Posts Tagged: "patentable subject matter"

On May 15, the Chamberlain Group Inc. filed a petition for a writ of certiorari asking the U.S. Supreme Court to review the U.S. Court of Appeals for the Federal Circuit’s (CAFC) decision reversing a district court’s holding that Chamberlain’s claims covering a “moveable barrier operator” were patent-eligible under Section 101. If the Supreme Court grants review, it will consider whether the Federal Circuit “improperly expanded § 101’s narrow implicit exceptions by failing to properly assess Chamberlain’s claims ‘as a whole,’ where the claims recite an improvement to a machine and leave ample room for other inventors to apply any underlying abstract principles in different ways.”

The Federal Circuit recently found that a method for preparing an extracellular DNA fraction from a pregnant human female and using it for analyzing a genetic locus involved in a fetal chromosomal aberration was not directed to a natural phenomenon, and thus eligible for patenting. Illumina, Inc. v. Ariosa Diagnostics, Inc., No. 2019-1419 (Fed. Cir. March 17, 2020) (“Illumina v. Ariosa”). The decision includes a dissent. Appreciation of the reasoning of both the Majority and the Dissent is essential to understanding the current state of the debate on subject matter eligibility of processes involving natural phenomenon. The all-important question in such cases centers on how to determine whether such an invention is directed to a judicial exception. Stated differently, when does an invention that uses a natural phenomenon turn into a patent-eligible process rather than being directed merely to the natural phenomenon?

Amid the crush of patent-eligibility case law, see 35 U.S.C. §101, patent lawyers and even courts can lose sight of the key principles and precedents that serve as the foundation of the eligibility analysis. Or they may not have appreciated in the first place the underlying bases for these §101 cases and whether, for example, those cases accord with precedents they cite from decades before. In any event, this article addresses these foundational Supreme Court precedents for §101 and the Mayo-Alice ineligibility regime that dominates the patent landscape today. In particular, we trace the Court’s precedents from nearly 50 years ago, with an emphasis on key cases separated by some 30 years but tied together by the Court’s representation that it has faithfully followed (and not overruled) any such precedent. After analyzing the precedent in this light, with due emphasis on the Supreme Court’s decisions in Diamond v. Diehr, 450 U.S. 175 (1981) and Mayo Collaborative Servs. v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012), the article briefly examines the U.S. Patent and Trademark Office’s 2019 Patent Eligibility Guidance on §101—the Article II branch’s response to the §101 sea change wrought by the Article III courts. Finally, based on these authorities, the article offers a mix of points and observations for patent litigators and judges to consider as they continue to shape §101’s eligibility law.

The mathematics exception for subject matter eligibility is overbroad because it was improperly justified under the premise that mathematics is like a law of nature. This is absurd because mathematics is everywhere, and excepting mathematics means excepting virtually everything. Recent court decisions declare that “[m]athematical calculations and formulas are not patent eligible,” SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161 (2018)(“SAP AM.”), based on older decisions, such as Parker v. Flook, 437 U.S. 584 (1978) (“Flook”) and Gottschalk v. Benson, 409 U.S. 63 (1972) (“Benson”).

The USPTO’s Update on Subject Matter Eligibility of October 2019 (“OCT2019 PEG”) states, “The 2019 PEG defines ‘mathematical concepts’ as mathematical relationships, mathematical formulas or equations, and mathematical calculations,” and “where a formula or equation is written in text format that should also be considered as falling within this grouping.” This means that one can have a mathematical concept without even writing any mathematics. The USPTO can assert this illogical and absurd statement because the justification for the underlying mathematical exception itself is also illogical and absurd.

To the surprise of Lemley and Zyontz, their study uncovered a striking disparate treatment in the way federal courts handle patent eligibility matters based on entity size, with startup companies doing poorly when it comes to Alice-related patent eligibility matters, and individual inventors doing even worse. Their abstract summarizes their findings thusly: “Most surprisingly we find that the entities most likely to lose their patents at this stage are not patent trolls but individual inventors and inventor-started companies,” Lemley and Zyontz write. “As biotech worries about deterrence of new innovation and software worries about patent trolls dominate the debates, we may be ignoring some of the most important effects of Alice.”

Today, like so much of the rest of the world, the United States is faced with many shortages due to the coronavirus pandemic, including personal protective equipment, basic medical supplies, and qualified medical staff. Of course, the lack of treatments or vaccine is a huge problem. Another secular problem is the lack of a quick, inexpensive, reliable test for the virus. But a test for the virus is a diagnostic method, and that is a big problem for U.S. patent laws because diagnostic methods are simply not patent eligible in the United States. This is also a big problem for the world because ever since the veil of patent eligibility was lifted for the life sciences sector in 1981 by the U.S. Supreme Court in Diamond v. Chakrabarty, the U.S. has dominated the biotechnology sector, specifically, and life science sectors more generally speaking. In 1981, the Supreme Court opened the floodgates saying that what was created by man could be patented, and if it could be owned it could be invested in, and investors rushed in and the biotechnology industry that we know today was born. But what the Supreme Court gave they can, and ultimately did, take away.

Things are bad for many innovators and there is little hope for improvement on the foreseeable horizon. Despite the best efforts of Senator Thom Tillis (R-NC) and Senator Chris Coons (D-DE), efforts to reform America’s patent system for the better have stalled to the point that the Senate IP Subcommittee is moving on from patent matters and will focus on copyright reform throughout 2020. “Given the reasonable concerns that have been expressed about the draft as well as the practical realities of the difficulty of passing legislation, absent stakeholder consensus I don’t see a path forward for producing a bill—much less steering it to passage—in this Congress,” Senator Tillis told the Intellectual Property Owners Association in an interview published earlier today. Sources tell IPWatchdog that it is not inconceivable that the Subcommittee will steer back toward patent issues – namely patent eligibility reform – but disagreement among the interested constituencies has shelved any hope for patent eligibility reform. Shockingly, the disagreement that has shelved the long-awaited legislative fix for 35 U.S.C. 101 is among those who support reform. It seems the various constituencies that want 101 reform have their own demands and – if you can believe it – would prefer no change to a change that doesn’t give them 100% of what they are seeking.

The U.S. Supreme Court today denied two petitions for certiorari filed by Trading Technologies and one by ChargePoint, Inc. asking the Court to review their cases related to the patent eligibility of their inventions. Trading Technologies’ inventions relate to graphical user interface tools, while ChargePoint’s invention is for a vehicle charging station. The denials are not surprising following the High Court’s refusal to allow a number of other petitions dealing with Section 101 earlier this month, including Athena Diagnostics v. Mayo Collaborative Services and HP Inc. v. Berkheimer. Athena was thought to have the best chance of being granted, especially after the United States Office of the Solicitor General (SG) in December weighed in on the petition in Hikma Pharmaceuticals v. Vanda Pharmaceuticals, recommending against granting cert in that case in favor of hearing one like Athena instead.

When discussing patentable inventions with data scientists, I often hear them dismiss their inventions under arguments such as these: “We’re using the same tools as everyone else,” “Augmenting data for the training set is well known,” “A similar thing has been done for car-bumper design” (said by the designer of a churro-making machine), “Configuring the neural-network hyperparameters is trivial,” and worst of all, “It’s obvious.” Data scientists often believe that their accomplishments are not patentable, but in-depth exploration of their work often uncovers patentable ideas. I am referring to data scientists that use machine-learning (ML) tools to uncover intrinsic relationships within a large corpus of data. Other data scientists design and improve these ML tools, and their work may also result in patentable ideas, which is a topic for discussing another day.

Yesterday was a dark day for patent eligibility in America. The United States Supreme Court denied certiorari in five more petitions relating to patent eligibility challenges. Based on our count, this brings the total number of patent eligibility petitions denied by the Supreme Court to at least 48, since the Court issued its controversial, if not catastrophic, decision in Alice Corporation vs. CLS Bank, 134 S.Ct. 2347 (2014). Obviously, the Supreme Court is perfectly comfortable with the status quo as it pertains to the law of patent eligibility. This reality evokes myriad emotions, ranging from despair to outrage to resentment to cynicism to exasperation and finally to a begrudging acceptance. Even with Justice Gorsuch hiring clerks with an intellectual property background – an extreme rarity at the Supreme Court – there seems to be no willingness or desire to clean up the mess this Court created when it ignored the doctrine of stare decisis, several generations of well-established law, and the 1952 Patent Act itself, which had been interpreted by the Supreme Court based on the explicit language of 35 U.S.C. 101 and the legislative history to make “anything under the sun that is made by man” patent eligible. Diamond v. Chakrabarty, 447 U.S. 303 (1980) (citing S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H. R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952)).

The Supreme Court this morning released its orders list, in which it denied all pending petitions for certiorari on cases concerning patent eligibility. The Court has now made it fully clear that it does not plan to wade back into the Section 101 debate, leaving it up to Congress to clarify the law. Thus—with an impeachment trial and presidential election looming this year—a quick 101 fix seems increasingly unlikely. The Court considered a number of petitions concerning Section 101 on Friday. Of them, Athena Diagnostics v. Mayo Collaborative Services was thought to have the best chance of being granted. In December, the United States Office of the Solicitor General (SG) weighed in on the petition in Hikma Pharmaceuticals v. Vanda Pharmaceuticals, recommending against granting cert in that case in favor of hearing one like Athena instead.

Five years after the last of the four decisions in patent eligibility doctrine by the Supreme Court—creating what is now referred to as the Alice-Mayo framework—the impact of this upheaval in the patent system has become even more clear. Ongoing court decisions and new data confirm that the Alice-Mayo framework has wrought an unsettling revolution and sowed uncertainty in what former U.S. Patent and Trademark Office (USPTO) Director David Kappos has referred to as the “the greatest innovation engine the world has ever known.” As policy debates on subject matter eligibility ramped up this past year, it is time to return back to the original dataset created by Robert Sachs and David Kappos that we presented in Turning Gold to Lead and provide an update.

Athena Diagnostics today filed its reply brief to Mayo Collaborative Services at the Supreme Court in the closely-watched petition asking the High Court to clarify U.S. patent eligibility law. The reply reiterates the points made in Athena’s petition for certiorari and dismisses Mayo’s argument in November that “any further action regarding the patentability of medical diagnostic claims such as Athena’s that employ conventional, known techniques should and does rest with Congress.” The reply comes three days after the United States Solicitor General recommended that SCOTUS grant cert in Athena or “another such case”, rather than in Hikma Pharmaceuticals v. Vanda Pharmaceuticals.

The United States Office of the Solicitor General has filed its brief in response to the Supreme Court’s March request for views in Hikma Pharmaceuticals v. Vanda Pharmaceuticals. The December 6 brief says that the Federal Circuit correctly held the relevant claims of Vanda’s patent-in-suit eligible, and that the case “is not an optimal vehicle for bringing greater clarity” on the topic of Section 101 law since the CAFC arrived at the correct result. Instead, the High Court should grant certiorari in a case like Athena Diagnostics v. Mayo Collaborative Services, in which the order denying en banc rehearing “was accompanied by multiple separate opinions articulating different understandings of Mayo and seeking clarification from this Court.”

My company, Chestnut Hill Sound Inc. (ChillSound), has been victimized by a U.S. patent system that for nearly a decade has been in a sorry state. Changes wrought by the America Invents Act (AIA) in 2011 and other recent developments cost my company, its investors and inventors millions of dollars. These changes have allowed a large company to reap great profits at our expense. Even more unfortunately, our story is too typical of many other inventors and small companies. Small businesses are the backbone of our economy and need to be cultivated, as they are the most dynamic source of new jobs and competitive products and technologies. There have always been reports of large corporations stealing inventions from small businesses, but it used to be possible via the courts to vindicate the patent rights of owners and obtain ultimate redress.  The AIA—sold by the “efficient infringers” lobby as a measure to protect big business from the expense and nuisance of so-called “patent trolls”—has turned into a weapon of deep-pocketed big businesses that enables them to steal with impunity inventions from small businesses and independent inventors. The AIA brought with it the Patent Trial and Appeal Board (PTAB) and Inter Partes Review (IPRs), a post-grant adversarial proceeding at the United States Patent and Trademark Office (USPTO). As has been amply discussed here on IPWatchdog, the Court of Appeals for the Federal Circuit (CAFC) recently opined that the so-called Administrative Patent Judges (APJs) were unconstitutionally appointed from the beginning. Yet these unconstitutionally appointed APJs continue to kill patents, especially when the patent owner is a small company that has sued a large company for infringement, as was the case with ChillSound.