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One Year Post-Bilski: How the Decision is Being Interpreted

Written by:
Michelle K. Holoubek
Sterne, Kessler, Goldstein & Fox P.L.L.C.
Director in the Electronics Group
Posted: June 29, 2011 @ 5:27 pm
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Justice Kennedy delivered the opinion of the Court in Bilski v. Kappos.

This week marks the first anniversary of the Supreme Court issuing its decision in Bilski v. Kappos. The decision held that the machine-or-transformation test is not the exclusive test for patent eligibility, and that the three traditional exclusions of natural phenomena, abstract ideas, and laws of nature still apply.

Since that time, 182 decisions involving statutory subject matter eligibility have been issued by the USPTO’s Board of Patent Appeals and Interferences (“the Board”). District Courts issued 6 decisions in the past year that substantively addressed statutory subject matter under § 101, while the Federal Circuit issued 3 decisions on the subject. The day after Bilski issued, the Supreme Court denied cert in In re Ferguson, and just recently picked up Mayo Collaborative Servs. v. Prometheus Labs for review.  See Supreme Court Accepts Appeal on Patented Medical Diagnostics.

I recently joined with my colleague Rob Sterne to draft a resource document that summarizes each decision that substantively discusses statutory subject matter under § 101 – from the Board and the Courts. Although the Board decisions are not precedential, they offer insight into what patent practitioners can expect in their own appeals. Similarly, both reported and unreported cases from the District Courts and Federal Circuit are provided to round out the statutory subject matter landscape. Section (I) outlines Board cases where the claims were found to be statutory. Section (II) outlines Board cases where the claims were found to be non-statutory. Section (III) provides a look at activity in the Courts. Download the full document here, and take advantage of its text searching capabilities as well.

Some trends from the Courts worth noting:

(1) The District Courts appear to be very strict when reviewing statutory subject matter – out of the 6 District Court decisions that addressed § 101, only 2 found that the claims at issue were patent-eligible under § 101.

(2) The Federal Circuit has offered some relief for patent owners. Out of the 3 Federal Circuit decisions that addressed § 101, 2 found that the claims at issue were patent eligible.

(3) The Supreme Court is staying close to the patent-eligibility issue, having granted cert in the Prometheus case on appeal from the Federal Circuit.

Some trends from the Board worth noting:

(1) The number of decisions where the claims were held by the Board to be nonstatutory under §101 significantly outweighs the number of decisions where the Board found that the claims satisfied §101. There are about 2.5 non-statutory decisions for every 1 statutory decision.

(2) It is not unusual for the Board to raise a §101 rejection on its own, even if patent eligibility was not a subject on appeal, and was not briefed.

(3) The Board still relies heavily on the machine-or-transformation test, although it does look at other factors as well. For most claims that satisfied the machine-or-transformation test, the Board has found them to be patent-eligible without further analysis.

(4) Although it is not an official test, the “mental steps” doctrine rings true – if the claims can be performed purely in the human mind, then they will be non-statutory.

(5) Even if the specification is silent as to whether a computer readable medium can be read on a signal, the Board will likely read a signal into a claim reciting a computer readable medium, rendering it non-statutory.

(6) The panel of judges assigned to a particular appeal matters. As can be seen from the following, several of the Board judges rarely find a claim patent-eligible, and often raise previously non-existent §101 rejections.

(7) There are no guarantees. Similar claims have been treated differently by different panels, and some BPAI judges appear inconsistent in applying the law to seemingly similar claims.

For more information and a summary of each of the cases decided over the last year please see §101 Case Summaries v. 2.0: June 28, 2010 – June 27, 2011.

EDITOR’S NOTE: This summary of cases prepared by Attorney Holoubek is excellent!  It is absolutely must reading for attorneys prosecuting and litigating in this space.

About the Authors

Michelle K. Holoubek (holoubek@skgf.com) is a director in the Electronics Group of Sterne, Kessler, Goldstein & Fox P.L.L.C. The views expressed herein are those of the author and should not be attributed to former, present or future clients or any employees of Sterne, Kessler, Goldstein & Fox P.L.L.C.


6 comments
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  1. Boy, a superb resource indeed; a real keeper.

    Thank you both for all your time and effort; and you Gene for providing the “means of distribution.” :-)

    Steve

  2. Michelle,

    Your findings relative to subsequent cases interpreting Bilski (other than some of the Federal Circuit decisions) support my concern that patent-eligibility under 35 USC 101 is being applied too stringently and potentially subjectively (not objectively). That’s because SCOTUS’ Bilski decision does very little to offer concrete guidance on how to determine when the claimed invention is an “abstract idea.” Rader’s decision in Research Corp. Technologies speaks volumes about this problem with SCOTUS’ decision in Bilski: “[T]his court also will not presume to define “abstract” beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act.” As Rader’s statement hints at, and what I’ve suggested previously, the courts should be straining the claimed subject matter initially through 35 USC 112, first paragraph, not 35 USC 101. to assess whether the claimed invention is “abstract” or not.

  3. (1) The cases looked at today are 2-4 years old, not surprising that many of them don’t meet Bilski (either of the Fed. Cir. or SCOTUS variety).

    (2) Gene – if you want to learn how the BPAI is gaming the system on this one, let me know and I’ll contact you offline.

    (3) The BPAI says it looks at other factors, but it really doesn’t.

    (4) Most examiners using the “mental step” test don’t realize that a direct connection between the human brain and computer is necessary in many of the rejections I’ve seen – I’m sure the BPAI is similar.

    (5) Based upon conclusory claim constructions.

    (6) see (2)

    (7) The magic of Bilski – a total non-event of a Supreme Court cases that provided very little guidance as to issues involving 101.

    As to point (2) regarding the Federal Circuit, Research Corp. Tech., Inc., v. Microsoft Corp was issued by the Federal Circuit on December 8, 2010. This was the decision in which the Federal Circuit stated that a method claim, which did not include an explicit recitation of a machine, was still statutory subject matter.

    How many times has this decision been cited by the BPAI in the mean time? Just once, immediately after it was issued, and was used to affirm a rejection under 101. The BPAI is biased – grossly biased. There are no two ways about it.

  4. Thanks for this report, and the comments.
    The one thing the Sup. Ct. in Bilski did actually decide was that Bilski’s own claims were unpatentably “abstract.” [Without any clue as to why, or what “abstract” means.] So I’m curious if any of these subsequent 101 rejections have been based on just saying something like: “the subject claims are similar to the claims confirmed as unpatentable by the Sup. Ct. in Bilski”?

  5. JV,

    I can confirm you observations from personal experience. The Examiners/Board either don’t understand Bilski (and how could they from the worthless guidance from SCOTUS on what an “abstract idea” is), or, more likely, off on theire own “frolic and detour” when it comes to patent-eligibility under 35 USC 101.

    My personal experience relates to method claims that were rejected under 35 USC 101 by an Examiner under the MOT test. When I pointed out to the Examiner that SCOTUS said in Bilski that the MOT test wasn’t the only basis for determining patent-eligibility, I was basically told that, unless I satisfied the MOT test (meaning adding mechanical structure to the method claims), the Examiner couldn’t drop the 35 USC 101 rejection based on the “policy” in her group. My client wasn’t interested in (and didn’t want to spend the bucks on) challenging this nonsense on appeal, so I added the requested “mechanical structure” to the method claims. Chalk another one up to the arbitrary and capricious nature of how patent-eligibility is currently judged under 35 USC 101.

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