Five years ago, on Thursday, September 20, 2007, the United States Court of Appeals for the Federal Circuit issued two decisions that provoked much debate, and which deserve to be remembered. One the Court got right and, sadly, one the Court got excruciatingly wrong.
The first case, In re Comiskey, seemed rather straight forward and certainly not earth shattering, except perhaps for one issue – namely that the Federal Circuit issued its decision on patentable subject matter grounds without patentable subject matter ever being an issue during prosecution or on appeal.
In Comiskey, one set of claims were directed to the purely mental process of arbitrating a matter and deciding the outcome. The Federal Circuit did not waste time pointing out that arbitration is extremely well known and could hardly be considered patentably new or nonobvious, rather they cut to the chase and explained that the law does not allow patents to be issued on particular business systems that depend entirely on the use of mental processes, deciding that “the application of human intelligence to the solution of practical problems is not in and of itself patentable.”
The Comiskey matter was not, however, finished though because to this purely mental process the applicant added an all purpose computer, which apparently was supposed to transform an otherwise unpatentable process into a patentable invention. The Federal Circuit did acknowledge that “when an unpatentable mental process is combined with a machine, the combination may produce patentable subject matter,” but also stated that “the routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness.” Ultimately, however, the Federal Circuit was unprepared to reach a final determination on this point, which was reasonable given that it had never been raised at any point in the prosecution or appeal. Thus, because the Federal Circuit decided to use the Comiskey case for its own personal 101 agenda it was necessary to remand to the Patent Office for further consideration.
Ultimately, however, in 2009 the entire Federal Circuit acting en banc vacated the original panel decision and returned the case to the original panel. Comiskey did not fair any better though. The panel again issued a decision finding that the claims lacked patentable subject matter, but this time took time to specifically address whether there was authority for the Federal Circuit to decide the case on patentable subject matter grounds despite those never being raised previously. On this the Federal Circuit panel explained:
Over sixty years ago in Securities & Exchange Commission v. Chenery Corp., 318 U.S. 80 (1943), the Supreme Court made clear that a reviewing court can (and should) affirm an agency decision on a legal ground not relied on by the agency if there is no issue of fact, policy, or agency expertise.
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As Comiskey points out, some of our cases have concluded that “it is inappropriate for this court to consider rejections that had not been considered by or relied upon by the Board.” In re Margolis, 785 F.2d 1029, 1032 (Fed. Cir. 1986). But these statements referred to situations that required factual determinations not made by the agency… We decline to read these cases as rejecting the breadth of the Chenery decision on which they explicitly relied.
Despite the procedural aspects of Comiskey, the substantive patent law outcome of seems to be on steady ground, which is something that cannot be said for the second 101 decision issued on September 20, 2007.
In the other case of the day some five years ago, In re Nuijten, the Federal Circuit determined that a propagating signal cannot be patented because it is does not qualify as patentable subject matter. Of course, in order to reach this determination the two judge majority consisting of Judge Gajarsa and Moore, with Gajarsa writing for the majority, had to completely ignore precedent established in State Street and enter into mental gymnastics to explain what was said was really not meant.
In State Street the Federal Circuit explained that “[t]he question of whether a claim encompasses statutory subject matter should not focus on which of the four categories of subject matter a claim is directed to—process, machine, manufacture, or composition of matter—but rather on the essential characteristics of the subject matter, in particular, its practical utility.” Of course, in order to find that the signal at issue in Nuijten was not patentable the majority couldn’t be restricted by such language, particularly when being constricted by such language would have mandated a completely different outcome. Rather, the majority did exactly what State Street counciled against, and went item by item finding that a signal does not qualify as either a process, machine, manufacture or composition of matter.
Before proceeding it is worth knowing that Nuijten’s patent application disclosed a technique for reducing distortion induced by the introduction of “watermarks” into signals. Furthermore, Nuijten’s technique improves existing watermark technology by further modifying the watermarked signal in a way that partially compensates for distortion introduced by the watermark. Additionally, both Nuijten and the PTO agreed that the claims included physical, but transitory, forms of signal transmission such as radio broadcasts, electrical signals through a wire, and light pulses through a fiber-optic cable. Nevertheless, the majority still determined that the claims were unpatentable under 101 because transitory embodiments are not directed to statutory subject matter.
Frankly, I think the ruling in Nuijten can be simply summarized by saying that Judges Gajarsa and Moore didn’t understand the technology. They were treating signals as if they are some kind of black magic, rather than something concrete and tangible that can be created. It was as if they didn’t think there was anything there. If signals are so transitory in nature, there one minute and gone the next as if they never existed at all, why are so many Universities, researches and the United States Federal Government spending so much time and money hunting for signals from distant solar systems and galaxies? Obviously the best minds in the field believe that signals are there to be picked up and identified. Why? Because they do exist, at least for so long as the signal is being propagated.
The propagation of the signal clearly was not understood by Judges Gajarsa and Moore. Dissenting in part, Judge Linn took on the majority position that the signals of the claim were transitory, which is something that Gajarsa and Moore simply assumed. Linn wrote:
[T]he majority simply assumes, without reference to its own construction of the claim, that Nuijten’s signal is “fleeting.” Majority Op. at 16. The claim refers to multiple “samples,” one “preceding” the next, in a specified relationship. In conjunction with the specification’s references to “prediction” of a watermark bit’s effect on subsequent bits of the input signal and the invention’s preferred use for audio or video signals, it is apparent that the claimed signal must extend over some interval of time. In In re Hruby, 373 F.2d 997 (C.C.P.A. 1967), we held that it was not the dynamic position of any given water droplet, but rather the overall pattern, that was patentable; likewise, here, it is the overall signal, not the physical manifestation of a single bit, that constitutes the invention. Just as the design of a fountain lasts so long as the water is flowing, the signal lasts so long as the transmission of the signal is in progress. In many embodiments—for example, when the signal encodes an audio or video signal representing a symphony or a full-length motion picture that is being watched in real time—the transmission may be in progress for a significant period of time. And as the majority holds, the claim makes no assumptions about what physical form the signal might take. The claim therefore encompasses embodiments, such as inscriptions on paper, in which the signal itself may last indefinitely.
In my opinion it was ludicrous to create a distinction between transitory and non-transitory signals, or even suggest that a signal is transitory.
Further, Judge Linn determined that the signals at issue should be considered to most closely fall under the “manufacture” language of 101, and further explained that “it appears that rather than delineate specific, narrow categories, Congress has consistently intended statutory subject matter to cover the full scope of technological ingenuity, however it might best be claimed.” Thus, Judge Linn would have the patentable subject matter requirement of 101 actually protect technology moving forward, and the majority would have 101 protect only prior technologies that could fit into rigid pigeon holes identified in 101.
Call me crazy, but if patent law is supposed to foster innovation wouldn’t it be a good idea to protect innovation and not require it to be capable of description by categories that are generations old? So much for new technologies!
Thus, in baseball terminology, on September 20, 2007, the Federal Circuit went 1 for 2, which would put you on a sure path to enshrinement in Cooperstown, but is not what you would hope for when dealing with an area of patent law as fundamentally important as patentable subject matter.- - - - - - - - - -
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About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.