It Is Time to Fix the Courts’ Section 101 Tests on ‘Directed to …’ and ‘Abstract Ideas’—Whether in Chamberlain or Beyond (Part II)

As we concluded in Part I of this article, the courts are being called upon in The Chamberlain Group v. Techtronic Industries, Inc to respond to an emergency situation in which they must stop the Federal Circuit’s “directed-to” version of the Mayo-Alice test from expanding into, and negating, claims in every subject imaginable.

As Chamberlain urges, the patent statute, whether in Section 101 or beyond, does not limit the universe of eligible claims to those where a court can dissect its claim elements into old or “conventional” ones and those that represent the claim’s “patentable advance.” On that point, too, the Patent Act and the Supreme Court have been in unison: You can’t do that.

In enacting the Section101 eligibility provision, Congress emphasized that patent protection is available to “anything under the sun that is made by man.” Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980); S. Rep. 1979, 82^nd Cong. 2d Sess., 5 (1952); H.R. Rep. No. 1923, 82^nd Cong., 2^nd Sess. 6 (1952)). Pursuant to its broad text, the Act’s threshold eligibility provision thus includes, without qualification, any “process” or “machine” (among other things) that can meet the statute’s separate requirements for patentability, e.g., that the claimed invention is new (“novel”), useful, and “non-obvious.” 35 U.S.C. § 101.

Supreme Court Precedent Bars Dissecting Claims for Section 101 Review

The Supreme Court’s precedent appears even more at odds with the Federal Circuit’s current Section 101 test and, more specifically, its “directed to” definition. As Chamberlain notes, of course the Federal Circuit’s opinions recite that they are not dissecting claims and confining their Section 101 review to the element directed to the “patentable advance.” But that is exactly what the court’s “directed to” definition and cases require and do, including in this case. See, e.g., Chamberlain, 2018-2103, at 5; Training Techs, 921 F.3d at 1384; Affinity Labs., 838 F.3d at 1257-58. And it is no excuse to say that some or even nearly all of those claim elements are conventional, meaningless, or don’t add anything to the claim. That, after all, is what the USPTO said in Diehr.

The Federal Circuit in Chamberlain Took the Same Approach as the USPTO in Diehr

There, the Court addressed the eligibility of a multi-step process for curing synthetic rubber. 450 U.S. at 177. As with the Chamberlain claims, the Diehr claims recited steps that used an ineligible abstract idea (the “Arhennius equation”) and a computer to implement it, “in conjunction with” multiple other claim elements or steps—e.g., steps for heating the rubber and determining the “amount of time” for opening the rubber mold. Id. at 177-78. As with the Federal Circuit in Chamberlain, the PTO in Diehr rejected the rubber-curing claims as ineligible. Id. at 178. And as in Chamberlain, the PTO in Diehr took the same dissection approach, finding that the equation steps “carried out by a computer” were ineligible—and thus couldn’t count for Section 101 consideration—while the other rubber-curing steps were merely “conventional” and “cannot be the basis of patentability.” Id. at 180-81.

The Court’s Diehr ruling rejected this Section 101 approach. For one thing, Diehr recognized that a “claim drawn to subject matter otherwise” eligible does not become ineligible “simply because it uses a mathematical formula” or other ineligible matter. Id. at 187. Indeed, Diehr rejected the notion that having even several [claimed] steps” or elements on ineligible matter would necessarily render the claim ineligible. Id. at 185.

Analyzing its then-recent case law, moreover, Diehr explained that a claim could prove ineligible if “in practical effect [the claim was] on [a] formula itself” or on [an] algorithm itself.” See id.; Parker v. Flook, 437 U.S. 584, 595 (1978) (claim is ineligible under Section 101 if claim is on or “directed essentially to” an ineligible category) (quoting In re Richman, 563 F.2d 1026, 1030 (CCPA 1977)). “In contrast,” Diehr’s multi-step claims for producing rubber products did “not seek to patent a mathematical formula or other patent-ineligible concept. Instead, they [sought] protection for a [multi-step] process of curing rubber:

[Diehr’s claimed] process admittedly employs a well-known mathematical equation, but they do not seek to pre-empt the use of that equation. Rather, they seek only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process [for curing rubber] …. Obviously, one does not need a “computer” to cure natural or synthetic rubber, but if the computer use … significantly lessens the possibility of “overcuring” or “undercuring,” the [claimed] process as a whole does not thereby become unpatentable subject matter.

Id. at 187; accord id. at 188 (court evaluating eligibility must consider a patent’s “claims … as a whole”). Accordingly, the Court concluded that Diehr’s claims were drawn not to an ineligible concept, such as a mathematical equation, but instead to an eligible “physical and chemical process for molding” and curing rubber products. 450 U.S. at 180, 184, 192-93.

Importantly, Diehr went on to hold that considerations of what claim elements “were well known and in common use” before the claimed invention—or whether those claims were “novel” or “non-obvious”—had “no relevance in determining whether the subject matter of a claim” was eligible under Section 101. Id. at 189-90.

The Supreme Court’s Precedents Require a Different “Directed To” Test

Diehr highlights why the Federal Circuit’s “focus of claimed advance” standard cannot stand. That confining test has no basis in the statutory text. The “claimed advance” part doesn’t either and, more than that, it specifically requires consideration of what the Court has long held has “no relevance” to Section 101: namely, invalidity or patentability considerations. E.g., Diehr, 450 U.S. at 189-90. Worse, the “focus” part of the Federal Circuit’s definition specifically adjudges the claim with the narrow focus of examining only the claimed advance—contrary to Diehr’s unqualified rule that courts must examine the claim “as a whole.” An issue of this importance with a standard this at odds with the Supreme Court’s precedents are reasons alone to grant certiorari in many instances. That the courts have been using Section 101 and this particular “directed to” test to wipe out, threaten, and discourage scores of patents and potential patent applicants and investors makes it all the more critical that the Court intervene. A patent emergency indeed.

The “Directed Essentially To” Standard Should Replace the “Focus of the Claimed Advance” Definition for Step One’s Test

On balance, however, the eligibility issue still needs a practical, more predictable, and duly narrow standard, consistent with the text of the Act and how the Supreme Court has long treated the issue. In our view, the formulation that meets these criteria is the “directed essentially to” test that the Supreme Court’s Flook decision favorably quoted and effectively used, and which the Court’s Flook, Bensen, and Diehr precedents all illustrate. E.g., Parker v. Flook, 437 U.S. 584 (1978) (holding claim-at-issue ineligible when it “would in practical effect be a patent on the [ineligible] formula … itself”); Gottschalk v. Benson, 409 U.S. 63, 72 (1972) (same); accord Diehr, 450 at 185 (emphasizing requirement to examine claim “as a whole”); accord id. (explaining that the Court’s precedents “stood for no more than” the “long established principle” that “[a]n idea of itself is not patentable.”). The Supreme Court’s 2012 Mayo decision, to be sure, recognizes that each of these precedents remains good law. See Mayo, 132 S. Ct. at 1298, 1302.

Unlike the Federal Circuit’s current test, the “directly essentially to” standard doesn’t invite comparisons to prior art or otherwise engage in some quick-and-dirty invalidity analysis, which is verboten on step one even in today’s Mayo-Alice regime. It would restore the requirement for viewing the claim “as a whole.” And it would properly calibrate the scope of these implied exceptions to the Court’s still duly approved precedents, including Flook, Diehr, and Benson, supra. In our view, it will help make s101 more consistent, predictable, and more likely to reduce the ambiguity and subjectivity that the case law currently permits. See, e.g., Wheeler v. Pilgrim’s Pride Corp., 591 F.3d 355, 363 (5th Cir. 2009) (addressing “how the law rules best by being predictable and consistent. It is predictability that enables people to plan their … conduct, that encourages respect for law … and its officials by treating citizens equally ….”).

The Courts Need to Define the Judicially Created “Abstract Idea” Exception.

The Federal Circuit’s “directed to …” definition alone warrants review. But the other issue in the case demands it too, namely, the ongoing lack of any set definition or standard for the judicially created “abstract idea” exception to Section 101. Remember, at its core, the Federal Circuit in Chamberlain held that a claim on a device such as a garage-door opener—a physical structure made of metal and plastic, with buttons and the usual technology (and then some) tucked inside—is ineligible for a patent because, in the eyes of the law, it’s just an “abstract idea” on “wireless” communications.

These rulings can undermine confidence in the law and the U.S. patent system. That is, combined with the Federal Circuit’s erroneous “focus-of-claimed-advance” test, the “abstract idea” exception permits findings that appear to blinker the obvious—e.g., that the physical device you’re holding in your hand is really just an abstract idea, not a physical, tangible item. But as Chamberlain notes, what could be less “abstract” than a claim on a physical garage remote control or (as the claim calls it) a “moveable barrier operator”—a device comprising the physical elements of a “controller,” a moveable-barrier “interface,” and a “wireless status condition data transmitter”? With a proper definition of abstract idea, the analysis at last would have a standard, making it more predictable and consistent generally, and consistent with the longstanding notion that the public and interested parties are entitled to know the law now and how it applies—and not have to find out later in a litigation itself. We join the strong commentary in years past that likewise urges, “It is Time to Define the Term ‘Abstract Idea,” G. Quinn, IP Watchdog, (May 18, 2017).

As Chamberlain Illustrates, the Lack of a Set “Abstract Idea” Definition Naturally Raises More Questions Than It Answers (or Avoids)

Using the Federal Circuit’s analysis, one might ask about the “wireless” element that the Chamberlain decision cited for so much of its ineligibility rationale. But as Diehr emphasized, that “wireless” element alone shouldn’t drive the Section 101 analysis, not when Diehr instructs that one must consider the claim “as a whole” and in view of the claim’s other elements, regardless of whether they’re considered conventional or abstract. Indeed, as in Diehr, supra, one can reasonably view the “garage-opener” claim as a “whole”–not as some abstract-sounding invention (as the Federal Circuit characterized it), but as an “improved garage remote” or even “improved garage remote” with “wireless” two-way communications. And all this properly applies to the step-one analysis, since Diehr focuses explicitly on that “abstract” or ineligibility step, disregards prior art and Sections 102-103 invalidity issues as not relevant and ignores mention of an inventive-concept test.

Further, without a judicial definition of “abstract,” we are left to ask why, for example, is the “wireless” feature for the Chamberlain opener necessarily related to anything “abstract”? Put aside the legalistic exercise of comparing claim language to whatever “abstract” cases that a Google search may yield. The short answer is that the wireless feature should probably count as much as any other physical feature for the claimed device, making the Section 101-eligibility conclusion here stronger, not weaker. The broader answer is that, without any readily available standard for “abstract,” courts and litigants remain free to employ it however they see fit.

If the Supreme Court Doesn’t Define an Abstract Idea, The Federal Circuit Can and Must

Accordingly, as the Supreme Court created the “abstract idea” as an implied Section 101 exception, it should now take the responsibility of defining it. It indeed is well past time to restore some definable boundaries to this analysis. And defining and interpreting terms, standards and boundaries generally is precisely what courts do, or should. As the Chamberlain case illustrates, not having such a definition for “abstract idea” after all these years only magnifies the frustration and unpredictability with the U.S. patent system.

In its current state, the “abstract law” exception has an appearances problem. Without delving into examples, courts appear to just adopt, sui generis, the list of constituent parts from a patent claim and the supposed list of long-known human activities as they go—matching it to whatever the particular judicial case or claim is at issue. And then they label it “abstract.” That may or may not be the correct conclusion in any given case. The larger point here is that, when the law behaves as the modern law, with a known standard or definition, the particular analyses and conclusions that follow bear not just the legitimacy of the test or standard itself, but of the fact that it resulted from such a “law” or principle (as opposed to a backed-up or reverse-engineered result).

So, break out the dictionary or cobble a standard or definition together from precedents that address the issue. In all events, define “abstract idea.” Make that the standard for the exception and apply it reasonably and based on what it means. And replace the Federal Circuit’s “directed to” definition with the “directed essentially to” standard discussed above. The garage-opener case has received its share of attention. But for the patent laws and the country, fixing these crucial tests will be the right attention that it needs to help end the state of a patent-system emergency. Otherwise, the sense of unpredictability and inconsistency will grow, the urge to use the U.S. patent system will dwindle, and U.S. innovation and economic vitalism will erode.