performing the claimed steps, whether by
human, by machine or by any combination thereof, and (iii) it neither recited a
“practical application” nor produced a “concrete and tangibl
e result.”

III.

The Federal Circuit’s Decision

A.

En Banc Questions
.

The original Federal Circuit panel heard oral argument, but
did not issue a decision.

Rather, the court decided sua sponte to hear the matter
en banc. In doing so, it asked the parties to file
supplemental briefs addressing
five questions:

1.

Whether claim 1 [of Bilski’s] application claims patent
-
eligible subject matter
under 35 U.S.C. §101.

2.

What standard should govern in determining whether a process is patent
-
eligible subject matter under
Section 101?


3.

Whether the claimed subject matter is not patent eligible because it constitutes
an abstract idea or mental process; when does a claim that contains both
mental and physical steps create patent
-
eligible subject matter?


4.

Whether a method or pr
ocess must result in a physical transformation of an
article or be tied to a machine to be patent
-
eligible subject matter under
Section 101.


5.

Whether it is appropriate to reconsider
State Street Bank …

and
AT&T …

in
this case, and, if so, whether those cas
es should be overruled in any respect.




5

B.

En Banc Decision
, 545 F.3d 943

1.

Main Holdings

a.

The Machine
-
or
-
Transformation Test is the

Definitive


T
est for
Determining the Patent E
ligibility of a Process.


i.

The “definitive” test to dete
rmine whether a process c
laim i
s tailored
narrowly enough to encompass only a particular application of a
fundamental principle rat
her than the principle itself i
s to ask whether
(1) it is tied to a particular machine or apparatus
(“
Machine Prong
”)
or (2) it transforms a particula
r article into a different state or thing

(“
Transformation Prong
”)
.

545 F.3d at 954.

ii.

The machine or the transformation, assuming it provides meaningful
limits on the claim’s scope, provide
s

the specific application of the
fundamen
tal principle that distin
guish

the claim from a claim drawn to
the principle itself. 545 F.3d at 954.

b.

Bilski’s Claim Not Patent Eligible
:

i.

Machine Prong
: The claimed process was not tied to a machine. 545
F.3d at 962.

ii.

Transformation Prong
: The matters transformed by the process w
ere
merely “public and private legal obligations or relationships, business
risks, or other such abstractions,” which could not meet the
transformation part of the test because they were not physical objects
or electronic signals representative of physical

objects. 545 F.3d at
963.

2.

Other Holdings

a.

Apparent Conflict between

Benson

&
Diehr
.

The Federal Circuit noted
the apparent conflict between
Benson
, which appeared to treat the
Machine
-
or
-
Transformation Test as one way to establish eligibility, and
Diehr
, which appeared to treat the Machine
-
or
-
Transformation Test as
the

test for eligibility. It followed
Diehr

holding that the “governing test” for
patent eligibility where the claimed invention is a process is the Machine
-
or
-
Transformation Test. It noted

however, that it or the Supreme Court
may at some point modify or set aside the Machine
-
or
-
Transformation
Test to accommodate emerging technologies. 945 F.3d at 955
-
56.

b.

Field of Use Limitations
. The Federal Circuit noted that some may see a
tension betwe
en
Benson’s

apparent prohibition on wholesale preemption
of fundamental principles and the holding in
Diehr

that a mere field of use
limitation is not sufficient to establish eligibility
inasmuch a field of use
limitation would appear to prevent wholesale
preemption of a fundamental

6

principle. Resolving that tension, the Federal Circuit observed that
wholesale preemption of a fundamental principle is merely an indication
of patent ineligibility and that such preemption within a field of use may
equally ind
icate that the claim is not limited to a particular application of a
principle. In contrast
,

a claim satisfying the Machine
-
or
-
Transformation
Test does not preempt all uses of a fundamental principle in any field,
much less entirely. 945 F.3d at 957.

c.

Post

Solution Activity
.
Diehr

also held that “insignificant postsolution
activity” will not render unpatentable subject matter patent eligible. The
Federal Circuit viewed that rule as equally applicable to the Machine
-
or
-
Transformation Test in that the claim
ed transformation or machine must
constitute more than a mere insignificant postsolution activity to save a
claim from patent ineligibility. 945 F.3d at 957.

d.

State Street

&
AT&T
.

The Federal Circuit clarified that while a “useful,
concrete and tangible re
sult” may indicate whether the claim is drawn to
patent eligible subject matter, that inquiry by itself is insufficient to
resolve the question of eligibility and to the extent the pertinent portions of
State Street

and
AT&T

suggested otherwise, they shoul
d not be relied on.
945 F.3d at 959, 959 n.19.

e.

Business Method & Software Patents.

Consistent with its holding in
State Street
, where it
rejected the notion that a claimed invention
otherwise meeting the requirements of § 101

was nonetheless unpatentable
subject matter if it was properly characterized as a “business method,”

the
Federal Circuit refused adopt a categorical exclusion, such as for business
method or software patents, beyond those already adopted by the Court.
945

F.3d at 960, 960 n.23.

f.

Transformation Prong


Electronic Signals.
The court noted that “[t]he
raw materials of many information
-
age processes, however, are electronic
signals and electronically
-
manipulated data.” Rather than go so far as to
hold that th
e transformation of electronic signals or data by itself would
satisfy the transformation test, however, the court decided to adhere to the
“measured approach” taken in existing case law under which a claim
drawn to the transformation of electronic signals

that was, e.g., limited to
“a visual depiction that represents specific physical objects or substance”
would be patent eligible. In doing so, however, the court made it clear
that the transformation of a physical object itself was not a requirement of
th
e transformation test. 945 F.3d at 962.

g.

Machine Prong


Tying to a General Purpose Computer.

Because the
Bilski claim did not limit the claimed process to any specific machine, the
Federal Circuit declined to explore the contours of the machine prong of

the Machine
-
or
-
Transformation Test and, specifically, declined to address

7

the question of “whether or when recitation of a computer suffices to tie a
process claim to a particular machine.” 545 F.3d at 962.

C.

Subsequent Federal Circuit Decisions

1.

In re Ferg
uson
, 558 F.3d 1359, 1364
-
65 (Fed. Cir. 2009) (claim for method of
marketing a product, although nominally a “process,” not patent eligible
because it was not tied to a machine and did not transform a particular article
into a different state or thing).

2.

Pr
ometheus Labs., Inc. v. Mayo Collaborative Servs.
, 2009 U.S. App. LEXIS
20623, *22 (Fed. Cir. Sep. 16, 2009) (claim for method calibrating the proper
dosage of a particular drug, which method involved administering a drug to a
patient and then determining
the level of the drug’s metabolites in the patient,
satisfied transformation prong because of the transformative effect the
administration of the drug had on the patient’s body).

IV.

In re Bilski

at the Supreme Court

A.

Issue # 1:

Is the Machine
-
or
-
Transformation Test

the “determinative” test for
e
ligibility?

1.

Background

a.

The proposition that an invention is patent eligible if it is tied to a
particular machine or transforms particular article is well grounded.

i.

Origin of Machine Pro
ng.


The “machine” aspect of the particular test
traces

its origin at least to the

Court’s decision in
O’Reilly v.

Morse
, 56
U.S. 62 (1854).

See Tilghman

v. Proctor
, 102 U.S. 707, 726
-
727
(1881) (“
The eighth claim of Morse’s patent was held

to be invalid,

because it was . . . not for a process, but for a mere principle. It
amounted

to . . . a claim of the exclusive right to the use

of electro
-
magnetism as a motive power for

making intelligible marks at a
distance; that

is, a claim to the exclusive use of o
ne of the

powers of
nature for a particular purpose.
It

was not a claim of any particular
machinery,

nor a claim of any particular process for

utilizing the
power; but a claim of the power

itself
. . . .”) (emphasis added).

ii.

Origin of Transformation Prong.
The “transformation” aspect was
initially

expressed in
Cochrane v. Deener
, 94 U.S. 780 (1877), in

which the Court, after noting that the claims in issue

did not require
any particular configuration of

machinery, nevertheles
s held that a
patentable “process”

would include:


[A] mode of treatment of certain
materials to

produce a given result. It is an act, or a series

of acts,
performed upon the subject
-
matter

to be transformed and reduced to a
different

state or thing.”


8

b.

Simi
larly, the proposition that abstract ideas, laws or nature and natural
phenomena are not patent eligible is well grounded.
Gottschalk v. Benson
,
409 U.S. 63, 67 (1972) (“
Phenomena of nature, though just discovered,
mental processes, and abstract intellectu
al concepts are not patentable, as
they are the basic tools of scientific and technological work.”)
;

Le Roy v.
Tatham
,

14 How. 156, 175 (1853) (“
It is admitted, that a principle is not
patentable. A principle, in the abstract, is a fundamental truth; an
original
cause; a motive; these cannot be patented, as no one can claim in either of
them an exclusive right
.”).

c.

Thus, the Court is unlikely to hold either that a process that meets the
Machine
-
or
-
Transform Test is not patent eligible or that abstract idea
s, etc.
are. The Court’s focus is likely to be on the question of whether the
Machine
-
or
-
Transformation Test the
only

test for eligibility, as the Federal
Circuit held, or,
whether

a claimed invention that does not meet that test,
but is not an
abstract i
dea, law of

nature or natural phenomena,

can be

eligible and
,

if
so
, what the appropriate test

would be.


i.

As noted earlier,
Benson

and
Diehr
arguably conflict on this issue.

ii.

The problem for the Court is that the
Bilski

claim does not provide a
good example

of a claimed invention that does not meet the Machine
-
or
-
Transformation Test, but arguably should be patent eligible.
(Few
practioners appear to believe that it is more than an abstract idea.)
Thus,
Bilski

may prove to be a poor case for the Supreme Cou
rt to
further develop the test for eligibility.

2.

Arguments by the Parties

a.

Bilski

i.

The Machine
-
or
-
Transformation Test has no basis in § 101, which is to
be construed broadly.

ii.

Machine
-
or
-
Transformation Test conflicts with the Court’s precedent,
specifically,
Benson

and
Flook
, which both stated that a process may
be eligible
if it does not meet the Machine
-
or
-
Transformation Test.

iii.

There is no separate test for eligibility of process
es

(i.e., processes,
machines, compositions and manufacturers are to all be eva
luated
under the same standard).

iv.

There is no basis for the Machine Prong
.

v.

Requiring under the Transformation Prong that a physical article or
ch
emical be transformed make the p
rong unsuitable for modern
industry (cites to the
Dolbear v.

American Bell Tel.
Co.
, 126 U.S. 1,
534 (1888) (
the “
Telephone Cases
”)
).


9

vi.

Treating the Machine
-
or
-
Transformation Test as the “definitive” test is
contrary to the Court’s disinclination to adopt rigid rules in the patent
area (cites
Festo
,
eBay
,
KSR
)
.

vii.

The appropriate standard
is that a practical application of an abstract
idea, law of nature or natural phenomena is patent eligible.

b.

Government

i.

Section 101 protects industrial and technological processes and
excludes methods directed at organizing human activity.

ii.

Each of the four
statutory categories has been given “concrete”
definitions by the Court.

iii.

Diehr

summed up long line of cases construing “process” as used in
§

101.

iv.

The terms “process” and “art” have historically been understood to be
limited to industrial and technologica
l methods and to not include
fields of purely human activity. (“Science”, as used in Art. I, § 8,
referred to the field of general knowledge and learning, which
included finance and business, while the “useful Arts” referred to
technology and industry).

v.

T
he other statutory categories


manufacture, machine, and
composition of matter


involve technology and industry, which
supports the conclusion that “process” refers to technological and
industrial processes.

vi.

The Machine
-
or
-
Transformation Test provides an

effective means to
distinguish between industrial and technological process from other
processes.

vii.

The Machine
-
or
-
Transformation Test accommodates evolving
technology.

(a)

Software

(1).

The Machine
-
or
-
Transformation Test contemplates that many
forms of software inv
entions are patent eligible, either as
concerning a machine (i.e., a general purpose computer, which
becomes a “particular” machine when programmed to perform
the process steps) or transforming matter (the writing and
rewriting of electronic data represent
ed by magnetic changes in
the substrate of a hard disk or the altered state of transistors in
a memory chip).


10

(2).

(Software code by itself, uncouple from any storage medium or
computer, however, may be nothing more than an idea without
a physical embodiment.
)


(b)

Medical Diagnostic Techniques

(1).

E.g., transformation of blood occurring in assay step may
constitute a sufficient transformation.

viii.

With respect to “rigid” rules, the question of eligibility, which has
always been subject to concrete rule, is unlike the issues addressed in
Festo
,
eBay

and
KSR
; in any event, in each of those cases,

the Court
merely applied its ow
n precedent.

ix.

The practic
al application test does not sufficiently limit eligibility.

B.

Issue # 2:

Does the Federal Circuit’s holding contradict 35 U.S.C. § 273 by
barring, as a practical matter, patent protection for b
u
siness m
ethods?

a.

35 U.S.C. § 273, in essence, provides for a prior use defense to claims of
infringement of a business method patent.

b.

Bilski argues that the Federal Circuit decision, by effectively barring
business method patents as a practical matter, conflict with § 273
, which
implicitly recognizes that business method patents are patent eligible.

c.

The Government notes that Federal Circuit was careful not to create
categorical exclusion for business method patents and argues that while
the Federal Circuit’s ruling
may mak
e it difficult to get business m
ethod
patents as practical matter, as a legal matter, they are not barred and thus,
there is no inherent conflict between the Machine
-
or
-
Transformation Test
and statute.

C.

What will the Court decide?

The range of possibilitie
s may be characterized as
follows.

1.

Affirm decision in its entirety.

2.

Affirm decision while clarifying that the Machine
-
or
-
Transformation Test is
not the only test, but leaving it to lower courts to develop other tests if needed.

3.

Affirm decision while clarif
ying that the Machine
-
or
-
Transformation Test is
not the only test and holding that where patentee cannot meet Machine
-
or
-
Transformation Test, it may nonetheless establish eligibility by establishing
that the claimed process is more than abstract idea, etc.


4.

Affirm decision, but hold that a patentee/patent applicant need only
show that
the claimed process is

more than an abstract idea, etc. to establish eligibility.


11

5.

Overturn the decision (i.e., hold that
Bilski

claim is eligible as, e.g., a
transformation of

legal obligations).

D.

Other Issues

to Look for
:

1.

Transformation Prong
: Is the transformation of electronic signals and the
like a transformation of matter for the purposes of determining eligibility?

a.

In the Telephone Cases, the Court has recognized the

pate
ntability of
processes involving generation and

modification of electrical and other
forms of signals.

i.

One of Alexander Graham Bell’s claims involved in

those cases was
for a “method of and apparatus for

transmitting vocal or other sounds
telegraphically .

. .

by causing electrical undulations, similar in form to
the

vibrations of the air accompanying the said vocal or other

sounds .
. . .” 126 U.S. at 531. As described in the specification,

the invention
consisted “in the employment of a

vibratory or und
ulatory current of
electricity, in

contradistinction to a merely intermittent or pulsatory

current, and of a method of, and apparatus for,

producing electrical
undulations upon the line wire.”
Id.

ii.

In sustaining the patentability of the claimed

method porti
on of the
claim as an “art” or “process” (the

two words have historically been
used interchangeably

in patent law), independent of the particular
means or

device for creating them, the Court pointed out that the

generation of the electrical signals inheren
tly required

a transformation
from that which existed in nature:

“In this art


or, what is the same
thing under

the patent law, this process, this way of

transmitting
speech


electricity, one of the

forces of nature, is employed; but
electricity,

left to

itself, will not do what is wanted. The

art consists in
so controlling the force as to

make it accomplish the purpose.”

126
U.S. at 532.

b.

The Court’s holding that the Bell claim met the

statutory definition of a
patentable “useful art,” has been

repeatedly

cited with approval.
See
,
e.g
.,

Benson
, 409 U.S. at 68
-
69;
Expanded Metal

Co. v. Bradford
, 214 U.S.
366, 384, 385 (1909) (citing the

Telephone Cases, among others, to
illustrate the

breadth of processes that can be properly claimed by a

patent);
Risdon Ir
on & Locomotive Works

v. Medart
, 158 U.S. 68,
76
-
77
(1895)
(referring to the Telephone Cases as “the most

important case in
which a patent for a process was

considered”).

c.

Notably, however,
Bell’s

claim would not have

survived the
“transformation” test as
construed the Federal Circuit since the claim “did
not specify any particular

type of data; nor … specify how or from where

12

the data

was obtained or what the data represented;” nor provide

that the
signal being generated convey an image of a

physical objec
t.

i.

Examples of other patents that would not satisfy the Federal Circuit’s
standard for processes:

(a)

U.S. Patent No.

1,342,885 (
Armstrong), which disclosed the

process for converting radio signals that made FM

transmissions
feasible.

(b)

U.S. Patent No.
4,901,307 (Gilhousen), which, in claim 33,
claimed a fundamental

process for cell phone communication
comprised of

various steps for providing, converting and
transmitting

communication signals.

d.

There is no transformation of electric current or the like i
n the Bilski
claim, and therefore,
In re Bilski

does not necessarily give the Court a
basis to address the issue. However, were it to clarify that transformation
of electronic signals and the like is an eligible transformation
, the
Machine
-
or
-
Transformati
on T
est would be very broad, so much so that
even if it is not sole test, it may as a practical matter be the only test that
parties rely on in the foreseeable future.

2.

Machine Prong
: Is a general purpose computer a “particular machine”?

a.

The Federal Circui
t’s View

i.

As noted above the Federal Circuit highlighted the issue in
In re Bilski
,
but declined to resolve it because the Bilski claim did not recite the use
of a computer.

ii.

The Federal Circuit may have tipped its hand on the issue in its
In re
Comiskey
dec
ision, 499 F.3d 1365 (Fed. Cir. 2007), and revised
decision, 545 F.3d 967 (Fed. Cir. 2009).

(a)

In the original decision, the Federal Circuit remanded to the PTO
the question of “
whether the addition of general purpose computers
or modern communication devices

to Comiskey's otherwise
unpatentable mental process would have been non
-
obvious to a
person of ordinary skill in the art.
” 499 F.3d at 1380
-
81.

(b)

After
In re

Bilski
, the Federal Circuit ordered en banc that the
opinion be revised
,
89 U.S.P.Q.2D (BNA) 1641.

In the revised
opinion, the discussion of whether the claimed tied to a computer
was obviousness was deleted and replaced with:
“As to all of these
claims, which under the broadest reasonable interpretation recite
the use of a machine, we think that the

§ 101

question should be
addressed in the first instance by the PTO. We therefore remand to

13

the PTO to consider whether independent claims 17 and 46 (with
dependent claims 18
-
29, 31, 47
-
57, and 59) and dependent claims
15, 30, 44, and 58 recite patentable

subject matter under

§ 101.”
545 F.3d at 980.

(c)

If

the Federal Circuit
were of that view that tying a process to a
general purpose computer
was

sufficient to satisfy eligibility,
it is
unlikely that it would have remanded on the question because
once
the

PTO’s decision was again appealed, remand would
again

be
required

to
address the
original

question of obviousness.

b.

Additional Information about Machine Prong

i.

The “particular machine” aspect of the Machine
-
or
-
Transformation
Test was developed more than 150

years

ago as a way to satisfy the
Court’s concern that a patent

not be used to give the patentee exclusive
rights in a

fundamental principle (i.e., a law of nature, abstract idea

or
natural phenomena): where a process is tied to a

“particular” machine,
all other means of executing the

process remain open to the public
such that there is no

danger of giving one patentee exclusive rights in
natural

principle or a means of usefully employing such

principles that
he or she did not invent.

ii.

This concern
w
as in
itially articulated by the

Court’s holding in

O’Reilly v. Morse
, 56 U.S. 62 (1854), where the Court

rejected a claim
directed at the use of electro
-
magnetism, however created, for
imprinting intelligible

characters as not patent eligible.
Id.

at 120. The

r
ationale for this result, as expressed by the court, was

the need to
assure that the inventor’s patent was limited

to the process that he
invented and would not foreclose

others from inventing different, and
potentially superior

methods of accomplishing si
milar results.


Id
.

at
113.

iii.

Notably, there is no requirement that the

“particular machine” be novel
or specifically designed

for use in the claimed process.
Cf. Cochrane v.
Deener
,

94 U.S. 780, 788 (1876) (“The machinery pointed out as

suitable to perform
the process may or may not be new

or patentable;
whilst the process itself may be altogether

new, and produce an
entirely new result.”). Indeed,

section 100(b) of the Patent specifically
defines the term

“process” as including “a new use of a known
process
,

machine, manufacture, composition of matter, or

material.”
(Emphasis added.) Thus, there can be no requirement that a
“particular” machine be one specially

designed to carry out the
claimed process nor that it be

novel in itself.

iv.

Again, because the Bilsk
i claim does not recite the use of a computer,
the Court does not necessarily have a basis to address the issue.

14

However, were it to hold that the recitation of a general purpose
computer were sufficient to satisfy the Machine Prong, that prong
would be v
ery broad.


15

Biography

Eric Bensen

is a coauthor of
Milgrim on Trade Secrets

(Matthew Bender)
and
Milgrim on Licensing

(Matthew Bender)
, two leading intellectual property treatises, and
Bensen & Myers

on

Litigation Management
(LexisNexis 2009), a
groundbreaking new
book that sets forth a sophisticated, but easy to implement methodology for effective and
efficient management of even the most complex litigations. He advises clients on
complex intellectual property and litigation management issues.

M
r. Bensen has taught patent, copyright, and intellectual property licensing
classes as a Visiting Assistant Professor of Law at Hofstra University School of Law.
Earlier in his career, Mr. Bensen was in practice for more than 12 years with Paul,
Hastings,

Janofsky & Walker LLP and Dewey Ballantine LLP. During that time, he led
attorney teams in successful litigations of highly complex patent and trade secret cases
before the International Trade Commission and a wide range of intellectual property
cases in

federal and state courts throughout the country. He also negotiated sophisticated
copyright, patent and trademark licenses both here and abroad and advised clients on
intellectual property licensing issues arising in large transactional matters. His cli
ents
included technology, pharmaceutical, medical device, agricultural, entertainment and
consumer product companies.

He was
nominated by corporate counsel as one of the
leading lawyers in the United States in both intellectual property and litigation in
Legal500’s 2007 surveys
.


In addition to other writing, Mr. Bensen has authored or co
-
authored of a number of
scholarly articles on intellectual patent law, including
, Eric E. Bensen & Danielle M.
White,
Using Apportionment to Rein in the Georgia
-
Pacific
Factors
, 9
C
OLUMBIA
S
CI
.

&

T
ECH
.

L.

R
EV
. 1 (Fall 2007), Eric E. Bensen,
Apportionment of Lost Profits in
Contemporary Patent Damages Cases
, 10
V
A
.

J.L.

&

T
ECH

8 (2005), and other articles
appearing in the
Hofstra Law Review
, the
Federal Circuit Bar Journal

and the
Los
Angeles Daily Journal
. He
regularly writes Expert Commentaries for LexisNexis on
significant intellectual property decisions and emerging issues in intellectual property law
such as
, “
Eric E. Bensen on the Federal Circuit’s Landmark Decision
Regarding the
Patent Eligibility of Process Claims Under 35

U.S.C. §

101:
In re Bilski
, 2007
-
1130
(Fed. Cir. Oct. 30, 2008).”



Mr. Bensen regularly speaks on intellectual property issues. Among other
engagements, he
spoke at the European Patent Lawyers

Association’s (“EPLAW”)
Congress in Brussels in 2007 to provide expertise on U.S. patent damages law in
connection with EPLAW’s consideration of Article 13 (Damages) of the Directive
2004/48/EC of the European Parliament and of the Council of 29 April 200
4 on the
Enforcement of Intellectual Property Rights. He has also spoken on intellectual property
matters before the New York State Bar Association Intellectual Property Section, the
Patents Committee of the Bar Association of the City of New York and Inte
llectual
Property Owner’s Association Licensing Committee. In early 2009, he was a featured
speaker for the LexisNexis Webinar, “Software Patents after
Bilski
.”



16

He is admitted to the bar of the State of New York, the United States Supreme
Court, the Unit
ed States Court of Appeals for Federal Circuit and the District Courts for
the Southern and Eastern Districts of New York. He received his J.D. in 1996 from
Hofstra University School of Law where he was an associate editor of the
Hofstra Law
Review
.